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.
Kostaka.Media (Kyiv) independent journalists continue informing the Ukranian people on energy affairs. I was interviewed from afar by YAROSLAV MARKIN, TETIANA HUZENKO. We focused on gas issues – would Putin cut Europe’s gas? What have the Americans been organizing, now with the Europeans? How would this affect Europe, Ukraine and Putin’s income?
Below are links to the article in Kostaka’s three languages (EN, RU, UA). I pasted in the English one below, in case you have access problems. This interview had to be written, not audio/video, due to wartime difficulties. [Also, here’s my previous (in-person Kyiv) interview with Kostaka.Media.]
Biden’s Gas Air Lift and the impact on Kremlin revenue: Thomas W. O’Donnell on the russian gas embargo 28 April 2022 — Author YAROSLAV MARKIN, TETIANA HUZENKO Europe is going to cut the consumption of gas by a ⅔ in 2022, that is obviously will affect the Kremlin’s revenue. However, an embargo is highly possible as well. Both the Kremlin and the EU, in response to Russia’s new war crimes in Ukraine, could stop the gas flows. In such a case, LNG supplies are to help weather the crisis of 2022-2023 via Biden Air Lift. The last mentioned is being set up by the US and EU diplomats and is patterned on the Berlin Air Lift of 1949. Berlin Air Lift was a system of food and coal supply during the times when the USSR had been blocking land routes. This would be the end of Russian gas supplies to Europe forever, an international expert and senior energy and geopolitics analyst at GlobalBarrel.com, Dr Thomas W. O’Donnell believes. He told Kosatka.Media how quickly Europe would be able to abandon Russian gas, what alternative supply routes could be used, and whether Hungary and Austria, obsessed with Russian gas, could prevent this.
The analogue of Putin’s army in the energy sector • How much gas does Europe import from Russia per year? Who are the major consumers?
There are two different market processes whereby Russian gas is purchased by Europe. If we speak about only gas delivered by pipeline, these are: І. Via long-term contracts, agreements which are for natural gas to be delivered for several years, perhaps from five to as much as 20 years.
ІІ. Via the “spot” market. These are short-term contracts for gas to be delivered the following month. It is also possible to buy gas day-by-day, where traders agree to a price for gas delivered the next day. Here, gas traders consult the future’s market, which has set the price for gas delivered the next day, or the next month, or some number of months in the future.
Re: Urgente Pedido de Entrevista Periodística – Corresponsales Clarín y La Nación – Argentina
De Maria E… … Fri, Apr 29, 11:50 PM
Dr. O ´Donnell, … Estas son las preguntas para la entrevista del domingo:
1¿Alemania tiene otra posibilidad que no sea seguir comprando el gas ruso? ¿Cuáles serían sus otras opciones?
Repuesta: Antes que nada, muchas gracias por esta oportunidad de hablar con su audiencia argentina.
Pues, debo señalar que hay dos problemas diferentes: el suministro de petróleo ruso a Alemania y Europa y el suministro de gas ruso a Alemania y Europa. Me preguntas por el gas. El gas es mucho más difícil para Europa y para Alemania que el petróleo Hay dos casos: una reducción gradual o parcial de gas o un corte inmediato.
Un corte gradual se puede manejar bastante bien. Ahora Putin está tratando de dividir y conquistar Europa cortando el suministro de gas a Polonia y Bulgaria.
Un recorte inmediato, ya sea por parte de Putin o debido a las sanciones de la UE, crearía una gran crisis energética en Europa. Sin embargo, es importante entender que, al final, Putin está en una posición mucho más débil.
Si Putin corta todos los suministros de gas a Europa, ahora no hay suficiente gas en el mercado mundial para compensar. Pero Occidente, y especialmente EE. UU., la administración Biden, se ha estado preparando para esto al menos dos meses antes de que Putin invadiera Ucrania, incluso antes de que Europa creyera las advertencias de EE. UU. de que Putin atacaría Ucrania.
24 April 2022: My Asharq/live evening TV news interview is a bit over seven minutes.
Would an oil embargo be “effective”?
I respond, What is “effective”? Clearly it would not end the war. However, a Ukranian soldier who decides to give his life to resist the Russian invaders has no illusion that his or her sacrifice, on its own, will end the war. But, he will makes what contribution he can.
So, the German leadership refuses to send Ukraine heavy weapons, and certainly won’t send German troops. However, Germany and the EU can at least step up and make this contribution – sanctionRussian oil now. This will greatly hinder Putin’s ability, within two to three months, to finance his war.
We discuss the question raised by the German leadership – by Chancellor Scholz (SPD party), Energy and Environment Minister Habeck (Greens) and Finance Minister Lindner (FDP liberals) – that supposedly an embargo in Russian oil (or gas) would do more harm to German citizens than to the Russian leadership.
