There are few things Jason Kenney loves more than talking about how ethical Alberta’s oil and gas industry is. But when it comes to actually doing something about those ethics, he seems far less interested. Witness the response this week to Russia’s invasion of Ukraine from other oil- and gas-producing regions and the stark contrast between the decisions they’re making and the ones Alberta isn’t.
Norway’s sovereign wealth fund announced it will immediately freeze any new investments in Russia and start divesting the $3.1 billion worth of Russian assets in its portfolio. British Petroleum went a step further, announcing it will unload its stake in Rosneft, the Russian state-owned oil and gas company, at a substantial financial cost. According to Reuters reporters Ron Bousso and Dmitry Zhdannikov, “Rosneft accounts for around half of BP’s oil and gas reserves and a third of its production and divesting the 19.75 per cent stake will result in charges of up to US$25 billion, the British company said, without saying how it plans to extricate itself.”
In Alberta, Kenney has been busy tweeting about “dictator oil” and why dead pipeline projects like Keystone XL and Energy East should be revived. And while it’s impossible to miss the stench of his crass opportunism, there are also some notes of desperation in there if you sniff around a little more. After all, the oil and gas industry Kenney holds up as ethical has some very unethical Russian money in it.
Take Spartan Delta Corp., an Alberta oil and gas company with more than 60,000 barrels per day of production and one very powerful oligarch in its corner. According to Financial Post reporting, Russian billionaire Igor Makarov is — or at least was, as of March 2021 — Spartan’s largest shareholder, with his Switzerland-based ARETI Energy S.A. controlling 21 per cent of the company. Makarov, a former Olympic cyclist, previously founded Itera Oil and Gas Company, which was the largest privately held energy company in Russia until it was sold to Rosneft in 2013.
Makarov is hardly the only Russian oligarch involved in Canada’s oil and gas industry. The more troublesome connection for Kenney might be the one between Evraz PLC — the British-based steel company that’s a key supplier for both the Coastal GasLink pipeline and the Trans Mountain expansion — and the trio of Russians who control it. In 2018, the U.S. Department of the Treasury put Roman Abramovich, Evraz’s controlling shareholder, along with non-executive chairman Aleksandr Abramov and then-CEO Aleksandr Frolov, on its so-called “Putin list” of politicians and oligarchs who had benefited from their ties to the Russian president.
This is still flying under the radar for the most part in Canada, but it’s already big news in the U.K., where Abramovich owns the Premier League’s Chelsea football club. The image of a trio of Russian oligarchs owning the company that’s fabricating the steel for the Coastal GasLink pipeline and Trans Mountain is a very bad look, and it’s one Kenney should be highly attuned to. He knows how important LNG Canada, which depends on CGL for its feedstock, is to Alberta’s oil and gas industry. And he surely understands how this relationship could be used to slow its construction — or stop it entirely.
If Kenney wants to avoid having this blow up in his face, he needs to do more than tweet about pipelines. Yes, he gave a speech in the Alberta legislature calling on the federal government to freeze the assets of Russian oligarchs in Canada, but he did it at the same time reporters were in an embargoed news conference about the budget with provincial Finance Minister Travis Toews. Crucially, he has yet to repeat the message he delivered to the legislature on his social media channels.
Any and all involvement by Russian oligarchs in his province’s ostensibly ethical oil industry is a non-starter, and companies that have benefited from their money should own up to it if it’s still there. The involvement of an oligarch-owned steel company in the Coastal GasLink pipeline should never have been allowed to happen, and it should be rectified as quickly as possible. And if Kenney really wants to be ethical, his UCP should probably return the $4,243 maximum donation in 2021 from Don Archibald, who sits on Spartan Delta’s board of directors.
Oh, and if Alberta’s premier really wants to “defang Putin,” as he said in a recent tweet, then he should forget about new pipelines — which wouldn’t come into service until the end of the decade under even the most optimistic scenarios — and focus on helping Europe and other importing nations get off fossil fuels and onto renewables that Russia doesn’t control.
Opinion: The oil and gas industry Alberta Premier Jason Kenney holds up as ethical has some very unethical Russian money in it, writes columnist @maxfawcett. #ABpoli #Ukraine #UCP #Russia
Alberta’s energy companies could even invest in projects in Europe that increase the continent’s energy security and reduce its carbon footprint. But that would cost real money, not cheap talk.