We analyzed what Putin aims to achieve, and why President Erdogan of Turkey has so rapidly accepted this proposal. This is obviously, I said, a scheme by Putin to try to save his natural gas business to Europe.
Is this even a real proposal? Nowadays, after becoming so unreliable a supplier of gas to Europe, in fact having weaponized Russian gas deliveries, it is difficult for anyone to take this proposal seriously. Erdogan may have many significant problems; however he and Turkey are not so naieve as to do what Germany and Austria forced the European Union to do, i.e., become overdependent on Russian gas, especially given the deep energy crisis Europe is currently going through.
But, also consider this (as I explained towards the end): This proposal of sending Nord Stream gas, originating in Northern Urengoy province, above the Artic Circle, would also require a big, new pipeline laying project, running at least from perhaps near the Ukrainian border south towards the Black Sea and then onto Turkey. This would have a significant cost. And, by the time this could be finished – in perhaps five or more years – the world will have moved on. By that time, new LNG and natural gas production potential in the USA, Qatar, Australia, Algeria, Norway, Israel (sent to Egypt for liquification) and likely many others’, will have been developed and be on the global market. On this time horizon, there would be plenty of diverse sources of gas fully able to replace Russian export capacities.
I also explained the history of the South Stream Pipeline …
Jun 17, 2022 Today, Gazprom announced a further cut in exports of gas via Nord Stream 1 to Germany and on into Europe. Earlier this week, they had cut 40%, now it is 60% of the 55 billion cubic meters per year (bcm) that normally flows in this pipe.
I explained that the Gazprom excuse – -that it could not re-import some compressor parts it had sent to Siemens to repair in Canada due to sanctions — appears as a convenient, manufactured excuse.
I pointed out that a one-off sanctions waiver from the USA, EU and/or Canada for the reimportation of these very specific parts could likely be easily arranged – and if the gas did not again flow fully, Gazprom’s ruse would be clearly exposed.
However, as I said, this is more accurately understood as simply another step in the weaponization of the over-dependence of the European Union (and esp. of Germany, Austria and Italy) on Russian gas imports, a game which Mr. Putin began in earnest in August of 2021.
I told Al Jazeera that Finland is well prepared, having worked since 2017 with Estonia, Latvia and Lithuania – the Baltic states – and with Poland to connect them all together with new pipelines, also to access LNG, storage and soon, new supplies from Norway.
Finland has also rented a regasification ship, from a US firm, to receive 5 billion cubic meters per year of LNG, whch will be plenty to supply both itself and Estonia in the wake of Putin cutting off Gazprom supplies of natural gas. Finland refuses, as did Poland too, to pay Moscow in rubles and so are being punished by Putin.
26.01.2022. Experts Wahid Machram, market analyst in Dubai; Samuel Ramadi at Oxford University, UK. and TRT Roundtable host David Foster in London made important points. Here’s a key assessment I made.:
There is a new and growing asymmetry between the European Union and Russia in energy supplies – one increasingly favoring Moscow.
Europe has opened itself to energy blackmail. The present winter 2021-22 gas shortage and skyrocketing prices are only one part. There is also the real possibility of Putin cutting off the pipeline gas he is still supplying in the event that Europe, esp. Germany, opposes any Russian invasion of Ukraine.
About the new EU-Russia growing energy asymmetry:
On the demand side, Germany and Europe generally increasingly need natural gas, and are growing more dependent on Russian supplies, contrary to the promises of rapid progress to a carbon-free future of the German Green Party and others. The EU, and especially Berlin, have adopted ideologically-determind, technologically unrealistic and expensive energy-transition policies, with little concern for energy-supply security. This has made Europe increasingly dependent on Russian gas imports – 40% at present of total gas imports,
Meanwhile, on the supply side, Russia, the major European supplier, is increasingly finding ways to diversify its gas customer base away from Europe, to the Far East, especially to China, and to Eurasia generally. It also has new outlets for its vast Arctic gas resources by converting it to LNG that can go by ship to anywhere in the world.
Reportedly, the EU Commission plans to soon include nuclear power in its green finance taxonomy, finally making it eligible for favorable financing and carbon credits on a par with wind and solar.
This could be spun two ways: as a victory for science over populist capture of climate policies, or as a tipping point in Brussels angst at the growing complexities and costs of the “100% renewables and no nuclear” model.
In reality, it’s some and some.
On the one hand, in March, the Commission received reports solicited from the Joint Research Centre (JRC), its scientific expert arm, finding that nuclear waste is “manageable”, posing no “significant” harm to the environment, and that nuclear energy has been demonstrated to be eminently safe.
However, these assessments are not surprising. Had the Commission requested these years ago, they undoubtedly would have concluded similarly. Nuclear, public-health, risk-assessment and other expert bodies have been saying these things for years (full disclosure: my PhD is in experimental nuclear physics ).
