Portions of Keystone XL, Dakota Access Built By Oligarch Who Helped Bring Putin to Power
DeSmogBlog’s Steve Horn says the steel used in the construction of the pipelines will be produced in the US or Canada, but nonetheless will be owned by foreign multinationals
KIM BROWN: Welcome to The Real News Network in Baltimore. I’m Kim Brown.
In January, Donald Trump signed executive actions to accelerate the Keystone XL and Dakota Access Pipeline projects, and to decree that American steel should be used for pipelines built in the United States. Here’s Trump on the topic at his joint address of Congress two weeks ago.
DONALD TRUMP: To protect our people, and that’ll be done some time next week, towards the beginning or middle, at the latest part. We’ve also taken steps to begin construction of the Keystone Pipeline and Dakota Access Pipelines — thousands and thousands of jobs. And put new buy American measures in place to require American steel for American pipelines. In other words, they build a pipeline in this country, and we use the powers of government to make that pipeline happen. We want them to use American steel. And they’re willing to do that. But…
KIM BROWN: Sounds good, right? Well, Trump said that his order on pipelines, quote, “Will put a lot of steelworkers back to work.” But, according to multiple news sources, that might not exactly be the case. Joining us today from Indianapolis, Indiana, to discuss this is Steve Horn.
Steve is a Research Fellow for DeSmogBlog. He’s also a freelance investigative journalist whose work has appeared in The Guardian, The Nation, and in Truthout. Steve, welcome back to The Real News.
STEVE HORN: Good to be back on. Thanks for having me.
KIM BROWN: Steve, this seems to have become one of Trump’s main talking points, that U.S. pipelines will get their steel from U.S. facilities, yet your investigative work has revealed something else. Tell us about yet another Russian connection to this particular angle of the Trump administration.
STEVE HORN: Sure. I just want to up front just want to clarify that there is definitely a Russian connection here. But I see it as a case study, really, of how the United States pipeline industry works, and how the United States pipe industry works for steel manufacturing for those commodities. There is an interesting Russian connection. There’s also, as I’ll explain, it’s not just Russian.
In the case of Keystone XL and the Dakota Access, which is always what Trump pins his… when he talks about American steel, he always talks about that in combination with Keystone XL and with the Dakota Access. And so, what I did was looked at those particular pipelines and how the steel was made. And it’s not that easy to figure it out, especially in the case of the Dakota Access.
In the case of the Keystone XL, Cornell University did a really important study about five years ago when the Keystone XL battle really first began in a major way in the United States. And they did do a supply chain study and looked at the different companies. One of the countries that ownership, at least, at that level, that makes the steel for Keystone XL, or made the steel — which is an important thing to also point out — is a company named Evraz, and there’s an Italian-owned company, and there’s an Indian-owned company, and that’s the important thing is who owns the pipe.
It’s not where it’s made, necessarily, because he’s talking about, “American steel”. He’s not talking about ownership and how these are complex, multinational corporations. You look at Evraz as an example, and actually for Keystone XL, most of that pipe is sitting in North Dakota in a field, in a city called Gascoyne… or, not a city, a really small town named Gascoyne, in North Dakota. And lots of it was made in Canada, by a company named Evraz, which is Russian-owned, and then they make the pipe in Canada.
So, we’re talking about this multinational companies, and that steel was then brought to the field in North Dakota, where it’s been sitting for years as Keystone XL, has been kind of stalling, as it stalled under the Obama administration.
Now that same pipe, as the Trump administration even recently acknowledged, the pipe is already made. They kind of backtracked off of that promise, and said, well, in this case, the pipe is already made. That’s what they’re referring to. That pipe will be brought from rural North Dakota to the route if it gets the necessary permits from the Department of State and from other agencies.
Then you go to the bigger picture, who is Evraz. Evraz Group the Russian portion of it, that’s owned in Russia, the 33% of that is a guy by the name of Roman Abramovich, who is better known as the owner of Chelsea Football Club, the soccer team, the English Premier League. Most people know him as that, but he also is a major owner of this multinational steel company. And they have plants all over the world, including lots in the United States and Canada.
And so, their trademark is these pipes. These large-diameter pipes that are labeled, “Made in Canada”. They’re made in Regina, Saskatchewan, in the case of the Keystone XL, and in the case of the Dakota Access. Large portions of both those pipes will be made, or were already made, by Evraz North America, the subsidiary of Evraz Group.
In the case of Abramovich, what makes him even more interesting, is that he actually has long-standing ties with Putin. Not just kind of ties, kind of works with the Russian government … he’s a guy who is credited with helping bring Putin into power by multiple scholars and multiple scholarly books that I cited in my article.
And basically, helped bring him into power at the turn of the millennium. And then actually was instrumental in picking Putin’s successor for a while, President Medvedev. He’s a guy whose wealth has increased ten-fold under Vladimir Putin. He is seen as this group of people in Russia that are known as the oligarchs, which is a group of people who profited from the mass privatization of commodities in the 1990s and into the early 2000s.
And, yeah, he’s a multinational. You could call him a multinational oligarch. He’s not just a Russian oligarch, given that he owns a British soccer team, his company is a multinational.
So, he’s an important figure.
KIM BROWN: Well, Steve, you may have just answered my next question, because I wanted to know more about TMK, IPSCO, “Ipsco”, I’m not sure if that’s the correct acronym for it, or the TMK Group and the ties between TMK Group’s board of directors, and Russian President Vladimir Putin.
