Category Archives: Energy and Geopolitics

My TRT TV-London: Cold War espionage in Berlin? Plus Russia’s “unique influence & penetration” of German society

Watch the Roundtable discussion

Is this a revival of Cold War espionage?

Aug 24, 2021 Roundtable (20.9K subscribers)
Following the arrest of a British employee at its Berlin embassy as a Russian spy, it’s been suggested that Russia has tried to infiltrate Germany in particular because of its role at the centre of Europe and because of its ties to Moscow. A former MI5 agent-recruiter, Annie Machon, plus UK academic expert Dr. Jenny Mathers at Aberystwyth University, and Dr. Tom O’Donnell, at Hertie School of Governance in Berlin are here to tell us if we’re witnessing a return to the Cold War ways of spying.

Some comments on the show: First off, my fellow panelists are experts on human espionage and Russian spy craft – which I am not – and were extremely informative In this discussion on David Foster’s Roundtable.

An overview and elaboration of my points: I stressed, besides a Cold-War-like level of Russian espionage in Berlin, there is a general openness in Germany to economic and political interpenetration and integration with Russia. In plain sight one sees everyday what I called the “unique influence and penetration” of German society as compared to any other EU or NATO ally.

I stressed energy-sector examples – most especially Nord Stream 1 and, now, Nord Stream 2 pipelines, built by German partnerships with Putin’s Russia, aiming to avoid Russian gas having to transit Ukraine to arrive in Germany and beyond. The degree of this open integration with Russia is unique in the EU. Consider: the Germany’s pre-Merkel chancellor, Schröder, heads the boards of both Gazprom and Rosneft; that an x-German Stazi secret-police officer is the CEO of Gazprom-owned Nord Stream 2 AG, and that overwhelming numbers of German experts “consult’ for Gazprom, including even the 2005-06 German Federal State Secretary for Defense(!) – who is a member of Merkel’s CDU/CSU party.

David Foster’s Roundtable, TRT-London
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My Warsaw Op-Ed: Nord Stream 2 deal marks a German win in setting allied strategy on Russia & Ukraine | Niemcy nie boją się Rosji. Boją się ryzyka płynącego z Ukrainy.

My Op-Ed on German motives for Nord Stream 2 appeared in the Dziennik Gazeta Pravwna 4 Aug. 2021 (no. 149 dziennik.pl, forsal.pl), derived from an English interview (below here) with Artur Ciechanowiicz (PAP, Brussels). [Polish Op-Ed link]

Read the Polish Op-Ed (PDF) “Germany is not afraid of Russia. It fears risks coming from Ukraine”

Here is my full English interview, expanded for clarity:

1) [AC] What are the consequences of the Nord Stream 2 deal between Washington and Berlin?

[T O’D] Stepping back a bit: this deal marks a victory by Berlin in its long and intensifying contest with its ally, the USA, over which of these two biggest transatlantic powers will decide the alliance’s strategy with respect to Russia and China. The two allies deeply disagree on this matter.

In the USA, both Democrats and Republicans have agreed since the Obama administration that “Great Power Competition” must be the strategy for the alliance versus Russia and China. The Americans strongly feel it is necessary to “decouple” from globalism’s deep trade and tech integration with China and Russia, that these states must either change their disrespect for global trade rules and moderate their increasingly aggressive geopolitical activities, or be isolated and forcibly contained.

Germany, with almost 50% of its GDP from global trade, deeply disagrees with this US strategy [i.e., German exports provide 46.9% of GDP, the USA’s only 11.7%]. Berlin likes global rules; but its unbalanced economy cannot afford trade decoupling and it broadly opposes forceful military containment of China and Russia. Instead, it wants only negotiations and occasional sanctions.

So, Nord Stream 2 is an iconic example of this clash, this “leadership fight” between the USA and Germany over the transatlantic alliance’s strategy towards Russia. Berlin wants to maintain energy ties at all costs, while the USA has long advocated maximum European energy independence from Russia, and to constrain Russia (and defend Ukraine) by forcing Putin to continue having to send gas across Ukraine to reach his European customers.