The argument heard repeatedly from Berlin is that this is “not worth it” and also, that such an embargo it “would not end the war.”
Also, I answer the question of how much oil could Putin’s Russia divert from Europe to India if the EU and Germany embargoed oil.
I think I posed useful answers to these questions given the time we had. Your thoughts and critiques are welcomed, and solicited.
TRT’s Nexus with Matthew Moore, was recorded 30 April 2021, from London.
My fellow guests were:
Patrick Boyle, Professor of Finance at Kings College — London, UK
Andrii Dligach, Co-Founder of the Centre for Economic Recovery — Kyiv, Ukraine
Maxum Bouev, Vice Rector at the New Economic School — Moscow, Russia
Myself, Thomas O’Donnell, Energy and Geopolitical Analyst, also teaching in — Berlin, Germany
My further comment: Russian oil can perfectly well be sanctioned now by Europe, and they should do it. It would deprive Putin’s regime of his main remaining source of income. Natural gas will be more difficult, but it is also possible to be sanctoned. It shoudl be done.
Note: It is indeed possible for the EU – including Germany too – to immediately cut Russian oil imports to zero and not suffer prolonged high oil prices. How? I will explain in a coming post. This is a topic I have been working on intensively the past couple weeks.
I mention some of my (and others’) rationale for saying this in my answer to the second question from Al Jazeera. NOTE: A very good reference on this is: Christof Rühl speaking last week to bne inelligence. I strongly concur with him. (this note added 15 Mar.)
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.
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:
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.
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.
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.)
“This is either a conscious Russian disinformation scheme to collect supplies from naive firms, or it’s a really irresponsible move by the foundation,” said Thomas O’Donnell, energy and geopolitics analyst at Hertie School of Governance. (“German green foundation joins efforts to complete Nord Stream 2,” Financial Times, 21 Jan 2020, see here, or PDF here.)
The FT’s Erika Solomon interviewed me about the fake “climate-protection” foundation established by the legislature of the German state of Mecklenburg-West Pomerania (German initials MV). State officials stated intent is to help Gazprom, the Russian state gas monopoly, overcome US sanctions to finish building the Nord Stream 2 pipeline. Their new foundation is financed with €20 million from Gazprom (sole owner of Nord Stream 2 AG), and €200,000 from the state government.
The strategy is for the foundation to purchase “rare and hard to find” equipment Nord Stream 2 AG will need to finish the pipeline, but which firms cannot sell directly to it because of US sanctions against the project. MV politicians have called their foundation a “clever mechanism” to protect firms from sanctions. According to the state’s energy minister, Mr. Christian Pegel (SPD), the foundation will be a “type of hardware-store shelf” (“Baumarktregal-Variante“) that then supplies the Gazprom operation. The strategy here is that with the “climate-protection” foundation acting as the middleman, German firms will both not deal directly with Gazprom’s sanctioned Nord Stream 2 project, and the foundation’s purchases will be completed “before the deadline” when sanctions are applied.
However, there are no such loopholes to be exploited.
These two interviews critique the new “environmental foundation” founded by a local German state, and paid for 99% by Russia’s Gazrpom, as a self-described “clever loophole” to circumvent US sanctions. The publicly admitted scheme is to have the foundation purchase materials and equipment from the specialty companies able to supply them, and have the foundation later supply these materials directly to Gazprom, enabling Gazprom to finish building the pipeline beneath the Baltic Sea. The foundation” is telling firms this will protect them from being sanctioned for selling directly to Gazprom. However, the US sanctions specifically target “circumvention” of sanctions, and I explain that German firms are ill-advised or naïve to cooperate, risking ruinous sanctions.
The permit from Denmark has been received and new pipes for Nord Stream 2 could soon be laid. However, it is more questionable than ever whether the American sanctions threats can be circumvented.
The completion of Nord Stream 2 remains uncertain. 94 percent of the Baltic Sea gas pipeline has been laid, but the last few meters are still stuck. After the departure of the Dutch-Swiss laying vessels in December 2019, progress was only brief when 2.6 kilometers were erected a few weeks ago . It was not a breakthrough: the pipeline consists of two parallel strands with a total length of around 2,460 kilometers. 30 kilometers are still missing in German, 120 kilometers in Danish waters.
Theoretically, things could continue this week on Friday for the construction consortium Nord Stream 2 AG, a subsidiary of the Russian state group Gazprom. From January 15th it has a permit from the Danish Maritime Administration, and the Russian ship Fortuna is authorized for the work. But according to reports, only preliminary work is planned.
[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:
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.
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.