Jacob Rees-Mogg’s Funding Ties With Dirty Canadian Pipeline Giants and Palm Oil Deforestation
Rees-Mogg’s appointment as Business, Energy and Industrial Strategy Secretary suggests the Government is not committed to its own net zero aims, reports Nafeez Ahmed
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Business, Energy and Industrial Strategy Secretary Jacob Rees-Mogg, who is in charge of Britain’s net zero energy strategy and who has just lifted restrictions on fracking in the UK, has funding ties to some of the most environmentally destructive projects in the world – palm oil deforestation and dirty Canadian tar sands, Byline Times can reveal.
Rees-Mogg not only received a donation from a billionaire profiting from rainforest deforestation threatening the world’s most endangered species, he also personally profited from a relationship with a Canadian firm, one of whose funds invested heavily in the dirtiest fossil fuels on the planet.
The new revelations come as leaked footage has emerged showing him extolling the “green” nature of domestic gas to his department, and urging the need to get “every cubic inch of gas out of the North Sea”.
Byline Times has also reported on Rees-Mogg’s long-standing relationship for more than a decade with Robin Crispin Odey, a ‘disaster capitalist’ hedge-fund manager and fossil fuel investor who is profiting from the energy price hikes that are driving the cost of living crisis.
Rees-Mogg’s track record of climate science denial is well-known, as is his role as a founding partner at Somerset Capital Management – a hedge fund with its own fossil fuel investments. Byline Times can now reveal how Somerset Capital Management’s early fossil fuel investments connect Rees-Mogg with the dirtiest oil and gas ventures in the world.
They confirm that Rees-Mogg’s client profited from investments in north American fossil fuel giants which spearheaded the world’s biggest and potentially most environmentally-destructive pipeline projects.
The parliamentary register of interests shows that in November 2012 – two years after Rees-Mogg became Conservative MP in North East Somerset – during his role managing investments at Somerset Capital Management, he acquired a client named Redwood Emerging Markets Dividend Income Fund, run by Redwood Asset Management in Toronto.
That month, Redwood launched a new Exchange Traded Funds (ETF) incorporating stocks in some of the largest and dirtiest fossil fuel giants in Canada, including TransCanada, now known as TC Energy Corporation.
TransCanada had proposed the controversial Keystone XL Pipeline, a massive expansion of its Keystone pipeline system operating since 2010, to transport the dirtiest fossil fuels on the planet – oil from tar sands – from Alberta to refineries in Texas. From there, it could then be exported overseas. The project was eventually abandoned amid sustained protests led by Bill McKibben’s 350.org.
Tar sands emit up to three times more carbon dioxide emissions than the same quantity of crude oil due to its sludgy composition. Because of the higher energy costs needed to mine and refine tar sands until it becomes a usable oil product, its also extremely expensive and inefficient, with a low-energy return on investment value of around 4:1.
Redwood’s ETF also facilitated investment in other firms including Enbridge, the Canadian pipeline giant behind the ultimately abandoned Northern Gateway pipelines project that aimed to transport oil from the Athabasca tar sands in Alberta to export to Asian markets. The proposal was a huge threat to waterways, wildlife and indigenous communities, and was eventually cancelled in 2016.
Other lucrative investment opportunities in the portfolio were Husky Energy Inc. – one of Canada’s largest oil companies recently acquired by Cernovus Energy; Texas-based oil and gas monolith Kinder Morgan (behind the Trans Mountain pipeline expansion protested by indigenous people); and Pembina Pipeline, which operates transport and storage infrastructure for oil and gas across western Canada.
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Through his management and shares in Somerset Capital Management, Jacob Rees-Mogg personally profited from his work with Redwood Asset Management. Redwood did so well that it was later acquired by Purpose Investments Inc..
Rees-Mogg has also received a donation from a billionaire profiting from deforestation. In January 2020, he received £2,000 from Sir Henry Keswick, chairman of Jardine Matheson, a Fortune 500 conglomerate based in Hong Kong and domiciled in Bermuda.
Matheson works across a wide range of sectors including ones heavily involved in fossil fuels such as motor vehicles and transportation, mining and agribusiness. The firm is also a major palm oil producer in Indonesia. In 2015, its subsidiary was accused of destroying 14,000 hectares of forest since 2006, encompassing the habitat of endangered species such as Sumatran elephants and tigers.
Last year, the NGO Mighty Earth cited new satellite imagery showing Matheson’s subsidiary “caught red-handed” expanding deforestation operations into the only known habitat of the critically endangered Tapanuli orangutan, despite promising to stop doing so in 2019. The expansion appeared to be related to gold mining.
It is concerning that the UK’s new Business, Energy and Industrial Strategy Secretary is actively tied to some of the most destructive energy ventures in the world. His appointment suggests that Liz Truss’ Government does not intend to ensure that it abides by its own net zero and environmental commitments.
The Department of Business, Energy and Industrial Strategy did not respond to a request for comment.
This article was amended on 27 September 2022 to clarify Jacob Rees-Mogg’s relationship with Redwood Asset Management, the firm which profited heavily from investments in Canadian fossil fuels.