Russia, for its part, wants to re-incorporate former-Soviet Ukraine [plus Belarus, Moldova and Georgia, and minimally keep them outside of the EU and NATO], and has wanted to avoid having to send its gas to Europe via Ukraine. Moscow’s transit dependence on Ukraine not only provided income for Ukraine, this constrained Russian subversion and military aggression there, for fear that the transit pipelines could be interrupted by either Ukrainian state or non-state actors.

For Germany, the “insecurity” of having to import Russian gas through Ukraine deeply alarmed Berlin. And so it made a strategic decision over 20 years ago to partner with Russia, to build new pipelines to bring gas directly from Russia to Germany [via Nord Stream 1 and Nord Stream 2] and on to European customers long supplied with the same Russian gas but via Ukraine. The aim was to make Germany the new hub for distribution of Russian gas in Europe.

Given Berlin’s logic, the 2014 Russian war on Ukraine and its annexation of Crimea only made it more sure than ever of the dangers of relying on Russian gas imports that have to transit Ukraine, and it redoubled its efforts to complete NS2, notwithstanding this would undermine German relations with three consecutive US administrations and with many of its EU allies, esp. Poland and East-Central Europe – a region where its much-prized soft power has been sacrificed.

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My CGTN live: Merkel put Biden in a “damned if you do, damned if you don’t” bind on Nord Stream 2 deal

My live interview (22 July 2021) on the Nord Stream 2 deal between Germany and USA. with CGTN (London office of Chinese state broadcaster. This was not edited, or I would not post it here.)

I explain the bind which Berlin had put the Biden administration in for agreeing to waive sanctions on Nord Stream 2 (NS2) in return for this bad deal. The German side was playing hardball. Berlin had made clear to Washington (well before Biden arrived in office) that the pipeline would be finished regardless of sanctions.

The German (and the Danish) side had already allowed Gazprom-owned North Stream 2 AG to continue construction in their territorial waters even when reputable insurance companies and the reputable construction-commissioning firms had abandoned the project due to the threat of US sanctions; and Berlin had made it clear to the US side that it would be completed regardless of any further sanctions. Sanctions on German firms could be circumvented by Berlin continuing to allow Russian firms to do any work that German firms were prevented from performing. And, sanctioning German firms, or NS2 AG, would cause outrage in every German political party except for the Greens, the only German party clearly opposed to the project. However, the Greens had made clear they did not think US sanctions on German firms was an appropriate measure for an ally to take.

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My DW live: The US-German “Bad Deal” on Nord Stream 2 Pipeline

Here is my 21 July 2021 live interview on Germany’s Deutsche Welle about the new US-German deal, a “bad deal” on the Nord Stream 2 pipeline.

I told DW that the key reason the US has always opposed Nord Stream 2 (NS2) was that it undermines Ukraine’s security – as well as Poland’s and other eastern European and Baltic states’ security.

I told DW that one can argue with the Biden-Blinken assessment (as I have) that they “had to” waive sanctions on the Russian-owned NS2 company, insisting that the pipeline was going to be completed anyway. Indeed, German and Dutch regulators had already allowed work to proceed even when the insurance firm and commissioning firm had left due to sanction threats, and Berlin had promised it would be completed no matter the sanctions.

However, the additional factor, which US spokesmen cite only obliquely, is that Merkel’s government was evidently willing to deny Biden a show of transatlantic unity from which to confront Putin. This shows the extreme lengths Merkel’s government had gone to to insure success in her partnership with Putin to finish NS2..

For Moscow, the essential aim of this partnership has been to avoid the “risk” (as Russian officials have put it) of having to export its gas across Ukraine, a country Putin wants to annex and is now at war with.

For Berlin, the most essential aim of this partnership is to avoid the “risk” (as I have been told repeatedly) of having to import Russian gas via what has long been seen by German political and economic elites as an “insecure” Ukraine (although it is obviously Moscow responsible for this “insecurity”), and as an “unreliable” Ukraine (i.e., German elites had lost confidence in Ukraine to reform itself, or at least the willingness to risk the process).

