The “Energy Partnership” With Russia: Lessons from the Past, Dangers for the Future

Today the trap patiently built by Moscow against Europe for 20 years is closing. Russia has never hidden its desire to abuse its dominant position in the energy market to achieve its foreign policy objectives. Panicked Europeans are struggling like flies caught in a spider’s web. How did we get here?

by Françoise Thom — DeskRussia — October 8, 2021 —

One must go back to the Soviet period to understand and to see the political implications of what Russia is setting up on the European continent. Soviet leaders from Lenin and Stalin onwards had undertaken to build a unified economy based on the dependence of the republics of the USSR on the central power.

“Comrade Stalin rightly said that whoever has the oil has the power”, Kirov declared at the XIV Party Congress (Quoted in: N.A. Efimov, “Sergej Mironovič Kirov”, Voprosy istorii, n°11, 1995, p. 58). With this in mind, the Kremlin developed a network of integrated gas and oil pipelines with the Russian Soviet Republic at its center.

The pipelines ran from oil and gas fields in Soviet republics such as Turkmenistan and Kazakhstan to Russia, from where gas and oil was redistributed or sold to Europe, the Soviet Union’s main energy export market. In return, the Soviet republics received subsidized gas. After the collapse of the USSR, Moscow did everything it could to preserve these “staples’’.

Françoise Thom – Photo © JFD

Since Putin came to power, the Kremlin has developed a persistent policy of extending this Russian-centric network to the whole of Europe.

Is Gazprom a reliable partner?

Russia has hardly ever hidden its willingness to weaponize gas and oil to achieve its foreign policy objectives, mainly in its immediate neighbourhood but also further afield.

In 1990, the Gorbachev USSR slapped Lithuania with an energy embargo when the republic’s parliament declared its independence.

After a gas cut-off in September 1993, Leonid Kuchma, the president of Ukraine, had to accept the cancellation of the gas debt in exchange for allowing Russia to keep most of the Black Sea fleet in Ukrainian Crimea.

In 1998 and 1999 alone, the Russian oil producer Lukoil cut crude oil deliveries to the Lithuanian refinery in Mažeikiai at least nine times.

Seemingly commercial motives are used to legitimize gas price and/or supply manipulations that in many cases are determined more by geopolitics than by corporate profitability concerns. One expert has identified some 40 politically motivated Russian power cuts between 1991 and 2004. What has been called the “pipeline building frenzy” began in 2001 and has continued since.

pipe lines russie — **Russia – CIS to Europe pipelines – Pipe lines Russia – Source : Gazprom export**

Russia has built a gas pipeline to Finland that provides 100% of Finnish consumption. We can add Nord Stream 1 and 2; the Beltransgaz pipeline, which controls the flow of almost a quarter of the gas exported from Russia to the European Union through the territory of Belarus via the Yamal-Europe pipeline; the Ukrainian pipelines, which ensure the transit of Russian gas to several European countries; South Stream and Blue Stream, which connect Russia to Turkey. Foreign experts were astonished by this profusion of pipes, whose export capacity far exceeded the volumes delivered by Gazprom, as they did not understand that Moscow’s aim was to create a situation where gas could be directed to this or that country by decision of the Kremlin, according to political considerations. The underutilization of these pipelines was planned from the beginning.

But matters got worse since 2005, after the signing of the agreement with Germany for the construction of Nord Stream 1. Russia began to openly brandish the energy weapon, closing the gas taps to insubordinate countries, leading the others to give up ever greater parts of their sovereignty in exchange for discounts in the gas bill. After the “Orange Revolution”, President Yushchenko’s Ukraine was forced to pay 220 to 230 dollars for 1,000 cubic meters of gas (compared to 50 dollars previously), while Belarus, at least until the re-election of President Lukashenko, kept its preferential rate (46.7 dollars/1,000 cubic meters) after being coerced in March 2004 to open its Beltransgaz consortium, the Belarusian gas network, to Gazprom: in February 2004 Russia had interrupted its gas deliveries to Belarus to force it to bring Gazprom into the Beltransgaz consortium. In April 2006 Gazprom put Lukashenko against the wall: either Gazprom gets full control of Beltransgaz or Belarus will have to buy its gas at market prices from 2007 (in 2011 Gazprom will become 100% owner of Beltransgaz renamed Gazprom Transgaz Belarus).

