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POLITICS

A pipe that lost its pressure. How the Kremlin halted gas supply to the EU and swayed public opinion – but not the way it wanted

Andrey Smolyakov

The Russian invasion of Ukraine has resulted in unprecedented, comprehensive sanctions from Europe. In response, Russia resorted to a “weapon” that has many times proved its efficiency: switched off its gas pipelines. Europe plunged into an acute energy crisis, with populist and right-wing politicians (who typically enjoy Russia’s support) using it to advance their agenda. Paradoxically, it seems that their rise may do Russia more harm than good.

ALL CARDS
  • Gas blackmail history

  • How the Kremlin's “gas weapon” works

  • The political implications of blackmail

Читать на русском языке

On August 31, Gazprom suspended its gas supply to Europe via Nord Stream, shutting the pipeline down for maintenance and promising to switch it back on within three days. On September 2, before the anticipated date of resumption, Gazprom postponed it indefinitely. The company used the pretext of “oil leakage” and the need to perform maintenance works that required “special repair conditions”. Siemens Energy, which manufactured the turbines for Nord Stream, insisted that such leakage did not require shutting down the gas supply and could be eliminated on the spot. European politicians responded with expected fervor: thus, the European Commission spokesman Eric Mamer tweeted that the suspension of supplies “under fallacious pretenses” was yet another proof of Russia's unreliability as it preferred burning its gas instead of honoring its obligations.

Gas blackmail history

During the war in Ukraine, there have been more cases of Russia suspending or cutting its gas supplies to Europe. On June 1, Gazprom cut off Denmark and Germany from its supplies, once Ørsted and Shell Energy Europe refused to make payments in rubles. On June 14, Gazprom cut the ongoing supplies by an astounding 75%, claiming that sanctions had prevented Siemens from reinstalling the turbine after maintenance. Furthermore, on July 11, Gazprom trialed the shutdown of Nord Stream for as many as 10 days, once again referring to the “necessary maintenance works”. Back then, the German minister of economy Robert Habeck assumed that the suspension may become permanent, called on the European states to brace themselves, and accused Russia of weaponizing its natural gas. He may have been right on all accounts.

Russia using natural gas as a weapon and foreign policy tool has been discussed by politicians and academics for a long time, widely referred to as “the pipeline politics”. One of the earliest textbook cases of pipeline politics took place in 1997 during Boris Yeltsin's presidency. The Czech Republic was actively negotiating its accession to NATO, and Russia was traditionally quick to throw its weight around. Nikolai Ryabov, the Russian Ambassador to the Czech Republic, declared that Russia “cannot and will not accept the weakening of its influence in Central Europe”, and that Czech membership in NATO could harm its economic relations with Russia. He specified that he meant, among other things, “such fundamental agreements ... as deliveries of gas”. The escalation never happened. Russia did not go further than threats, and Ryabov subsequently changed his tune, saying that “Russia respects the Czech Republic's decision”.

One of the earliest textbook cases of pipeline politics took place in 1997 during Boris Yeltsin's presidency

However, this was about the last time Russia stopped at threats. The first practical application of pipeline politics dates back to the mid-2000s, when Russia employed it in an attempt to consolidate the CIS around itself. Already enthralled with the idea of rebuilding the Empire, Putin decided to use control over the region’s energy resources to ensure economic domination and subsequent reintegration of the post-Soviet space. Many factors explained the efficiency of this tool at the time: growing oil and gas prices had transformed hydrocarbons into Russia’s “gold reserve”, controlled by the president himself through the loyalist enterprises Gazprom and Rosneft.

Around the same time, Ukraine sustained the first blow, in the first few months that followed the Orange Revolution of 2004-2005. Putin was vehemently opposed to the revolution and may even have considered military intervention. This never happened, but the tension resulted in the so-called gas conflict as Gazprom announced its decision to up prices for Ukrainian gas deliveries to the European level, which was almost a threefold increase. Ukraine rejected the new terms, and Russia shut down the supply. However, Ukraine was also the primary country of transit for Russia’s gas exports to Europe, and fearing a symmetrical response, Russia had to make several concessions, ending the conflict with the signing of a new, “middle-ground” contract. Even in 2005, the conflict caused a few Eastern European nations to question Russia's reliability as a supplier and toy with the idea of finding new partners.