This German pipeline partnership with Putin,, in other words, is a decision to pursue narrow-national interests. It elevates protection of Germany’s Russian gas supplies for its troubled domestic energy system, and protection of Russian gas supplies for its principal EU trading partners, above the interests of Ukraine’s security and independence as Putin pushes to reincorporate Ukraine into the Russian Federation.

Rather than showing solidarity by forcing Putin to continue shipping his gas to Germany and to other EU sates via Ukraine, the gas will now come directly to Germany. Germany will become the principal hub for distribution of Russian gas to Europe, and Berlin will “handle” any difficulties with Moscow and Putin. Of course, Berlin never consulted with the other EU Member states, much less Kyiv, on what amounts to its narrow-nationalist energy-security plan for Europe.

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My TRT TV | Biden’s Nord Stream 2 sanction waiver: Merkel’s price for unity before his Putin summit

It was my pleasure to be with Thierry Bros of Sciences Po University, Paris, and Peter Zalmayev, Ukrainian security analyst and executive director of Eurasian Democracy Initative on David Foster’s Roundtable on TRT World, London, broadcast 9 June 2021.

I discussed Biden’s apparent reasoning for waiving Nord Stream 2 sanctions:

First off, the German government of Angela Merkel simply would not cooperate otherwise. Allowing her pet energy project to go forward was the price she had demanded for trans-Atlantic “unity” before Biden’s summit with Putin.

(Aside: My research in Berlin and elsewhere has convinced me that, at no point from the late-Trump administration through Biden’s six months in office, did the German side actually engage in any meaningful “negotiation” or discussions with the US side to seek to find some compromise or to initiate a moratorium on construction. Not until Biden waived sanctions on Nord Stream 2 AG, and decided not to sanction any German firms inolved in construction did Merkel show any real interest in discussions. She emphasized her change of attitude on negotiating with Biden about: “what now are also the necessary commonalities in the relationship with Russia” in comments during a German national broadcast interview immediately following Biden’s sanctions waiver. Until this waiver, she had held up any real discussion of the pressing issues of trans-Atlantic unity-in-general, whcih urgently needed attention.

This, IMHO, again indicates the correctness of my assessment of the depth of the split in US-German relations that has festered since at least the Obama administration. See Nord Stream 2: Berlin-Washington Mutual Intransigence Shows Transatlantic Divide on Russia | My AICGS Analysis October 10, 2020)

Secondly, as the EU and NATO allies all realize, Biden has to have this summit with Putin for a number of reasons. As I indicated on the show, the summit is needed to discuss:

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My EuroNews: Why didn’t Biden sanction Nord Steam 2 AG or German firms? The Biden-Putin Summit. Berlin-Moscow gas-alliance kills US climate partnership.

Here are four issues on the Biden-Blinkin sanctions decision I discussed with EuroNews and other news media in the last few days:

-1- Regarding Biden’s waiving of sanctions on the company Nord Stream 2 AG and its head Matthias Warnig (former Stazi officer)​:

These sanctions would be unlikely to stop NS2​, though it would cause difficulty for the firm and the European oil and gas firms that are partnering with it​.  

I am not surprised, however, in light of the upcoming Biden-Putin summit. It should be noted that​ the Russian side (e.g., their ambassador here in Berlin) has made clear, publicly, that sanctions would kill the Biden-Putin summit — which both sides need on many hot issues​ (see my comments of yesterday, on Iran negotiations, and US necessity to withdraw on-the-ground forces from the Middle East​, and to focus on “Great Power Competition” vs. especially China, and Russia).

-2- As for effect of the new sanctions on the pipeline’s construction, and what options the US has: 

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My Op-Ed | Die Ukraine als „Zentralbank“ für europäische Energie | Ukraine as “Central Bank” for European Energy

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.

Lesen Sie weiter auf der Tagesspiegel-Backgrond Seite (der erste Zugang pro Monat ist kostenlos; ansonsten gibt es eine Paywall.))

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.

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China & Russia stick with Venezuela’s Maduro for the same reason the USA stuck with S. Viet Nam [My Energy Analytics Institute Q&A]

Venezuelan protest, 31 January 2019. Photo credit Deutsche Welle, German public broadcaster.

