Category Archives: Energy and Geostrategy

My TRT StraightTalk: Nord Stream 2: Europe’s Energy crisis, Putin’s lever, Ukraine’s plight, & Berlin’s complicity

StraitTalk, 8 October. My comments (from Berlin) begin at 2:30, with Aura Sabadus of ICIS (in London) and TRT’s Ause Suberker interviewing (in Stockholm).

On Friday, 8 October, I was interviewed, with Aura Sabadus (@ASabadus) of ICIS-London, about Nord Stream 2’s impact on European energy politics on”Strait Talk” with TRT host Ayse Suberker.  We discussed the geopolitical aims of Russian and German leaders for partnering on this pipeline. 

I stressed, the issue is not whether Europe is dependent on Russian gas – it is and it will remain so for the foreseeable future for up to 40% of its imports. The issue is what route this gas takes to arrive from Russia into Europe

Consider: Russia historically exported 80% of the gas it sends to Europe using massive Soviet-era pipelines transiting Ukraine, the remainder via a Belarus-Poland-Germany pipeline. However, for 20 years Continue reading

“EU leaders will consider creating a strategic gas reserve” [TVPoland explains I proposed this in August: “Ukraine as a Central Bank of Energy”]

ursula_von-der-leyen_EU_gas_strategic_reserve_tvp_pap_03oct21For explanation of  my proposal, go below to bold text on my August Tagesspiegel Op-Ed.

RAJA ME  |

EU leaders will discuss the idea of ​​creating a strategic EU gas reserve and decoupling electricity prices from gas prices, said the head of the European Commission, Ursula von der Leyen.

– When it comes to gas, we are dependent on imports – 90 percent. gas is imported. The economies in the world are growing, so is the demand. But the supply is not correspondingly greater. We are very grateful that Norway is increasing production, but it seems that this is not the case in Russia, noted the head of the European Commission, visiting Estonia. In her opinion, the solution to the problem are investments in renewable energy sources, which should make the Community independent of imports and stabilize prices.

– In the short term, we will talk at the European Council, not only this evening (Tuesday), but in two weeks’ time at the formal Council of Europe, how to deal with storage, the strategic reserve and we will look at the overall price structure on the electricity market. Electricity prices are high due to high gas prices and we have to consider the possibility of (them) decoupling because we have much cheaper energy from renewable sources, said von der Leyen

On Tuesday evening, an informal meeting of European leaders will take place in Slovenia ahead of the EU-Western Balkans summit scheduled for Wednesday.

According to unofficial diplomatic sources in Brussels, Poland wants the European Commission to conduct investigations into the manipulation of the natural gas market by the Russian company Gazprom, which are causing the increase in gas prices in the EU. This issue is expected to appear at the EU summit on October 21-22.

Back in April, American energy market analyst Thomas O’Donnell predicted that Russia would use gas supplies to build strategic domination. The EU’s response should be to create a kind of gas ‘central bank’ in Ukrainian warehouses and use this country as a buffer, he proposed.

Ukraine is a key element of the strategic gas reserve

– Shortly after the beginning of the Maidan revolution and the Russian aggression, Ukraine, with the support of the EU, quickly made technical modifications to the export pipelines to Slovakia, Poland, Hungary and Romania in such a way as to enable a reverse. This quickly freed Kiev from having no alternative to buying Russian gas, said the expert.

– Moreover, the Kremlin cannot so easily promote favorable oligarchs – he envisaged adding that the implementation of this idea was only a matter of legislation.

– The EU could designate warehouses in Ukraine, Germany and France as the so-called strategic reserves that must always hold a certain minimum amount of gas. In the event of any aggression by Russia against Ukraine or other countries, these warehouses would be launched by a special EU-US committee or within the OECD, and Russian pipelines would be cut, the analyst suggested.

– Gas belonging to Gazprom, which stores huge amounts of gas in Germany and other EU countries, should in this case be nationalized – the expert believes.

