Who Will Stop Russian Energy March to Europe?

By Valentinas Mitė, a reporter for the RFE/RL

Dependence of the states of Eastern and Middle Europe from Russian gas and oil is practically absolute. This calls a concern that energy dependence can transform into a political one.

Provided Russia was a normal democratic and liberal state, there would be no such fears. On the contrary – the kind of neighbor would be a gift for the European Union, which is not reach with energy resources.

Unfortunately, Russia is really distant from Western democracy, and it uses natural resources for political objectives primarily.

For 10 years in power the President of Russia Vladimir Putin achieved that “Gazprom” and “LUKOIL” became state companies (state owns 51% of shares), and the first mean for the Kremlin to reach its geopolitical goals. Business for these companies is a secondary although an important part. With no doubt, gas and oil are the most significant sources of the Russian budget profit allowing to pay pensions timely, to provide other social services to the citizens, modernize economy and re-weapon army. However, the Kremlin considers as priority geopolitical intentions, but not internal demands.

Russia has repeatedly stated that it is the most secure supplier of resources, however, energy was repeatedly used as a political weapon. This was nor due technical reasons that “Mažeikių nafta” doesn’t deliver raw material from Russia via the oil pipeline, this was nor due technical reasons that the Czech Republic reduced gas supplies after the singing of  the treaty on anti-missile defense system allocation with the USA. No technical obstacles arose when a pro-western President Viktor Yushchenko came in power in Ukraine.

The kind of the Kremlin behavior is explained by an outdated policy of influence zones. Within the mind of the Kremlin, the sphere of influence of Russia is spread almost on all the area of the former USSR and the adjoining states. However, it is also ready to have influence western Europe and other places of the world, so much that many western states innocently think that energy resources supplies for Russia is a pure business. It’s important that the greed of western companies, where money is decisive, despite who pays and demands these or that conditions, which are sometimes absolutely unimaginable in West. A number of western companies (for example British Petroleum), having invested millions into Russian energy sector, have “got burnt” when the Kremlin decided that the investments were too high and western companies gained too high specific weight. Due to “economic reasons” or under the accusation of “corruption” western companies were deprived of license.

The most significant mean with the help of which Russia achieves its geopolitical goals is “Gazprom”, which used to be managed by the current President of Russia Dmitry Medvedev. By the way, “Gazprom” is engaged not only with gas supplies, but also controls over the most part of Russian Mass Media.

“Gazprom” also intends to extend its activity within oil business.

Let’s analyze the practice of Russian energy invasion to Europe.

It is especially well demonstrated on the example of gas supplies. In the north of Europe they are piping the gas pipeline Nord Stream around Baltic states and Poland.

Former Chancellor of Germany Gerhard Schröder, a close friend of Putin, with his actions showed that common interests of the EU, especially of new members of the Union, he despises, as the treaty with Russia was signed regardless the opinions of these states. This decision contradicts to the one, which Brussels bureaucrats call the principle of “solidarity”. Moreover, hardly he lost the position of chancellor, he was employed by the company, constructing the Nord Stream.

This is such a disgraceful step that it’s even hard to comment on it.

In South Europe “Gazprom” policy is so active, especially because the EU is getting ready to the construction of Nabucco gas pipeline, which will lie around Russia.Partially due to this, Russia strives to recover its influence within Caucasus, partially this is why Russia has occupied a part of Georgia.

The South Stream gas pipeline will go from Russia though the Black Sea to Bulgaria and Serbia and Hungary to Austria. This will be the first gas pipeline in Europe, owned by “Gazprom”. It’s planed to finish its construction by 2015. Via this pipeline gas will be supplied not only from Russia, but also from Middle Asia states. Russia buys gas from them under an extremely low price, and sells to West under an international one. The kind of policy is possible not only due to pro-Russian idea of these states, but also due to that the gas pipeline is a property of "Gazprom".

The Kremlin doesn’t favor the intention of some Middle Asia states to pipe their own gas pipelines and to supply gas independently to China, which possesses a great economic potential, but is poor for natural resources. “Gazprom” has its plans towards China, that is why it doesn’t need competitors, especially those which have a lot of gas.

It’s difficult to predict which will be the first Nabucco or South Stream.
 

> Nabucco Pipeline Map
 

> South Stream On The Map Of Europe
 
> Specifications of the South Stream Project
 
Russian politicians doubt that Nabucco will be economically efficient after the construction of the South Stream. Western investors, let’s say, Italian company ENI, nodding in the sign of consent.

Geopolitical situation is the following, at the moment Nabucco is able to supply gas only from Azerbaijan. It’s hardly possible to lay a pipeline though the Caspian Sea as economic zones are not outlined within this sea and Russia will surely be against the construction. Nabucco for sure would be efficient provided the situation in Iran changed or the situation in Iraq stabilized. However, the worst thing is that the EU lacks political will for this project.

“Gazprom” is especially interested in the control over gas pipelines. In Belarus this company owns 50% of “Beltransgaz”. However transit though Belarus is incomparably lower than through Ukraine. “Gazprom” would like to buy 51% of shares of Ukrainian “Naftogaz”, but still even a pro-Moscow President Viktor Yanukovich doesn’t hurry to sign the kind of an agreement. By the way, “Gazprom” owns 37% of shares of “Lietuvos Dujos”.

It seems, that an energy crusade of the Kremlin is unstoppable, however, a new factor appear which can force “Gazprom” to adjust its plans in Europe seriously, and maybe even to lose energy weapon for the influence in individual states of Europe,  and sometimes to make the total EU policy dependent from Russia.

Lately the export of “Gazprom” gas to the EU has reduced. The company explains this with a world financial crisis. But there are also other factors. European states have begun to use more condensed gas, they build new terminals for its supplies. Condensed gas can be delivered in tankers and not obligatory from Russia. This alternative is extremely important for Lithuania, and it’s optimistic that the Government realizes the importance and tries to make definite steps forward.

However, even a greater breakthrough will be possible, if the forecast on a big field of shale gas in Poland is confirmed. By the way, already now, Russia is not the biggest gas producer in the world. Recently it was left behind by the USA, where they produce exactly shale gas intensively. Previous week, during the visit to Poland the US State Secretary Hillary Clinton signed an agreement on shale gas export.

At the moment, the development of shale gas fields is accomplished by American companies Chevron, ExxonMobil and Halliburton. Provided optimistic prognoses are confirmed, common gas resources of the EU will increase in 50%. Poland won’t have to import gas at all, and Lithuania due to the export of gas from the friendly EUstate will solve the issue of energy dependence from Russia.

By the way, some Lithuanian specialists think that shale gas can also be in Lithuania, as the field locates by the border with Lithuania. Probably, Ukraine also possess this gas. But, without technologic and technical assistance of the USA – world leader of shale gas production – not reach states Poland, Lithuania or Ukraine won’t be able to accomplish this grandiose project.

With the growth of gas production and after the start of shale gas implementing, Nord Stream and South Stream will lose their significance.

Lithuania makes also other logic steps. Recently Prime Minister Andrius Kubilius met the President of Belarus Alexander Lukashenko and discussed the construction of the terminal of condensed gas in Klaipeda. Lithuanian Prime Minister somehow connected this issue with human rights situation in Belarus, forgetting that human rights didn’t play any role within Nord Stream construction; they were omitted by the USA when it needed bases in the states of Middle Asia. Why should Lithuania behave in another way? Moreover, it would have to argue for a long time which country Russia or Belarus is more authoritarian.
 
 
Translated by EuroDialogueXXI from ru.delfi.lt
 
 
27.08.2010
 
 

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