Two weeks ago the EU and Ukrainian government signed an agreement with Russia to resume natural gas supplies which had been frozen since June. Part of the terms of that deal (totaling about $2.2 billion) includes a prepayment of $760 million for future supply of gas. Roughly 33% of the natural gas used by EU countries is purchased from Russia, and about half of that gas flows through the Ukraine.
Tensions between the West and Russia have not calmed since Vladimir Putin signed a declaration to annex Crimea in March, followed by the downing of the Malaysian Airline flight in July. Now, with the onset of winter, Europe must expect Russia to leverage energy supplies to their advantage. Political tension drives up oil and gas prices, which directly serves those countries that export energy. President Putin may also leverage energy supplies to reduce sanctions, or receive closed-door concessions that the EU and NATO will not interfere in Russian expansionist policy.
The annexation of Crimea is only the most recent example of Putin establishing footholds to achieve a Greater Russia, a nation with international borders more closely resembling the former USSR. South Ossetia and Abkhazia were taken from Georgia by invading Russian forces in 2008, and Transnistria (a narrow sliver of land between Moldova and Ukraine) was formally separated from Moldova with the help of the Soviet 14th Guards Army. U.S. General Breedlove has warned that Russia may be seeking to establish a corridor across Ukraine linking Transnistria to Russia.
Combine these recent land grabs with Vladimir Putin’s assertion, which he has repeated often, that Moscow has the right and the obligation to protect Russians anywhere in the world, and suddenly Eastern Europe appears to be a very dangerous place.
Commander James Nicolaou has shared two contributions to this blog with the goal of explaining Russia’s aggression and the role that energy plays in facilitating the expansionist and nationalist mindset in the Kremlin. As long as the EU countries are dependent on imported energy from Russia, there is little reason to believe Putin will back down.
So what should Europe do? In the early 1980s, then-President Ronald Reagan warned Europe against relying on energy imports from Russia. Those warnings fell on deaf ears. It takes years, possibly decades, to build an extensive international energy infrastructure, so change in Europe will be slow. LNG (liquefied natural gas) is being imported from the Middle East, Norway, and the U.S., and this helps, but is insufficient.
Renewable electrical power from wind, tidal, and solar generation are also positive additions, but again to expand the infrastructure is a huge challenge. Some European countries are considering increasing domestic natural gas production using horizontal drilling and hydraulic fracturing—techniques that have yielded an abundant supply of cheap gas in the U.S., but those governments will need to overcome popular opposition first.
It may be a cold winter in Europe. I wonder how many European governments now wish they had heeded Reagan’s paranoid warnings.