The question then is, why is this scientific consensus only now becoming actionable for the Commission?
Here is my talk [English & Ukrainian videos] for the Ukraine Energy Security Dialogue of 01.12.21, via Zoom, organized by Kyiv’s Dixie Group. Program & Speakers are below.
I outlined failures of the legal and political models Russia’s Gazprom has embraced to eventually bring the Nord Stream 2 pipeline into operation under the anti-monopoly provisions of the EU’s Third Energy Package law..
Critical observers have understandably interpreted the public optimism and “gas-Godfather”-like posturing of Kremlin and Gazprom officials as evidence of self-confidence, even arrogance. In contrast, here I outlined what actually amounts to a history of repeated failures of Nord Stream 2 AG strategies.
I termed its first two failed strategies as “Plan A” and “Plan B,” and the current one as “Plan C.”
Here’s my extended interview in Kyiv with two great Kosatka.Media journalists [Read in UA, RU]
18 NOVEMBER 2021 — AUTHOR YAROSLAV MARKIN, TETIANA HUZENKO In 2021, the energy sector of Ukraine faced myriad threats related to the completion of Nord Stream 2, increasing gas prices and coal shortage just before the heating season. At the same time, green trends require decarbonizing the industry and developing the hydrogen direction.
Kosatka.Media discussed what direction is better for Ukraine, whether it should wait for the protection against Nord Stream 2, and where global green trends could take us, with Dr. Thomas W. O’Donnell, international expert and senior energy and geopolitics analyst at GlobalBarrel.com, who participated in the Ukraine Gas Investment Congress held in late October in Kyiv.
One of the key messages at the congress is that whatever the ‘green’ trends are, gas is a transition fuel and we will use it for a long time. Are there any other case scenarios? How should Ukraine act in this situation?
In the long run, we want to have a world that’s not dependent on hydrocarbons. The worst hydrocarbon is lignite and brown coal. And that’s what people s\should concentrate on eliminating. Natural gas in fact is a great way to eliminate coal.
It’s actually an improvement for Ukraine, not only because of global warming, because of CO2, but also for the health of the people since natural gas does not produce environmental pollution. So, increasing the use of natural gas (or also nuclear energy) in a country like Ukraine is to the benefit of the environment and to the people’s health.
However, Ukraine is not a typical European country, it is a country that unfortunately is at war. In such a situation, it has found an intelligent way to access natural gas, which is virtual reverse flow.
Putin’s recent gas-Godfather-like statements that Nord Stream 2 could alleviate the current European natural gas price and supply crisis is an obvious attempt to pressure the EU to rush Nord Stream 2 approval in ways violating the EU’s own rule of law.
As a Polish expert wrote in 2019,: “The amendment to the [European Union’s] gas directive explicitly confirms that EU law applies in the case of Nord Stream 2 (that is, to the section running through German territorial sea), including the rules on unbundling, third-party access, independent operators et al.: (Agata Łoskot-Strachota, “The gas directive revision: EU law poses problems for Nord Stream 2,” OSW, Warsaw, 21.02.2-19.).
However, Putin’s hubris should be taken with a grain of salt. In reality, his options in this regard are subject to current technical-economic constraints of the Russia gas sector, as my research had indicated in recent weeks.
Russian domestic storage was announced to be at 97% full mid-last-week due to its continuing all-out Gazprom filling campaign, reportedly at the high rate of about 300 million cubic meters/day (mcm/d). The plan had been to finish by 1 November.. Thereafter, this maxed-out production has to immediately be choked off or be sent somewhere else – and indeed there is only one option; but it is not Nord Stream 2…
One caveat: a recently announced 7 November Gazprom export start date did not made sense. Where would the maxed out production flows go from 1 to 7 November? However, an article yesterday by Bloomburg [possible paywall] clarifies “Gazprom said Wednesday that the Russian re-injection campaign would be a week longer than the original Nov. 1 conclusion.” This is quite plausible – it is simply taking an extra six days to top off Russian domestic storage.
So to reiterate points I have stressed over the past few weeks (e.g., at Naftogaz’ Ukraine Gas investment Congress closing panel in Kyiv last Thursday-I’ll put a video of this here soon- and in various interviews):
First, while Putin has relished playing the gas-mafia Godfather (e.g., at the St Petersburg gas conference two weeks ago), asserting that, if Nord Stream 2 is rapidly approved, Gazprom exports could save Europe this winter, he has been merely posturing as the strongman decider. He wanted to appear to be craftily withholding extra, non-contracted gas supplies needed to fill the company’s storage facilities in Germany and throughout the EU, all still now at worryingly low levels long after the traditional filling season ended at the start of October.
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 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.
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.
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]
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.
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.