Responding to the objection that such ideas sounded a bit fantastic, he explained that this is almost exactly how the international oil security system has operated for 50 years: in the event of a crisis, 90-day strategic oil reserves are deployed in each member state of the International Energy Agency.

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 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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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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My EuroNews #3: US Sanctions killing Nord Stream 2. Yet Berlin persists trying, with Moscow.

My 3rd EuroNews Nord Stream 2 sanctions interview, 6 January 2021 (After 30-seconds intro)

[This post is a dey late due to the violent attack on the US Capitol orchestrated by the outgoing-president and his followers. This assault has been defeated and the election is being certified by Congress. Trump will soon leave and Biden will take office in accordance with the Constitution and laws. T. O’D.]

The EuroNews Morning Show asked me [yesterday 6 January,] again about the Nord Stream 2 pipeline. Two key points made in the earlier interviews were:

  1. That the plans of Nord Stream 2 AG (NS2 AG) to restart pipelaying before the holidays in German waters was a propaganda exercise (viz, “a disinformation campaign”) orchestrated by Moscow and Gazprom to create the impression the pipeline can be finished.
  2. Despite this new pipelaying “bravado”, the pipeline was effectively “dead” because of the US sanctions.

These points were an assessment of the impact of the new sanctions law, which was about to be enacted by the US Congress.  This is the “Clarifications” of the Protecting Europe’s Energy Security Act, or PEESCA, which was enacted December 2021, despite a veto by President Trump. These PEESCA sanctions have been added to the previous PEESCA (December 2002) sanctions and the Countering America’s Adversaries Through Sanctions Act (CAATSA, initially 2017) sanctions against NS2.

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My EuroNews Q&A: All German parties back Nord Stream 2 except Greens; USA says it frees Putin to subvert Ukraine & Belarus

My EuroNews live Morning Show interview today (9 Dec 20) with Rosie Wright:

I explains why the German far-right AfD party, which went to Moscow yesterday to show Lavrov their party’s support for Nord Stream 2, supports the project. The AfD supports it along with all other German parties, from “far-right to far-left, and those in the middle, except the Greens.”

Also, I explain how Europe’s dependence on Russian gas will require decades to escape.

However, what are the strategic objectives of Moscow in building Nord Stream 2? I explain Putin wants to build Nord Steam 2 through the Baltic Sea to Germany as well as to complete the Turk Stream (formerly South Stream) pipeline across the Black Sea and Turkey and on into the Balkans and then into Central Europe, and also west to Italy. The reason for this is so that Gazprom does not have to send Russian gas to Europe via Ukraine and Belarus, countries that are in rebellion against Russian dominance.

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My EuroNews live interview: Contrary to Moscow’s disinformation & bravado, Nord Stream 2 pipeline is dead.

Host Rosie Wright, of EuroNews Morning Show interviewed me today. I explain how Nord Stream 2 AG’s plan to lay 2.6 kilometers of pipe in shallow German waters actually shows that US sanctions have effectively killed this German-Russian mega natural gas project designed to help both countries avoid shipping/receiving gas that transits Ukraine (mostly), Belarus and Poland.

The pipeline is not bringing “new” gas to Europe, but is designed to end Gazprom’s (the Russian-state gas export monopoly) having to ship its gas exported to Europe across regions which Putin’s regime wants to subvert and pressure (including by military means) back into the Russian orbit. Ukraine and Belarus.

Berlin for its part, does not want to risk the EU’s gas supply by standing up to Moscow’s subversion against Ukraine and Belarus. The USA (i.e., Congress, on a bipartisan basis, and not Trump) has imposed harsh sanctions that are succeeding in stopping completion of the project. The Biden administration will not alter this reality; Biden has opposed this project and always championed the cause of Ukraine reform and independence from Russian dominance, in favor of moving towards the EU.

Note: EuroNews is the most watched news in Europe, reaching 135 million viewers/month. — Comments and critiques most welcomed, either below, or privately to twod-at-umich.edu. — Best, Tom O’D.