As early as in 2005, a few Eastern European nations questioned Russia's reliability as a supplier and toyed with the idea of finding new partners

Similar conflicts sparked between Russia and other countries, including Belarus, which is currently perceived as Russia's closest ally. To ensure control over gas transit and further his political influence, Putin decided to use the same “weapon” against his Western neighbor. Threatening to raise prices and switch off the pipeline amidst winter, Russia and Gazprom secured a stake in the Belarusian pipeline network.

Naturally, Western politicians and experts kept a close eye on these altercations. Thus, Robert Kagan, an American scholar and a leading advocate of liberal interventionism, wrote in The Return of History: “Russian leaders know this [Europe's energy dependency] gives them the means to compel European acquiescence to Russian behavior that Europeans would not have tolerated in the past, when Russia was weak.” Meanwhile, the American economist Irwin Stelzer warned: “To view Gazprom or any Russian energy company as anything other than instruments of Russian foreign policy is to be naive in the extreme” or “desperate for new energy supplies”.

Based on practical cases, energy security studies have arrived at an unequivocal consensus: Russia is fully capable of weaponizing its energy carrier resources and is already doing it. Security studies break down the use of this “weapon” into several stages, explains Dr. Karen Smith Stegen, Professor of Political Science. Preparation and execution normally involve three steps: Firstly, the government consolidates control over national resources, secondly, it established control over the transit, and thirdly, proceeds to threats, raising prices, and cutting supplies. Stage four is the desired outcome: securing concessions and compromises.

How the Kremlin's “gas weapon” works

Putin began the consolidation phase almost instantly. The case of Yukos can be considered as one of the first such steps, as the company’s liquidation and the transfer of its assets to state-run Rosneft were aligned with the goal of consolidation. Gas sector issues were resolved in an even more straightforward manner: once antitrust restrictions were abolished in 2007, Gazprom simply acquired what was left of private corporations.

Russia gained control over the transit incrementally, starting with threats to transit countries, such as Belarus, building bypass pipelines, including Nord Stream 1 and the currently suspended Nord Stream 2, and finally threatening consumers with price growth and supply interruptions – from 1997 to the present day. However, Russia is yet to see stage four, which would imply securing concessions from the importers. Speaking of Europe, Russia is mostly after the lifting of sanctions. They remain the focus of Putin’s statements on gas and the energy industry.

Although we should hardly expect any serious concessions in terms of sanctions in response to Russia’s pipeline politics in the foreseeable future, the most recent gas conflict is hard to overlook. Whether Europe wants it or not, its dependency on Russian gas is a fact, with the latter accounting for 40% of its gas consumption in the last few years. Even with European plans of restructuring the economy and weaning it off Russian gas (the so-called REPowerEU Plan), change will take time. The plan provides for a complete abandonment of Russian gas by 2030. However, the crisis caused by Russia’s policy is ongoing.

We should hardly expect any serious concessions in terms of sanctions in response to Russia’s pipeline politics in the foreseeable future

The halted gas flow has already driven European prices up by at least 30%, while the euro exchange rate dipped below the dollar for the first time in history. Moreover, with the winter drawing nearer and Europe imposing new restrictions on oil, gas prices could keep growing and creating additional pressure on politicians and ordinary citizens. Importantly, the hike in gas prices does not only affect countries traditionally dependent on Russian exports but the region at large. Only a handful of European states are relatively imperturbed by the fluctuations in Russian supplies: Scandinavian countries except for Denmark, the Netherlands, Belgium, Spain, Portugal, France, and the UK. However, they are also facing soaring energy prices.

The political implications of blackmail

Naturally, Europe’s political climate could not have remained intact. Thus, Verisk Maplecroft, a European consulting firm specializing in risk analysis, predicts that the winter of 2022 will most likely see a spike in public protests in Europe. The trend is already pronounced in the UK, where the cost of living crisis is already fueling public frustration. Mass protests are also observed in other countries. Germany has recently witnessed a left-wing opposition rally against capping gas prices and the anticipated increase in energy tariffs since October.

