Анджела Стент - Putin's World - Russia Against the West and with the Rest

In 1970, the USSR and the Federal Republic of Germany signed their first natural gas contract promoting their bilateral détente and the Ostpolitik of Chancellor Willy Brandt. 60Gas exports to other Western European countries quickly followed. The United States was originally concerned that if its allies became dependent on Soviet gas, Moscow might use gas supplies for political purposes, and it warned its allies not to go ahead with the contracts. Indeed, in 1982, the Reagan administration tried unsuccessfully to stop the construction of the Yamal gas pipeline by imposing sanctions on its allies who were exporting pipeline components to the USSR. British prime minister Margaret Thatcher, normally a great supporter of Ronald Reagan, was so incensed by this move that she personally traveled to the shipyards in Scotland from which the firm John Brown and Company was exporting pipeline components. Compliance with the sanctions would have cost many British jobs. 61

After the Soviet collapse, and with questions about the reliability of Middle Eastern energy supplies and the stability of that region, it appeared that Russia was a promising alternative. It has the world’s largest oil and gas reserves and was eager to increase sales to Europe to boost its earnings. But by 2006 there were growing concerns about the reliability of Russian gas exports. At that point 80 percent of the exports to Europe went through Ukraine, and Ukraine paid heavily subsidized prices for gas. But a year earlier Russia and Ukraine had been unable to agree on the price for gas—Ukraine sought a bigger discount—and negotiations dragged on for months. Eventually, Gazprom, the Russian gas behemoth, announced that it was cutting off the gas to Ukraine on a bitterly cold New Year’s Eve. Although it warned Ukraine not to siphon off gas that should have gone to Europe, Ukraine did precisely that. As a result, Austria, Germany, Slovakia, and Germany faced a shortfall of 33 percent of their gas supplies, and other countries were also adversely affected. The EU energy commissioner responded by calling for “a clear and more collective policy on the security of our energy supply.” The Austrians called explicitly for reducing dependence on Russia. To which the CEO of Gazprom responded, “Get over your fear of Russia or run out of gas.” 62Gazprom, although not technically a state-owned company, has very close links to the Kremlin. The question in 2006 was whether it was really Gazprom or the Kremlin that cut off the gas, since Putin had plenty of reasons to punish the Ukrainians after the Orange Revolution, which had ousted the Kremlin’s preferred presidential candidate Viktor Yanukovych. It was probably a mixture of commercial and political reasons, but it left the Europeans wary of possible future threats to their energy security from Russia.

As a result of these concerns, the EU has taken steps to improve its energy security and better coordinate the individual members’ energy relations with Russia. But external factors have also combined to lessen Europe’s energy dependence on Russia. The financial crisis of 2008 reduced gas demand in Europe. At the same time, the United States’ success in developing shale oil and gas freed up LNG exports for Europe. LNG from other exporters, such as Qatar, also became available. Europe focused on developing its own alternatives to Russian gas as well. Then came the annexation of Crimea, the outbreak of the war in the Donbas, and Western sanctions. As the conflicts and sanctions unfolded that year, there was a growing concern in Brussels about how the sanctions would affect security of supply. The EU published its European Energy Security Strategy in May 2014, designed to diversify suppliers and moderate energy demand. Russia responded by trying to diversify its own energy markets, particularly to China. 63

Despite EU concerns, the reality is that Europe will be a major consumer of Russian gas for the foreseeable future. The Dutch Groningen field, which has been the backbone of European gas supplies, is being progressively shut down. The interconnection of the Russian and European gas pipeline systems provides flexibility. Geographical proximity and the interest of European energy companies in doing business with Russia will guarantee continued Russian gas imports. But Europe is also wary of becoming too dependent on Russia and is determined to find alternative supplies. Europe is now equipped with a large number of LNG-receiving terminals. But they are underutilized. For now, at least, Russian gas will be far more economical than, say, imports of US LNG.

Beginning with the détente era, there was an assumption that economic and energy interdependence with Russia would promote better political relations. But the past quarter century since the Soviet collapse has shown that Russia is quite capable of decoupling its economic from its political relations. After all, it annexed Crimea and launched a war in the Donbas fully realizing that this might jeopardize its economic ties to Europe. Russia continues to pursue energy deals—particularly the Nord Stream II pipeline—at the same time as it confronts the EU politically. 64The fall in oil prices in 2013 and 2014 reduced Russia’s energy leverage in Europe, but rising oil prices in 2018 have restored some of that leverage. The energy superpower may have been weakened. But Russia remains a key energy player in Europe.

Putin’s first foreign visit after his inauguration in May 2018 was to Vienna to celebrate fifty years since Austria first agreed to import Soviet gas. 65In contrast to his tense relations with other European leaders, he received an impressive welcome, complete with full military honors. Austria’s thirty-two-year-old conservative chancellor Sebastian Kurz, in coalition with the Far Right Freedom Party, greeted a beaming Putin with warmth. Kurz had declined to expel any Russian diplomats after the Skripal poisonings and called for the EU to begin to lift the post-Ukraine sanctions. He said he was eager to resume Austria’s Cold War–era role as a bridge between East and West. And in a move that drew a great deal of attention, Putin attended the Austrian Foreign Minister’s wedding, waltzing with her around the estate in which the nuptials took place.

After his talks with Putin, Kurz spoke in deferential terms that no other European leader had used since 2014: “Today we had the opportunity to talk about international issues, that Russia as a superpower has a great significance in Syria and eastern Ukraine, and that Russia has a great responsibility. We hope Russia will contribute to people finally seeing what they are longing for: peace.” 66

In view of Russia’s deteriorating relations with the West and Europe’s increasing brittleness, the Kremlin is likely to continue to focus on its bilateral ties with those countries it considers key to its own interests, while seeking to have EU sanctions removed and pursuing new energy deals like Nord Stream II and TurkStream, both of which would reduce Ukraine’s role as an energy transit country. Criticism of Europe’s policies toward Russia will not diminish attempts to conclude new energy deals with it.

Vladimir Putin began his tenure in office as the most “European” of recent Russian leaders. But he has become increasingly wary of Europe and more enamored of the idea of Russia’s Eurasian destiny. He has answered the question of where Russia belongs by stressing Russia’s exceptionalism, its unique civilization and embodiment of conservative values. Russia’s place in Gorbachev’s vision of a common European home is today that of an ambivalent neighbor who keeps his distance from those who live next door. The Kremlin will continue to watch as the European Union deals with its internal political and economic battles and with Brexit, hoping that the European project ultimately fails and that there will be a return to a Europe where individual countries seek their own separate deals with Russia. As the idea of Europe is increasingly questioned in a Russia that rejects the EU concept of a community of values, Russia will move further away from its European roots. In no European country are Russia’s ties more complicated and important than with Germany.