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.
My live discussion with DW (Deutsche Welle, the German national broadcaster; in English) on 14 Jun 2022 on Gazprom Germania’s Euro 10 b loan from the German state. I stressed that German Energy policy has made the EU hostage to Russian energy, and enabled Moscow’s Ukraine war. Why did Germany do this?
From 1980-to-2022 German elites depended on their Russian oil-and-gas partnership as a means to carve out a space for German capital despite general USA predominance, while still remaining inside the USA-protected Western alliance and global trade system. Their geostrategic gamble — a “strategic balancing” of Russia for perogatives vis-a-vis USA predominance — has led to disaster..
We discussed the reasons the German government is offering up to Euro10 billion to bail out Gazprom Germania, which was a daughter of Russian state gas export monopoly, Gazprom, in St. Petersburg.
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.)
This is a simple post. I wanted to share my video of the Wall of Remembrance in Kyiv fo;r 4,000 Ukrainian soldiers killed fighting Russian aggression since 2014. I estimated there were photos of about 3,100 of these soldiers on the wall. I made the video 26 October 2021; by then, the photos went to July 2020.
I was in Kyiv for a congress, and the video was spontaneous, intended for family back in Berlin and the States.
This wall is around the St. Michaels Monastery. I hadn’t come up this path to St. Michaels and on into central Kyiv before. So, as I was making this video, I was discovering the soldiers’ memorial for the first time. On other visits,, I’d taken the cable car up, and passed by the Maidan martyrs’ memorial wall – which is at the end of this video. This time I had walked some kilometers, at sunset, from my hotel across from the Rada and the Presidential Palace, which are below, at the level of the Dnieper River.
Why am I posting this video now, for the public?
One reason is to put human faces on the geopolitics I analyze in this blog and in my work.
More particularly, I was reading about the classified briefings on Capital Hill last week for senators and representatives by US Secretary of Defense Austin and Secretary of State Blinken. They reportedly outlined various scenarios they deem likely for what sort of military aggression Putin is planning.
The numbers of Ukrainian casualties they reportedly projected – mostly civilians – number in the many thousands depending on the particular invasion scenario Moscow chooses (see the NYT). Of course, there are disagreements between European and USA officials as to which scenario Putin will choose; but that is irrelevant as to the essential character of what Putin’s Russian Federation is threatening: an offensive, an invasion, a war of aggression. Under any of the scenarios, many more Ukrainians will die than have died since 2014, … and I was thinking that their faces will look exactly like the faces here in my video.
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.
The continued refusal of the recently arrived German coalition government, in the face of clear threats by Putin to again invade Ukraine, to clearly abandon this huge pipeline project is upsetting to many NATO partners and Ukraine. In particular, the new German Foreign Minister, Annalena Baerbock, co-leader of the Green Party, had constantly called for the immediate abandonment of this project while her party was in the opposition during the Angela-Merkel-led coalition government. However, in government, she has merely repeated the well-known fact that this pipeline must meet EU law requirements, and so far this is not possible. Moreover, even more disappointing to many NATO allies, the new government, led by the Social Democrat Olaf Scholtz, has also blocked NATO from sending various “offensive” weapons to Ukraine to defend itself.
This audio file is an eight-minute DW-edited version of a much longer interview we taped, so of course these are not my complete statements on these issues. Hopefully these brief answers do shed light on the perceived national interests of German leaders across what are now three separate governments and 18+ years of partnering with Moscow on these huge Ukraine-detour pipelines: Nord Stream and Nord Stream 2.