STEVE HORN: Yeah. It’s a different company, another important one. Just, again, this could be any multinational company. These are complex organizations that make steel. If you look at TMK Group, it’s another example of a Russian-owned company that makes lots of pipe for oil. Not pipelines necessarily, but something called oil country tubular good, which is… we think of pipelines in the United States as things that bring oil or gas from a field to the refinery, or some end route.
In the case of TMK Group, which is the owner of TMK IPSCO, they make pipes that do fracking, for example. Or pipes that connect within a field to other connections that are needed to eventually get that product into a pipeline. They have plants in Ohio; they have a plant in Pennsylvania. They have plants around the world that make these pipes, and looking at, again, the ownership structure and in this case, what was most interesting was not necessarily that, but the board of directors.
There’s another guy by the name of Anatoly Chubais, who, again, was around in the 1990s and the early 2000s, at the time where Russia became Russia after the fall of the Soviet Union. And he, again, kind of like Abramovich, was around when Putin became president. He was involved in his presidential campaign. He eventually took over the power grid in Russia, when everything was privatized, the electricity grid. And then eventually reports show that he was also involved in the entire privatization process in Russia, working in concert with Harvard University.
Guys like Jeffrey Sax, another economist at the time, in the ’90s who were involved with the commanding heights of implementing privatization in Russia. So, he’s on the board of directors. Key figure. And interesting looking at ties to political power in Russia and looking at how, again, these are multinational corporations; you could look at literally probably any country that’s involved in making these … and see ties like this.
In this case, why the story was interesting because Russia is in the news so much, and so are these pipelines. But I didn’t want to do these stories, I didn’t want to say these pipes are like a Manchurian Candidate type of situation, but just to point out that it’s much more complex than a quote-unquote, “Buy America” situation.
KIM BROWN: Indeed. And, Steve, you know, Donald Trump is not getting a lot of pushback, really, from any parts of his agenda and from his policies by the Republican-controlled Congress. But there is a caucus, within the U.S. Congress, who have praised Trump’s pipeline steel order, and ironically it is the U.S. Congressional Steel Caucus.
Why are they praising Donald Trump utilizing steel that is foreign-made?
STEVE HORN: That’s the key thing is it’s not foreign-made steel. It’s foreign-owned steel. The steel in these cases that I’ve pointed out will be manufactured in U.S. plants, or Canada, most likely, probably increasingly so in the United States going forward, because of the executive order. The reason they praise it is pretty simple: it still creates jobs at the local level in these communities around the United States, rural areas that were key Republican or Trump voting blocs. Places like Youngstown, Ohio, for example. Places in rural Pennsylvania. I think that part is pretty straightforward. It’s not totally shocking there.
I think that the most important thing to point out is still to say, okay, where will these profits go to and who will eventually benefit? Yes, there will be local jobs. It’s almost undeniable. But you still have to look at the complex multinational ownership – sort of scheme, if you will –- for these sorts of endeavors. And in this case, all ties –- not all ties –- but key ties go back to Russian oligarchs.
KIM BROWN: Well, Steve, we talk about the type of jobs, or rather the number of jobs that these projects will create. Are these long-term jobs or are these sort of one to two-year contracted positions that evaporate as soon as the project is completed?
STEVE HORN: In the case of a company like TMK, they’re much more long-term because oil contra-tubular goods are always needed. There are fields around the United States that are being tapped into through fracking, and other drilling procedures. So, TMK, they had to cut back on jobs a little bit when the price of oil went down. But if those go back up, or at least go to a more stable level, TMK Group was, in my estimation, a more long-term, sort of not really as much of a boom-bust or project by project type of situation.
If you look at Evraz Group, yeah, that’s much more based on if a pipeline gets approved, they will make the steel for large diameter pipelines. So, looking at those two situations, they’re related, but different. And, again, pretty different than the discussion over the people who actually put the steel into the ground, which is one to two-year projects, but this all different aspects of the supply chain for the oil and gas industry.
KIM BROWN: And lastly, Steve, Trump, he also signed an action to expedite environmental review and approval of high priority infrastructure projects that he hopes to get moving as part of his drive to rebuild U.S. airports, roads and bridges. Based on the pipeline steel fiasco, could we expect more dubious sources from the steel for these other projects and will any of it as Trump says, “Put a lot of steelworkers back to work,” in your opinion?
STEVE HORN: I think that there is at least some merit to the fact that this will put steelworkers back to work in the United States. Like, for example the United States Steel Company that used to create a lot of steel, much more in the Chicago area, they’ve been talking about how they have the ability to make these pipes for these pipelines. Nucor is another example, another American company. So, I wouldn’t underestimate the fact that this can create jobs in certain communities around the United States.
To the second question, dubious ties, political connections, power elite connections, I think that the answer is probably going to be ‘yes’, if you actually look into these different companies, look at do they sit on different government commissions? Do they sit, the ones that are being created by Trump, or were these company’s donors? Or will they become donors? Usually the answer tends to be, ‘yes’.
It remains to be investigated and it remains to be seen if these companies will get more involved in creating United States pipes for U.S. pipelines, but usually the answer tends to be ‘yes’, so that’s the short answer. But it again remains to be seen.
KIM BROWN: Well, we’ve been joined today with Research Fellow from DeSmogBlog Steve Horn. Steve, we appreciate your reporting.
STEVE HORN: Thanks for having me.
KIM BROWN: And thank you for watching The Real News Network.