**Russian policy relies on corruption in littoral states – Photo BS © Massimo Vernicesole**

From 2006-7, the pet idea of Russian foreign policy is to take control of energy infrastructures abroad. Putin promised his foreign partners an access to Russian oil fields, but only if the distribution networks were handed over to Russia. When Russian oil deliveries to the Czech Republic dropped on July 9, 2008, Moscow cited technical reasons. But for the Czechs the Kremlin was clearly expressing its discontent after the Czech Republic’s recent decision to host the new American anti-missile radar system.

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At least three of the manipulations in gas supplies have caused deep systemic disruptions in Europe; in particular, in January 2009, Gazprom’s gas cut-off to punish Ukraine for its support for Georgia during the Russian-Georgian war, using Ukraine’s gas debt as a pretext, caused pressure to fall as far west as France and forced businesses and schools in southeastern Europe to shut down in a bitter cold. In less than a week in late March and early April 2014, after pro-Russian Yanukovych fled, Gazprom raised the price of gas exports to Ukraine from $268.5 per 1,000 m³ to $485.

From 2014 to 2015, Russia attempted to cut off Slovak, Hungarian and Polish supplies to prevent contracted Russian gas from being sold back to Ukraine via the reverse flow. The Europeans’ gas dependence on Russia was already sufficient to prevent them from introducing strict sanctions targeting the Russian energy sector after the annexation of Crimea and the intervention in eastern Ukraine.

Precedents also indicate that as soon as Russia feels in a position of strength, it takes advantage of it to crush even its most docile partner: thus, in 2006, when Armenia made the mistake of authorizing Russia’s purchase of the Armenia-Iran gas pipeline, closing Armenia to any alternative supply, Moscow abruptly increased the price of gas, plunging Armenia’s economy into a lasting crisis. This should give Europeans particular pause today. Political docility will not make their Russian supplier more accommodating if he is in a monopoly position.

The coup de grâce to the European Union?

Reading Russian analyses, one realizes that Moscow sees yet another opportunity in the current energy crisis. The Kremlin hopes to sow discord between European countries by putting them in competition with each other to obtain Gazprom’s favours. The important thing is to destroy the core of Central European solidarity.

Hungary and Gazprom have just signed a contract to supply 4.5 billion m³ of gas per year for the next 15 years. Of this, 3.5 billion will go through Serbia, 1 billion through Austria. For the first time in history, gas from Russia will be supplied to Hungary bypassing Ukraine. Moreover, Kiev risks being deprived of the possibility of buying gas in reverse, it will have to supply itself in Russia. For Moscow the operation is all profit: the asphyxiation of Ukraine is now complete, the relations between Hungary and the European Commission are deteriorating even more. The Kremlin is already considering repeating this operation with Slovakia, even if Gazprom is obliged to grant significant discounts to this country in order to do so. Moscow also hopes to play off the Latvians and Estonians against the Lithuanians, who wish to boycott electricity imports from Belarus altogether. Since the Soviet era, there has been an energy ring, the BRELL (Belarus – Russia – Estonia – Lithuania – Latvia), which unites the energy systems of these five states.

gaz network baltic sea region — **Gaz network in the Baltic sea region – Source : Wikipedia**

The Baltic states used to buy electricity from both Russia and Belarus. The Lithuanian decision to limit imports from Belarus has raised tensions with Latvia and Estonia, which the Kremlin intends to exploit. But more broadly speaking, the prospect of economic chaos in Europe due to the energy crisis is a rosy one for Moscow; one only has just to look at the complacent descriptions of the current British turmoil in the Russian media to see it, — and let us recall that Russia has just refused to sell more coal to Europe, while increasing by 90% its electricity deliveries to China.

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A ruined Europe would cease to be a magnet for the countries of the former Soviet space. The encouragement of national egoism, the fostering of a war of all against all to obtain Russian gas (also mentioned in the Russian press with relish) will make it possible for Russia to pick each European country one by one, and to accelerate the establishment of the Kremlin’s hegemony on the Eurasian continent. Thus the European architecture created from the Marshall Plan on, which was based on the cooperation of Europeans among themselves and on the solidarity of a free Europe, is unraveling. No wonder RIA novosti is gloating: “The United States has lost the battle for Europe, Russia has won”.

