A web of hydrocarbon ties between Russia and Germany will heat the planet, but cool the conflict over Ukraine.
Vladimir Putin’s “soft invasion” of Ukraine is moving steadily ahead, perhaps on the route to fulfilling Putin’s newly discovered dream of incorporating “New Russia” (Novorossiya) into the motherland. (If you haven’t been following this new angle, Novorossiya is a huge swath of land stretching from southwestern Ukraine along the Black Sea, and including Odessa and Crimea, to parts of eastern Ukraine where Russian-backed gangs have seized control of some government buildings.) On April 17, Putin mentioned the concept, an eighteenth-century, ex-Ottoman Empire artifact, saying:
I would like to remind you that what was called Novorossiya back in the tsarist days—Kharkov, Lugansk, Donetsk, Kherson, Nikolayev and Odessa—were not part of Ukraine back then. The center of that territory was Novorossiysk, so the region is called Novorossiya. Russia lost these territories for various reasons, but the people remained.
Needless to say, there is no such place, but in Putin’s mind it may serve as justification to expand the massive covert operation Moscow is running in eastern Ukraine to places such as Odessa, where new violence has erupted.
It remains to be seen whether or not Ukraine can survive in its present form, but if it doesn’t—that is, if Ukraine breaks apart, Yugoslavia-style—one thing is fairly certain: the hydrocarbon bonds linking Russia to Western Europe, especially Germany, will remain unbroken. Sanctions or no sanctions, NATO or no NATO, the vastly powerful Gazprom empire will sustain itself, supplying gas to the lamps of Europe.
President Obama can huff and puff, and demand sanctions on Russia, but it’s fairly clear that Germany, the powerhouse of the European economy, won’t go along. So if a Cold War–style chill does descend on US-Russian relations—itself not too evident, since Russia is still cooperating nicely with the United States on Syria’s chemical weapons, Iran’s nuclear program and Afghanistan—the Europeans will be modest and reluctant collaborators at best, while preserving their ties to Gazprom.
Putin himself has noted that Gazprom has great influence over Europe’s views of the Ukraine crisis. According to the Voice of Russia, he said:
European countries take around 34%-35% of their gas balances from Russia. Can they stop purchasing Russian gas? In my view, it’s impossible.… Can we stop deliveries? In my opinion, this is completely unrealistic. Only by harming yourself, through blood is this possible, but I can’t even imagine this.
An op-ed in The New York Times today by the former editor of Germany’s Die Welt notes that a pair of former German chancellors, Gerhard Schroder and Helmut Schmidt, have been leading efforts in Germany to ensure that Berlin prefers a diplomatic approach to the Ukraine crisis. (Another former German chancellor, Helmut Kohl, has also emerged as a dove on Ukraine, saying in March that the West had displayed a “lack of sensitivity in the dealings with our Russian neighbor, especially President Putin.”) And even though Obama sought to portray the United States and Germany as in sync on Russia when Chancellor Angela Merkel visited Washington in early May, no one is really buying it. As The Wall Street Journal headlined on May 1, as Merkel arrived in Washington, “German Businesses Urge Halt on Sanctions Against Russia.” (The Journal has been engaged in a nonstop campaign of reporting on how Europe’s ties with Russia will block the emergence of a cold war.) It reported:
As the Ukraine crisis has worsened, German officials have faced a barrage of telephone calls from senior corporate executives, urging them not to take steps that would damage business interests in Russia, people familiar with the matter say.… “If there’s a single message we have as business leaders, then it’s this: sit down at the negotiating table and resolve these matters peacefully,” Eckhard Cordes, a former Daimler AG executive who now heads the Ostauschuss, German industry’s lobbying arm for Eastern Europe, told a recent conference in Berlin.
Schroder, who’s emerged as a leading defender of Putin, also happens to be on Putin’s payroll, pretty much. He receives 250,000 euros per year as “board chairman for a pipeline venture with Russian gas monopoly Gazprom.” As The Wall Street Journal reported at length on April 29, Schroder celebrated his birthday with Putin in St. Petersburg, at the very height of the Ukraine crisis, where he was photographed giving Putin a bear hug.
In all of this, there’s an important piece in The New York Times today that analyzes the problem of getting gas to Ukraine in reverse-flow delivery from Slovakia. As the Times reports, here’s the problem: the gas that Slovakia receives, via a pipeline through Ukraine, comes from Russia’s Gazprom. Once there, in theory, Slovakia is free to re-sell the gas to Ukraine and to deliver by reverse-flow in that same pipeline. Because Russia has sharply raised the price of gas that Gazprom sells to Ukraine itself, the delivery from Slovakia would make sense, it seems, giving Ukraine access to less costly has from a neighbor. However, it appears that Slovakia’s own energy firm, Eustream, which recently changed hands, has some sort of secret annex in its deal with Gazprom which prevents it from selling gas back to Ukraine, or so Slovakia says. Reports the Times:
“We have been struggling for a long time to convince them to find a solution,” said [Andriy] Kobolev, the Ukrainian gas chief. “We have now identified the problem, which was obvious from the beginning—restrictions placed by Gazprom.” Ukraine’s energy minister, Yuri Prodan, dismissed Gazprom’s legal and technical arguments as a red herring. “I think the problem is political. We don’t see any real objective obstacles to what we have been proposing,” he said.
And the Times adds:
Eustream executives declined repeated requests for interviews. Vahram Chuguryan, the company’s spokesman, declined to comment on the apparent change of heart or on whether it was related to an ownership shuffle in early 2013, when a group of wealthy Czech and Slovak businesspeople purchased a 49 percent stake in Eustream. At the time, Czech news media speculated that they were acting as a stalking horse for Gazprom.
Back in the bad old days of the real Cold War, the Reagan administration went ballistic when the Western Europe first considered a major new pipeline connecting it to Russia. Thirty years later, and long after the fall of communism and the Soviet Union, there’s a mighty web of carbon-spewing, climate change-inducing, pollution-mongering oil and gas ties between Europe and Germany. That’s not good for the environment, but it might be good for Ukraine. Perhaps it’s time to let the officials of Gazprom and gas companies in Slovakia, Germany and Ukraine take over from Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov. That is, before Putin founds Novorossiya.