The winter of 2022 will most likely see a spike in public protests in Europe

Meanwhile, against the backdrop of protests and universal dissatisfaction – frequent attributes of social and economic crises – populist ideas and parties are picking up pace. As early as in summer, Italian Prime Minister Mario Draghi declared in his address at the G7 forum that Western nations must avoid repeating past mistakes and guard themselves against the onslaught of populism in the upcoming energy crisis. In all appearances, Draghi's concerns were valid, but the new wave of populism does not seem to have been averted. The recent election in Italy ended in the victory of Giorgia Meloni, leader of the Brothers of Italy, a far-right populist party that used to advocate a rapprochement with Russia. Apart from textbook right-wing agenda items, Meloni's party paid a lot of attention to growing gas and energy prices in its election campaign and promised a quick solution.

Sweden is going through a similar phase. The recent election was marked by the triumph of the Sweden Democrats, a populist right-wing party with roots in the ultra-right, neo-Nazi Nordic Realm Party. For the first time in history, the Democrats bested the liberal-conservative Moderate Party, becoming the second party by the number of seats after the Social Democrats. Unless the coalitions experience a schism or otherwise evolve, the Democrats have just landed their first opportunity to join the government. Despite the heavy focus on immigration in their campaign, they also placed a special emphasis on soaring energy prices, slamming the ruling coalition for excessive taxation and overreliance on wind turbines and promising to rein in energy tariffs.

Dr. Bulent Kenes, a scholar of international relations and researcher at the European Center for Populism Studies (ECPS), explained to The Insider that, although the Democrats leveraged social and economic challenges associated with energy carrier price growth, their success will have no bearing on Sweden's policy toward Putin's regime.

“Despite the Russian invasion of Ukraine and Sweden's application to join NATO motivated by the intensifying perception of this war as an immediate threat to its security, neither national security nor foreign policy has ever been among election campaign priorities. Swedish parties on the right side of the spectrum, including the Democrats, have always taken a pro-NATO stance and offered considerable support to Sweden's recent application for NATO membership. Therefore, I see no risk of considerable changes of its policy towards Russia, despite the allegations of certain prominent Democrats having special relations with Putin's regime.”

What are the implications for Russia? Lately, populist and right-wing parties in Europe were considered to be good for Russia: “useful fools”, sometimes flagrantly pro-Putinist. Russia successfully used them to its benefit: the former head of the Brothers of Italy Matteo Salvini negotiated financing with Russia because the party advocated good relations with the country at the time. Meanwhile, Heinz-Christian Strache, the leader of the far-right Austrian Freedom Party, was sighted in Ibiza in 2017, bargaining with the “niece” of Russian millionaire Igor Makarov. The niece was a stool pigeon, but the Freedom Party’s interest in Russian funding appeared to be sincere and long-term.

Populist and right-wing parties in Europe were considered to be good for Russia: “useful fools”, sometimes flagrantly pro-Putinist

On September 13, the US Department of State declassified intelligence reports about Russia spending over $300 million in the period since 2014 on interfering in foreign elections, lobbying benevolent politicians and parties, financing ultra-right think tanks, and supporting populist movements. This was yet another proof of Russia’s sincere interest in promoting populist, pro-Russian, and right-wing parties in Europe.

However, will the advancement of such parties do Russia any good today? They used to be an important lever for the Kremlin's influence, but the invasion of Ukraine changed this situation. Thus, the Brothers of Italy have done a one-eighty. Giorgia Meloni has publicly denounced the war and committed to supplying Ukraine with weapons, while her party’s earlier anti-institutional stance has swayed toward supporting NATO. Belgian right-wing movements, which used to be moderately pro-Russian, experienced a similar shift: Tom Van Grieken, the head of the right-wing, pro-separatist Flemish Interest (Vlaams Belang), has taken to criticizing Belgium's insufficient defense spending.

The strengthening of populist parties may somehow disrupt the traditional state of affairs and weaken European unity, but a full-fledged war in Europe pushes it to the background anyway. Notwithstanding the resources Russia has invested and the many levers of pressure it has used to undermine European politics, its efforts have been fruitless so far – and will most likely remain fruitless in the near future.

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