These prospects now seem within reach, especially taking into account the crisis provoked by the creation of the AUKUS. “A possible rapprochement between France and Russia after the perfidious coup of the AUKUS ‘triumvirate’ is causing a sensation in several European capitals, mainly in Poland, the Baltic states, Georgia and Ukraine. Paris is pushed to rapprochement with the Russians not only by the cooling of relations with Washington, but also by the increasingly hostile position of London… France will sooner or later be confronted with the necessity of a rapprochement with the continental bloc of states along the Paris-Berlin-Moscow-Beijing axis. The creation of the AUKUS only adds fuel to the fire, tearing France away not only from its ‘intimate British friend’ but also from the United States.” All hopes are now permitted: “The measures already taken by France to move closer to Russia to counterbalance the pressure of London and Berlin by Paris could have unexpected effects.”

If we compare the situation in which Europeans find themselves today, threatened by a serious gas shortage during the winter, to the precedents we mentioned above, we notice one thing: Russia has thrown off the mask, it no longer even tries to camouflage its decisions behind technical or commercial arguments. Expert Mikhail Krutikhin recently reported the words of a Gazprom adviser, who did not mince his words: “We have chosen to make an Italian strike, i.e. we are supplying Europe only with gas under long-term contracts signed long ago, but not with volumes of gas that would help Europe ahead of the winter season, and we are doing this on purpose.” The Russian press is even more explicit: “Ukraine must get ready to crawl [before us] to get Russian gas,” bluntly headlines RIA Novosti on July 28. “The bad guys [i.e. the Ukrainians, the Moldovans who have just given themselves a pro-European government, the Baltics, the Poles] will freeze first”, reads the headline of another publication, which makes no secret of the fact that Russia is counting on the cold weather of the coming winter to bring down all the independent governments of these countries. The brutal cynicism of Russian power is showing off with growing complacency these days: “Gazprom reminds that if Moldova considers Transnistria to be its own, it will have to pay $7 billion for the gas supplied over these decades. And then Moldova has to expect a massive price increase — a year ago Moldova bought gas at a price of $148.87 per 1,000 cubic meters… And today for $790, but not for long. […] These prizes were awarded to the former rulers of Moldova. With the current government, the negotiations will be conducted in a different tone, and their duration will depend on Sandu. […] As long as the parties have not reached an agreement, Moldovagaz will have to supply itself at spot prices. At this rate, Sandu runs the risk of ceasing to be President of Moldova before the end of the negotiations. And the US Embassy can help her only with nice words ”. It is worth quoting this article by Russtrat, the think tank close to the Kremlin, because it shamelessly proclaims that the Russian authorities intend to use gas dependence to bring down legitimately elected presidents and replace them with “friends of the Kremlin” who will be entitled to a preferential rate. We can bet that if the energy crisis continues, it will be discreetly suggested to voters in Western Europe to vote for pro-Russian figures likely to obtain a reduction in the gas bill. In Germany, the Kremlin will make it clear that it is better to put environmentalists on the sidelines instead of securing them important portfolios in the future coalition government. This hope shines through this evocative headline: “Hail to General Winter, who has defeated the fascist green energy!” Russia openly declares that it has a truncheon at its disposal, which it will use to bring the Europeans into submission. “Russia in 2021 is successfully implementing its concept of an ‘energy superpower’: China, plunged into darkness, is demanding more electricity supply, and Europe, due to record gas prices and bankrupt energy companies, is demanding more coal.”

bs russie adler gazprom 66110404 wasja 2 — **Gazprom played a major role in the liquidation of media freedom in Russia – Photo © BS**

The distinction between “near abroad” and “Western Europe” no longer exists for Russia’s leaders. All of Europe is now a “near abroad” in which the Kremlin feels it has a position of strength. The Europeans did not care about the use of Nord Stream 2 as an instrument of blackmail on Ukraine. Today they find themselves in the same boat as Kiev, much to their indignation. Having a short memory, they have forgotten the major role of Gazprom in the liquidation of media freedom in Russia. Do we imagine things will be different here? This does not prevent a number of French politicians of the right and the left from fantasizing these days about a “reverse alliance” with Russia. Are they blind to the immense power machine deployed by Russia against Europe for the past 20 years, or are they driven by the resurgent dream of collaboration with a “strong state” led by a Führer, like many intellectuals on the left and right in the 1930s? Are we witnessing in France a “rush to servitude”, to use Tacitus’ beautiful expression?

Françoise Thom

See: « Le « partenariat énergétique » avec la Russie : les leçons du passé, les dangers de l’avenir » in DeskRussie (2021-10-08).

See also: « Le partenariat énergétique entre l’Union européenne et la Russie » by Françoise Thom in DeskRussie (2000-12-14); « Nordstream-2, An economic project, did you say? » by Françoise Thom in DeskRussia) (2021-09-24).