I was very happy to be interviewed for the Latin American “Energy Analytics Institute” (EAI), a Houston-based consultancy and news service. I’ve followed its work for years.

With Biden in and Trump out, everyone is debating how to deal with Maduro and his chavista regime that’s brought such misery and ruin in Venezuela. It’s not only the USA’s new LatAm team of Biden, Blinken and Nichols, but the EU, Norway, the OAS, the Lima Group, who are all looking for a new strategy. And so has the Venezuelan opposition, plus an increasingly important actor: the growing and doggedly persistent civil society organizations. Increasingly suffering forced-isolation from abroad, this array of social, cultural, media, medical, educational, nutrition, economic and political resistance groups do largely self-sufficient work to replace basic necessities and social-services, which the chavista government and ruined private sector can no longer provide.

However, in this brief Q&A what was addressed was not strategy per se; but a key underlying issue to understand in framing a strategy: the interests of both Moscow and Beijing as key obstacles to removal of the chavista regime. Read at EAI site (free) or Read below – Tom O’D.

China, Russia, Venezuela: Q&A With Thomas O’Donnell

(Energy Analytics Institute, 13.Feb.2021) — China and Russia continue to push around their might in Venezuela. Thomas O’Donnell with the Hertie School of Governance & Freie Universität-Berlin weighs in briefly here.

Energy Analytics Institute: What might China and Russia be willing to do this year to assist Venezuela’s President Nicolas Maduro?

Thomas O’Donnell, PhD: Beijing’s original (and perhaps still) plan for Venezuela was deep vertical integration mirroring PDVSA-Citgo Petroleum: new Faja upgraders, a pipeline to Colombia’s Pacific coast, dedicated ships, dedicated domestic Chinese refineries, etc. All very rational and lucrative for both sides. China became alarmed with Hugo Chavez’ unreliability and incompetence within a few years and with Maduro’s incapacity to reform within a year or so. The entire “oil-for-loans” history was a fallback strategy for Beijing – at least secure an oil stream with minimized risk. I have no doubt the Chinese Communist Party wants a new Caracas regime it can work with.

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Could Nord Stream 2 be axed? My guest appearance on Roundtable -TRT TV, London

This 10 February half-hour roundtable on TRT Television, London looked at the possibility of Nord Stream 2 being stopped by US sanctions. My thanks to host David Foster for the invite.

Today is 20 February, and I should add that since this was recorded, the Biden-Harris-Blinken administration has surprised Congress by sanctioning significantly fewer ships than it expected to be sanctioned for assisting Gazprom to lay pipe in Danish and German waters.

This White House attempt to generate goodwill with Berlin and with Merkel’s ruling coalition is generating bipartisan objections in Congress. Upcoming posts will analyze this development . Tom O’D. Below is the text from TRT network’s promotion of the show. and guests’ names and affiliations.

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I tell DW TV: Nord Stream 2 is geopolitical. Berlin & Moscow aim to reroute Russia-to-EU gas around “insecure” Ukraine.

My DW Business live, with host Chris Kober, Feb 12,

In this live interview with Deutsche Welle (DW.de) on 12 February, I told host Christoph Kober, that this pipeline is clearly “geopolitical”.

Without Nord Stream 2, Putin can’t significantly escalate his war inside Ukraine; he’d risk his lucrative gas-export business with EU. That’s because, without Nord Stream 2, most of the gas Russia exports to EU countries currently has to arrive via pipelines transiting Ukraine that belong to its finance ministry (the remainder Russia pipes to EU states arrives via Belarus-Poland).

I pointed out that, by invading Ukraine in 2014, Putin created his own worries about his lucrative gas business with the EU. Unfortunately for Ukraine, Germany’s government also frets about this gas, fully 40% of all EU imports, having to pass through Ukraine. And so, Berlin made a “realpolitik” decision in 2015, to assist Russia’s Gazprom to build a huge new a detour pipeline around Ukraine. (I analyzed this policy, in 2017, as a “Neue Neue Ost Politik” and here – i.e., the New New Eastern Politics, a third historical iteration of German elites’ reorientations towards Moscow.)

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