Terence Corcoran: In the anti-oil insurance cartel

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The Trudeau government proudly signed Canada to a global accord with 20 other countries pledging to stop funding government agencies for oil and gas development in other countries. “The intention,” said Natural Resources Minister Jonathan Wilkinson, “is not to fund ongoing exploration and production of fossil fuels.

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As for oil and gas investments in Canada, Wilkinson and Trudeau’s Green Team are likely counting on global private financial conglomerates to block funding for the country’s energy companies. In recent days, amid the clamor for action at COP26, the list of non-governmental financial institutions planning to kill investments in Canadian and global fossil fuel industries has grown.

The private sector’s most prominent anti-carbon action plan has come from Mark Carney’s Glasgow Financial Alliance for Net Zero (GFANZ), an agglomeration of 450 financial institutions that Carney says have the global capacity to withdraw funds. billion dollars from the oil and gas industry over the years. to come. Most of the world’s major banks are members of the Net Zero Banking Alliance, including Canada’s chartered banks.

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How these alliances work is still being worked out by Carney and his associates. Their collective role as powerful controllers of the financial system smacks of corporate cartelism, a point made by William Watson in “Who Chose the Bankers?” on this page the other day. More importantly, Watson accurately describes the GFANZ movement as the creation of a cartel, a Carney cartel via “an agreement to restrict trade.”

Cartels are generally considered illegal attempts to generate profit under competition laws. In this case, GFANZ’s bankers, insurers and other financial firms aim to kill the legal industries, a bizarre corporate strategic goal.

It is an interesting exercise to follow how the large financial institutions GFANZ determine which companies to eliminate. The operations of the Net-Zero Insurance Alliance (NZIA) within the framework of the GFANZ initiative are instructive, in particular the role of one of its members, the Parisian conglomerate AXA.

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On the occasion of COP26 and the GFANZ plan, AXA announced that it would reduce its provision of investment and insurance services to companies engaged in unconventional exploration and production. AXA’s chief executive said the insurer will make its business decisions “on the basis of a restrictive selection process” using a list of energy companies identified on the Global Oil and Gas Exit List (GOGEL). Five percent of the companies on the GOGEL list meet AXA’s cut-off criteria.

The GOGEL list was released last week in Glasgow by a group of NGOs, including the usual Green suspects. It claims to provide all the information GFANZ members need to target 887 companies that account for 95 percent of the world’s oil and gas production. GOGEL’s message is that the world needs “an immediate end to oil and gas exploration and the development of new oil and gas fields”. Among the “dirtiest producers” are Suncor Energy, Cenovus Energy and Canadian Natural Resources.

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One of GOGEL’s big sponsors is an outfit called Urgewald. Based in Germany, Urgewald is an activist NGO with charitable status in the United States. It is also supported by (among many charities) one of the Rockefeller Operations which funded anti-tar sands activity in Alberta. Tom Kruse of the Rockefeller Brothers Fund is quoted by Urgewald as saying that GOGEL is “the database we’ve all been waiting for. It’s public, it’s meticulously researched, and it’s an essential tool in helping us end the era of fossil fuels.

The world’s major insurers have been actively trying to sideline fossil fuels for some time, particularly the tar sands and Canada’s pipelines. The pipeline deinsurance movement is led by the same group of NGOs identified in the recent Alberta report on charitable funding of fossil fuel activism.

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Instead of resisting the NGO push, insurers are joining it in forming a cartel to crush the tar sands and other projects.

This does not mean that insurance options are not available to energy companies in Canada. But two sources in the energy and insurance industries report that competitive options are on the decline. “More than half of the world’s largest insurers now have restrictions on coverage for tar sands or other forms of oil and gas production / refining,” one said. Insurance rates have “increased significantly” and are expected to continue to rise in the future.

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So, based on the initiatives of NGOs and activists funded primarily by charities, the world is moving towards a financial system that aims to phase out the use of fossil fuels. It is a goal deemed impossible by all except the most extreme activists, but which has been adopted by financial cartels as the basis for investment, loans and insurance.

And as one Canadian industry commentator put it, if Canada fails to meet demand, fossil fuels will enter the global economy from Russia, Saudi Arabia, Venezuela, China – all countries that rival Canada.

As Watson suggests, competition can often be relied upon to curb cartel activity. Perhaps other insurance and tech companies will emerge to fill the void left by AXA and other insurance companies. However, it is certain that the competition to supply the world with fossil fuels will continue, leaving Canada and Alberta frozen in the hands of environmental activists who supply the insurance and banking industry with ammunition to kill it.

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