Feature

Bill Koch's Wild West Adventure

The controversial businessman is building an Old West town near Paonia that’s a full-scale reproduction of a 19th-century settlement. But is the town simply the project of an eccentric billionaire, or is there more to the story? 

February 2013

In 1968, while studying for his doctorate in chemical engineering, Bill Koch started working for his father’s company; Charles had taken over the business a year earlier after Fred Koch died of a stroke. Twelve years later, as vice president of corporate development, Bill spearheaded an attempted takeover with the goal of deposing Charles, the chairman and CEO, and David, who was an executive vice president. Bill disagreed with Charles’ totalitarian control of the company and believed the stockholders were not getting their rewards. He also disapproved of using company money to fund Charles’ and David’s libertarian causes: In 1977, the Kochs donated money to launch the Libertarian Cato Institute, and David Koch ran for vice president on the 1980 Libertarian Party ticket. When the coup failed, Bill was fired, and in 1983, Bill and his eldest brother, Frederick, sold their shares of Koch Industries. Bill received about $300 million after taxes. The battle may have been over, but the war was just beginning: Bill, David, and Charles were embroiled in litigation for the next 19 years.

In 2001, after eight lawsuits, the brothers finally settled. Bill Koch won the final suit against his brothers. “I now have a peaceful coexistence with Charles,” Koch says. “And I am now very best friends with my brother David.” Koch initiated the reconciliation with his twin by inviting him to his birthday party in 2001, and David served as the best man in Koch’s 2005 wedding to his third wife, Bridget Rooney Koch.

Koch is cautious when speaking of his brothers—he avoids commenting on his brothers’ politics, on how his views differ from theirs (he, like his brothers, was a big donor to Mitt Romney; but, unlike his brothers, he has also donated to Democrats, including Ted Kennedy), and on the almost 20-year war waged among them. This is largely because of a nondisparagement agreement in the brothers’ final settlement. But it’s difficult not to sense that, no matter how much he once wanted to win against his brothers, he is grateful to have his family back, thankful for the peace.

In 1983, Koch, determined to create an identity separate from his brothers and family name, founded Oxbow Carbon. (“An oxbow is where a river changes course,” Koch explains.) Oxbow’s great success was figuring out that “petroleum coke,” a byproduct of producing gasoline, could actually be used, instead of discarded. Oxbow buys coke from refineries and, in turn, sells it to aluminum, steel, and cement companies and fuel-grade markets, where it’s used instead of coal to generate energy.

Over the years, Oxbow has expanded its core businesses to include the mining and marketing of energy and commodities such as coal and natural gas, along with metallurgical and calcined coke, a key ingredient in the manufacturing of aluminum. It’s a big supplier of sulfur, sulfuric acid, and fertilizers. Oxbow, which has annual revenues of $4 billion and employs 1,500 people worldwide, also owns one of the most productive underground coal mines in the United States: Elk Creek Mine, located about 10 minutes from Koch’s ranch. Elk Creek yields some of the “cleanest” (lowest sulfur) coal in the world.

Though Oxbow is now firmly entrenched in the business of carbon-based products, one of its first endeavors was in alternative energy—geothermal and hydroelectric plants in Nevada, the Philippines, and Costa Rica. In November, Oxbow, along with Aspen Skiing Company, Vessels Coal Gas Inc., and Holy Cross Energy, unveiled a coal-methane conversion plant that will convert methane from Oxbow’s Elk Creek Mine (methane is a byproduct of coal mining and a leading greenhouse gas) into electricity; the power generated through this project is roughly equal to Aspen Skiing Company’s energy usage. It’s the second project of its kind in the United States. Auden Schendler, the vice president of sustainability at Aspen Skiing Company, says his partner, Tom Vessels of Vessels Coal Gas, had been trying to execute the project for a decade. Elk Creek was the only mine willing to try it. “Solving climate change is going to be really hard,” Schendler says. “To do it, we’re going to need to think differently; to create new alliances, maybe break old ones. This project shows how Americans can use a wasted resource for the betterment of our communities. It’s utterly bipartisan.”

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