Opinion: Russia's Arctic Gas is Funding the War in Ukraine
PUBLISHED MAR 13, 2022 11:25 PM BY MIA BENNETT
In response to Russia’s invasion of Ukraine, the seven other member states of the Arctic Council have hit a “pause” button on cooperation. Gas from the Russian Arctic, however, is continuing to flow into Europe uninterrupted. The political theater of halting Arctic Council diplomacy will have little effect on Russia. Yet it will negatively impact circumpolar efforts on environmental, Indigenous, scientific, health, and all manner of “soft” issues. In fact, work in these areas may now be harmed twice over.
Post-invasion, Russia is raking in more money from gas exports than before
Two days after Russia’s invasion of Ukraine, Germany froze high-profile pipeline project Nord Stream-2 (whose tangled connections to the Arctic I’ve explored about before). Yet existing gas flows have continued largely unabated from Russian pipelines to Europe, including via the Yamal-Europe pipeline, which runs through Belarus, Poland, and Germany. In the winter months leading up to the invasion, Gazprom may have been manipulating flows into Europe by withholding gas despite having a record year of both production and profits. Now, post-invasion, fighting is threatening some pipelines and causing explosions, but gas seems to be flowing relatively normally, and neither Russia nor the EU have sought to turn off the taps.
Meanwhile, the price of natural gas imports in Europe continues to rise, sending more money into Russian coffers. European think tank Bruegel estimates that Russia, the world’s largest natural gas exporter, is now raking in 500 million euros each day compared to 200 million a day in February. Polish Prime Minister Mateusz Morawiecki cautioned, “We are buying, as [the] European Union, lots of Russian gas, lots of Russian oil. And President Putin is taking the money from us, from the Europeans. And he is turning this into aggression, invasion.”
Russia’s friends in Asia: China and Mongolia
Europe may be able to significantly lessen its dependence on Russian imports, estimates the think tank, Bruegel. Weighing that eventuality, Russia is looking to export of the commodity sucked out of the tundra eastward. In early February, Vladimir Putin, while meeting with Xi Jinping in China on the eve of the Olympics, announced that their two countries had inked a 30-year deal involving the annual export of 10 billion cubic meters (bcm) per year from eastern Siberia. This agreement builds on the 30-year gas deal signed between the two countries in 2014.
Then, four days after the invasion of Ukraine began—which China allegedly requested to be delayed until the Olympics had concluded—Gazprom’s chairman, Alexey Miller, and the Deputy Prime Minister of Mongolia signed a deal regarding the construction of the Soyuz/Vostok gas pipeline, which will run from Russia through the former Soviet satellite to China. This pipeline will be able to deliver 50 billion bcm annually. For comparison, Nord Stream 2 was planned to carry 110 billion bcm, or a little over twice as much.
Ukrainian companies, too, have their hands dirty in Arctic gas
In the middle of the pipelines stitched into Europe’s veins lies the theater of war: Ukraine. One of the main conduits transporting gas from Arctic fields to Europe is the West Siberian Pipeline
For nearly four decades now, the West Siberian Pipeline has transported gas from Urengoy, the world’s second largest natural gas field, to Uzhgorod in western Ukraine. The pipeline is partly owned and operated by Ukrainian company Ukrtransgaz. Until recently, it allegedly oversaw 50 percent of all transit of Russian gas to Europe. Ukrtransgaz is owned by Ukrainian state-owned company Naftogaz, which a French managing director at the European Bank for Reconstruction and Development called “one of the darkest corners of the country’s web of corrupt interest.” In other words, certainUkrainian companies and officials are profiting immensely from the same resources that are funding the destruction of their own country.
https://maritime-executive.com/editorials/russia-s-arctic-gas-is-funding-the-war-in-ukraine