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Pipe for the Keystone XL Pipeline at Gascoyne pipe yard in North Dakota. Photo credit: Sabrina King / Dakota Rural Action

Putin's Ties to the Keystone XL Pipeline

By Steve Horn and Itai Vardi

Believe it or not, there's a key connection to Russia and its president, Vladimir Putin, in the fight over North America's controversial Keystone XL pipeline.

One of President Donald Trump's first actions in office was to sign an executive order on Jan. 24 expediting the approval of the Keystone XL. Owned by TransCanada, this tar sands oil pipeline was halted by former President Barack Obama in November 2015. Trump signed another order on Jan. 24, calling for steel for U.S. pipelines to be made in the U.S. to the "maximum extent possible" and two days later TransCanada filed a new presidential permit application for Keystone XL with the U.S. Department of State.

Critics, such as John Kemp of Reuters, pounced on the caveat language in Trump's steel order and noted that it appears "designed to preserve lots of wiggle-room." In fact, a DeSmog investigation reveals that much of the steel for Keystone XL has already been manufactured and is sitting in a field in rural North Dakota.

DeSmog has uncovered that 40 percent of the steel created so far was manufactured in Canada by a subsidiary of Evraz, a company partly owned by Russian oligarch Roman Abramovich, who is a close ally of Putin and a Trump family friend. Evraz has also actively lobbied against provisions which would mandate that Keystone XL's steel be made in the U.S.

Abramovich is described in the 2004 book Abramovich: The Billionaire from Nowhere by British journalists Dominic Midgley and Chris Hutchins as "one of the prime movers behind the establishment of the only political party that was prepared to offer its undiluted support to Putin when he fought his first presidential election in late 1999. When Putin needed a shadowy force to act against his enemies behind the scenes, it was Abramovich whom he could rely on to prove a willing co-conspirator."

Evraz describes itself as "among the top steel producers in the world based on crude steel production of 14.3 million tonnes in 2015."

DeSmog's findings comes as Trump is under scrutiny from Congress, U.S. intelligence agencies and others for his personal and presidential campaign team's ties to Russia. The Office of the Director of National Intelligence concluded in January that Russian state-sponsored actors had hacked into the email databases of both the Democratic National Committee and presidential candidate Hillary Clinton's campaign in order to influence the election in favor of Trump.

Meet Roman Abramovich

After helping launch Putin's presidency in Russia, Abramovich also was instrumental in the vetting and picking of Putin's cabinet, according to Midgley and Hutchins in their book. They also reveal that Abramovich was instrumental in the creation of Putin's political party, Unity.

Abramovich bought a 41 percent stake in the steel producer Evraz in 2006. Prior to that, he owned a 72 percent stake in the Russian state-owned oil company Sibneft, which was eventually purchased for $13 billion by the state-owned company Gazprom and became known as Gazprom Neft.

Before this, however, Sibneft merged in 2003 with the company Yukos, then owned by Russian oligarch Mikhail Khodorkovsky, in an attempt to create what was envisioned as a competitor to the likes of ExxonMobil. Had it materialized, the resulting company, called Yukos-Sibneft, would have been at that point the fourth largest oil producer in the world.

Under pressure from Putin, however, and with what was reported as the helping hand of Abramovich, the deal was called off and Khodorkovsky ended up arrested and then jailed for eight years for alleged tax evasion and fraud. Abramovich's personal wealth doubled as a result of the later Sibneft-Gazprom merger.

The Telegraph reported that Abramovich met with Putin before the Yukos-Sibneft deal was tossed to the curb.

"The revelation of the meeting will fuel suggestions that the Kremlin is closely involved with the fate of the two companies," The Telegraph wrote at the time. "Many industry commentators saw [the] decision to halt the merger as a government-backed effort to further weaken Mikhail Khodorkovsky, the former chief executive of Yukos and its largest shareholder."

Abramovich's influence would continue in the years ahead. The 2010 book The Crisis of Russian Democracy: The Dual State, Factionalism and the Medvedev Succession, written by Richard Sakwa, further describes Abramovich as someone "whose wealth in the Putin years increased at least tenfold and he remained one of Putin's closest confidants" while Putin carried out his first term as president.

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