I moderated this very lively & frank panel at the Ukraine Gas Investment Congress (UGIC) in Kyiv on 22 October 2021. [The high-level event participants are listed below].
I thoroughly enjoyed this lively debate, and learned a good deal. It’s an hour long; but I think it is well worth a watch, especially as the debate gets going.
* Torsten Wöllert, Minister Counsellor; Energy, EU Delegation to Ukraine
* Olga Bielkova , Director on Government & International Affairs Gas Transmission System Operator (GTSOU)
* Oleksiy Ryabchyn (Rye ab chen), Advisor to the Chairman of the Board, Naftogaz of Ukraine
* Sergiy Nahorniak, (Nach hor niak) MP and Chairman of the Subcommittee on Energy Conservation and Energy Efficiency Verkhovna (Ver kavna) Rada Committee on Energy and Housing and Communal Services
* Steve Freeman, Head of Energy Transition, Digital and Integration Schlumberger
* Dr. James Watson , Secretary General, Eurogas
* Moderator: Dr. Thomas O’Donnell, Hertie School of Governance, Berlin; and Energy and International Affairs Analyst
It was a respectful but clearly exasperating confrontation, a between contradictory imperatives pitting:
a) Ukraine’s necessity to boost its domestic natural gas production in the interests of its national security and independence, and the people’s social-economic needs,
b) The demands from Brussels and especially from highly developed Western-EU Member States insisting that Ukraine abandon all fossil fuels (including gas) ASAP,
Green-Deal-inspired insistence by Brussels for rapid gas-abandonment imposes the difficulty or outright banning of financing for increasing Ukraine’s domestic gas production. Many EU-zone financial institutions cannot any longer finance “upstream” projects (E&P: exploration and production), including the World Bank, whose representative pointed out earlier at the Congress that his institution is now outright banned from making such investments.
Nevertheless, no one on my panel, or throughout the Congress disagreed that, for the foreseeable future, investments in new upstream natural gas exploration and production are precisely what Ukraine urgently needs. The constant threats from Moscow, of Putin, his energy ministry and Gazprom to end transit of Russian gas to the EU via Ukraine would make the present “virtual reverse flow: method by which Ukraine obtains much of its natural gas, so vital for electricity generation but especially for citizens winter heating, will become impossible.
This is whey how to raise financing for domestic new gas E&P was precisely the urgent topic of this Congress organized by Naftogaz, the state natural gas company.
What is Ukraine to do? Is this fair?
In Ukraine’ case, the undermining of natural gas upstream financing based on climate rationales is clearly premature for Ukraine – and in fact, as I pointed out at the last Congress “summing up” panel, it is also a great problem for most of the EU’s “Three Seas Initiative” states, the former Soviet-dominated members fo the EU (in which Ukraine is an observer) almost all of whom can only escape heavy dependence on coal by switching to much more environmentally and zero-air-polluting natural gas and nuclear generation. However ,the EU is currently deep in a debate whether to allow or ban financing for both gas (as a transition fuel) and nuclear energy as part of its Green Deal “Green Finance Taxonomy” rules.
Clearly, the Ukrainian panel participants thought this is unfair. However, is it more, is it a “colonial” attitude towards Ukraine by more-developed states, as one panelist twice repeated in exasperation?
What I could not help but notice in this an other panels, at UGIC is that, by an large, the EU officials almost al, either openly, or more often implicitly,, do indeed recognize the unfairness and difficulties of the EU position. However, it is as if they see themselves as prisoners of some greater force that cannot be openly confronted and altered. The emperor, as it were, lacks clothing, but no one believes that really anything can be done.. How many urgent issues are there on which this corrosive “lack of ambition” is observed?
As I pointed out, as moderator, Ukraine is a country at war, occupied by a country, Russia, that would otherwise still be its gas supplier. This makes it a matter of national security to development replacement sources domestically. Is the EU’s Green Deal anti-carbon ambition properly take account of such an exigency?
Listen and see what you think of this frank confrontation of two points of view expressed here.. I’d be very interested to know your thoughts and suggestions. – Tom O’D.
“Thinking Beyond Tomorrow–UKRAINES ENERGY TRANSITION” in Kyiv, 21.10.20 21
- Torsten Wöllert, Minister Counsellor; Energy, EU Delegation to Ukraine
- Olga Bielkova , Director on Government & International Affairs Gas Transmission System Operator (GTSOU)
- Oleksiy Ryabchyn (Rye ab chen), Advisor to the Chairman of the Board, Naftogaz of Ukraine
- Sergiy Nahorniak, (Nach hor niak) MP and Chairman of the Subcommittee on Energy Conservation and Energy Efficiency Verkhovna (Ver kavna) Rada Committee on Energy and Housing and Communal Services
- Steve Freeman, Head of Energy Transition, Digital and Integration Schlumberger
- Dr James Watson , Secretary General, Eurogas
- Moderator: Dr. Thomas O’Donnell, Hertie School of Governance, Berlin; and Energy and International Affairs Analyst
Would you or Yergin comment on Nord Stream One? No one is talking about the already built pipeline!
Hello David. Thanks for your question. I’m sorr, somehow I didn’t get a notice you had commented.
Yes, Nord Stream 1 already is delivering 55 billion cubic meters of Russian gas to Germany. gThis is bringing Putin foreign exchange he desperately needs now to wage his war and mitigate economic crisis in Russia due to western sanctions. The German government (and/or the EU) should do all they can to reduce and end this pipeline’s business.
What is interresting is that BASF gets, as i understand, abou t0 bcm of this gas directly to their busiess. They are also half owners in partnership with Russia’s Gazprom of the company, Gascade, that operates Nordstream 1, and also the other pipelines in Germany that transport Russian gas such as the OPAL, EUGAL and NEL pipelines. However, this business is a now causing a serous problem for Ukraine to win its war. It will be difficult, but the German government has to end the NS2 flows as soon as possile.