The English version is below here | Mein Op-Ed-Artikel wurde am 6. April 2021 im Tagesspiegel Background in Berlin gedruckt.
Die Ukraine als „Zentralbank“ für europäische Energie
Thomas O’Donnell, Hertie School of Governance
Wie kann die Gasdominanz Russlands strategisch eingehegt werden? Der Wissenschaftler Thomas O’Donnell von der Hertie School of Governance prüft in seinem Standpunkt die Möglichkeit, die Ukraine mit ihren großen Gasspeichern zu einer Art „Zentralbank“ für europäische Energie zu machen und sie als Puffer zu nutzen. Zusammen mit weiteren Alternativen zu den Nord-Stream-Pipelines verbessere das die Versorgungssicherheit stark.
Der Chef des ukrainischen Gastransportsystems, Sergiy Makogon, hat vorgeschlagen, dass Europa die Ukraine als flexiblen und strategischen Energieknotenpunkt akzeptiert und dabei die Vorteile ihrer einzigartigen Gastransport- und -speicherinfrastruktur nutzt.
Was dieses Konzept glaubwürdig macht, ist, dass die Ukraine seit 2014, kurz nachdem die Maidan-Revolution und die russische Aggression begannen, ihren Gassektor erfolgreich in diese Richtung umgestaltet hat. Mit Hilfe der EU rüstete die Ukraine rasch die Exportpipelines in die Slowakei, nach Polen, Ungarn und Rumänien um, um Rückflüsse (Reverse-Flow) zu ermöglichen. Das befreite Kiew schnell von der Notwendigkeit, russisches Gas zu kaufen, und stellte sicher, dass ein solcher „Handel“ in Zukunft nicht dazu genutzt werden kann, Moskau zugeneigte Oligarchen zu fördern.
Op-Ed: Ukraine as “Central Bank” of European energy
Dr. Thomas O’Donnell, Hertie School of Governance | Published in: Tagesspiegel Background, Berlin. 6 April 2021
How can Russia’s gas dominance be strategically contained? Dr. Thomas O’Donnell of the Hertie School of Governance, Berlin, examines the possibility of turning Ukraine with its large gas storage facilities into a kind of “central bank” for European energy and using it as a buffer. Together with other alternatives to the Nord Stream pipelines, this will greatly improve European security of supply.
The CEO of Ukrainian’s gas transmission pipeline system, Mr. Sergiy Makogon, has proposed that Europe embrace Ukraine as a flexible and strategic energy hub, taking advantage of its unique gas-transport and -storage infrastructure.
What makes this concept credible is that Ukraine has been successfully re-shaping its gas sector in this direction since 2014, shortly after its Maidan Revolution and Russia’s aggression began. With EU assistance, Ukraine rapidly retooled export pipelines to Slovakia, Poland, the Czech Republic and Hungary to permit reverse flows. This rapidly freed Kyiv from buying Russian gas and assured this “trade” could not be used in future to cultivate pro-Moscow oligarchs.
With reverse-flow enabled, Ukraine has given European firms access to its 31 billion cubic meters (bcm) of storage, Europe’s largest, equal to the total of Italy, France, Austria and Hungary combined, or 25% of all EU capacity. And it made this option attractive by cutting tariffs on transport into storage and zeroing storage tax. It also uses “virtual reverse flow,” making deals to retain some part of Russian gas it would normally transit west to a particular customer in Europe equal to what that customer would otherwise pay to physically send into storage in Ukraine or elsewhere. In 2020, for example, these market-savvy steps convinced European firms to park pandemic-surplus gas in Ukraine as EU storage filled and prices fell.
Ukraine’s unused pipelines are also a security asset. About 2 bcm can be stored in these at twice-the-usual pressure, awaiting rapid injection towards Slovakia and Austria’s Baumgarten gas hub. Tens-of-millions of cubic meters per day, instantly injected, can uniquely quell intra-day demand peaks, such as from greater use of fluctuating renewables. In comparison, boosts in Nord Stream flow require days to arrive, and Ukraine’s normal storage hours.
These achievements have been supported by both the EU and USA, the latter with its aid to “Three Seas Initiative” states, targeting Gazprom-mediated corruption and political influence. Both also aid reform and EU norms, such as Naftogaz spinning off its transit-pipeline business, led by Magkogon, which has launched dozens of projects to integrate with EU neighbors’ systems. Soon, reverse-flow will also link Poland and Lithuanian LNG.
However, Europe’s energy security problems are not merely these. Moscow interrupted EU gas in 2006, 2009, 2014 for political ends, and the EU-27 remain dangerously dependent. Gazprom reported selling it 228,2 and 209,7 bcm in 2019 and 2020,[i] while BP data show 43.4% of its 2019 pipeline imports[ii] were Russian, representing 42.4% of “gross inland consumption.” How can Ukraine and Europe counter Putin’s gas-as-weapon?
Consider: Ukraine’s 31 bcm of stored gas, mobilized over, say, two months, can mimics Gazprom-pipelines flowing 180 bcm/year. An emergency system sharing this and all gas within EU borders could, as an EU Commission Gas-Cutoff Stress Test found, by “putting solidarity first,” manage a protracted gas crisis. Embracing Ukraine as a “Central Bank” of gas would enhance not only the EU’s energy security but give material capacity to stand up to Putin whenever necessary without fearing, as now, Moscow will shut off its lights and heat.
Unfortunately, German leaders have instead partnered with Gazprom to detour Russia’s gas exports around “risky” Ukraine by building the world’s longest subsea pipelines, Nord Stream 1 and 2, plus two connecting pipelines, OPAL and EUGAL, across Germany into the Czech Republic, where yet more pipes were built to reach EU networks filled till now by Ukrainian and Belarus-Poland transit pipelines. Gazprom’s new TurkStream pipeline into the Balkans, and to Italy and Baumgarten is the southern partner in the strategy to end Russian (and German) dependence on Ukrainian transit.
Naturally, Putin’s cuts to gas supplies via Ukraine alarmed Berlin, as they should. However, rresolving to aid Gazprom build detours into and across multiple Member states, a policy I’ve analyzed as a Neue Neue Ostpolitik, is a narrow-nationalist plan, empowering Putin.
In contrast, 16-to-32 bcm of non-Russian gas could flow from Turkmenistan across the Caspian to expand the new EU-USA-backed Southern Corridor pipelines, countering Russia energy games in the Balkans and Italy. However, Putin simply forbids any pipeline across the Caspian. So too, he forbids use of a soviet-era, 32 bcm pipeline from Turkmenistan via Kazakhstan, Russia and Ukraine’s transit system into the EU. This too would undercut Gazprom’s gas dominance, moderate prices and boost EU supply security.
How can it be that Berlin, and with-it Brussels, have not insisted there can be no Gazprom-backed pipelines built to or through any Member state so long as Putin forbids these competing pipelines to bring non-Russian gas across Russia and the Caspian?
Ukrainians correctly argue, as have many EU Members and the USA, that, if this Turkmen gas (now captured in a Chinese monopsony) were allowed to flow to Europe, and if Russia were constrained to continue using existing transit pipelines across Ukraine to bring its gas to market (ie, if Gazprom’s Nord Stream 2 and TurkStream and connections were disallowed by the EU and/or US sanctions) not only would Putin be strongly constrained from further aggression against Ukraine; but the diversity of non-Russian suppliers and routes would also bolster Europe’s energy security and with this, materially enable it to stand up with much-needed new confidence and dignity to Putin’s abuses of democracy, human rights and states’ sovereignty.
[i] Source, Gazprom, Feb. 2021 as reported by S&P Global, 16 February 2021. https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/021621-russias-gazprom-sees-2020-gas-sales-slide-81-after-tumultuous-year
[ii] Author’s analysis; data from “bp Statistical Review of World Energy,” June 2020. http://www.bp.com/statisticalreview.
The Global Barrel 
Tom excelente trabajo.
Saludos
Luis Lugo
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Gracias, Luis. Saludos cordiales, Tom
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