- Wojciech Jakóbik
Can we look for the first sources for the war in Ukraine even back in Soviet times? Actually, we can. It was during the final collapse of the "Moscow empire" that the Soviet ambassador to West Germany, Valentin Falin, together with then Deputy Foreign Minister Yuli Kvitsinsky, developed the doctrine that resulted, after a long 32 years, in the Russian invasion of Ukraine. A doctrine in which it was the Soviets' favourite tool - tanks that were to be replaced by a more subtle one - natural gas.
Ostpolitik - an ideal tool?
The Federal Republic of Germany under Chancellor Willy Brandt had a problem. On the one hand, it belonged to the capitalist camp led by the United States and reckoned with the threat of World War III against the Soviet bloc led by the Union of Soviet Socialist Republics. On the other hand, it believed all along in the unification of Germany with the German Democratic Republic, which remained in the enemy camp.
The West Germans therefore needed a strategy that would simultaneously bring them closer to the GDR, be economically viable, and at the same time not overly irritate their patrons on the other side of the Atlantic - the United States. Thus was born Ostpolitik, whose slogan became "wandel durch handel" (change through trade). It was a plan to civilize relations with the Soviets through economic cooperation. The core of this cooperation, however, in the hands of the Social Democrat Brandt, became gas.
On February 1, 1970, West Germany and the Soviets signed an intergovernmental agreement to build the Soyuz gas pipeline. The pipeline went into operation in 1973, just as the Middle East oil crisis erupted, providing a solid argument for increasing gas supplies from one billion to three billion cubic meters per year. Critics of Brandt's policies later revealed that his secretary, Gunter Guillame, was an agent of the East German service known as STASI.
Of course, the Soviets' gas cooperation with West Germany did not please the Americans, which led to U.S. sanctions in 1982 on the export of technology and equipment needed to build gas pipelines. This construction of sanctions was intended to hinder energy projects between the USSR and Western countries. However, despite the sanctions and the Soviet invasion of Afghanistan, Germany continued its course of energy rapprochement with the USSR and the Eastern bloc in general. In 1982, a contract was signed for the construction of a gas pipeline between Czechoslovakia and West Germany, as part of the Siberian gas pipeline that the Soviets would use to pump gas from their own interior to Western Europe.
Yet, just as the Germans had a plan for German-Soviet relations, so did the Soviets. And just as Soviet, and later Russian, gas began to flow to Western Europe, a strategy later called the Falin-Kvitsinky Doctrine was born. What was it based on? In a nutshell, it can be summed up in the formula: "Gas instead of tanks". Valentin Falin and Yuliy Kvitinsky, both Soviet diplomats, recognized that the decline of their empire's military influence in Central and Eastern Europe could be replaced by influence gained through the use of natural gas. The purpose of the doctrine was to block the expansion of so-called hostile alliances, which at the time meant NATO and the European Communities, which later became the European Union. The near abroad, i.e. the territory of the former Soviet bloc, which the Kremlin considered to be its sphere of influence, was to be kept under control despite political changes, and natural gas was to serve this purpose.
With the fall of the Soviet Union, it may have seemed that the whole elaborate plan would come to an end. Satellite states - such as Poland, Romania and Czechoslovakia - threw off the yoke of Moscow. They were joined by former Soviet republics that also sought independence - including Belarus and Ukraine - further "pushing" the new Russian Federation away from the borders of Western Europe. However, the collapse of the Soviet Union not only failed to slow down Falin-Kvitsinsky's doctrinal assumptions, it actually increased the importance of natural gas in the Russian Federation's foreign policy.
Moscow even admits in official documents that, from its point of view, hydrocarbons - including gas - are a political tool. The Energy Strategy of the Russian Federation until 2020 included provisions on the political importance of energy: "Russia has significant energy resources and a powerful fuel and energy sector, which is the basis for the development of the economy and an instrument of domestic and foreign policy. Its place in the global energy markets largely determines its geopolitical influence". An example of such influence is the construction of the Yamal pipeline, or rather the Yamal-Europe pipeline, from Russia to Germany via Poland, created under the Treaty on Friendly and Good-Neighborly Cooperation of May 21, 1992, and Gazprom's agreement with the Polish Ministry of Industry. Yamal was created by a political decision that was to tie Poland to Russia politically and economically for years.
Gas to penalize friends as well
And so, after the collapse of the Soviets, gas was used as an important tool to shape Russia's foreign policy, and in many ways, the targets were not just countries considered hostile. Gas also became a tool for disciplining regimes subordinate to Moscow. One example is the seizure of gas transmission pipelines in Belarus in 2011, in exchange for the cancellation of Belarus’ debt to Gazprom. In this way, Russia easily deprived Alexander Lukashenko's regime of its subjectivity in gas policy. Now all the strings in Belarusian gas policy are pulled by Vladimir Putin through Gazprom Transgaz Belarus, and Minsk has no say. But perhaps the most electrifying example of the application of the "gas instead of tanks" doctrine was the blow aimed at the then vassal - and now country with which Russia is at war - Ukraine.
In November 2013, on the eve of the signing of Kyiv's association agreement with the European Union, Moscow raised the price of natural gas supplies to Ukraine by 50% overnight, from $268 to $400 per 1,000 cubic meters. And when Ukrainian President Viktor Yanukovych, a Kremlin protege, withdrew from the EU agreement, Moscow's reward was imminent - a further reduction in gas prices from $400 to a preferential $268, plus a $15 billion loan as a bonus.
Despite these developments, which should concern Western policymakers, natural gas imports from the Russian Federation to the European Union have grown steadily since the collapse of the Soviet Union. According to the International Energy Agency, Europe began the 21st century with about 30 percent of its gas imports coming from the Russian Federation. That share dropped to 27 percent in 2012, but then rose steadily to 37 percent in 2014, when the illegal annexation of Crimea occurred, and 47 percent in 2021, on the eve of the energy crisis. Europe's mercantilist policies pushed Russia forward and emboldened it to take further imperial steps. Inevitably, it was also an important motivator for raising the stakes in February 2022.
In this way, the Russians have managed to make Europe dependent on their gas over the years , giving it hope of a cheap so-called transition fuel. This is because natural gas can be used to run flexible power plants that work well with the growing number of renewable energy sources. Photovoltaic panels and wind farms operate according to the weather conditions and therefore have an unstable and erratic supply. Gas-fired power plants can respond by rapidly ramping up and down their output, ensuring the stability of the national power system. The Russians have therefore promoted gas as a transitional fuel to secure the energy transition. They have been particularly effective in Germany. Natural gas was pushed there to such an extent that Berlin decided to completely eliminate another stable and emission-free source of electricity, i.e. nuclear power. Germany was to pay for this decision starting February 24, 2022, when it suddenly woke up to very high energy prices and dependence on the most militarily aggressive regime in Eurasia.
The Kremlin has also sprinkled its doctrine into its soft power activities, on which significant resources have been poured. Prominent examples include the sponsorship of the Schalke 04 football club or the Champions League competition, as well as the Dakar car rally. It is no coincidence that during these years the Nord Stream 1 gas pipeline from Russia to Germany was built thanks to the cooperation of Gazprom and a number of European companies that decided to join the Nord Stream AG consortium.
War Stream 2
The rapid increase in the share of Russian gas in Europe coincided with the launch of Nord Stream 1 in 2011. Its patrons were, first Chancellor Gerhard Schroeder, who today is more associated with Russian lobbying through his seats on the supervisory boards of Rosneft and Gazprom, and then Chancellor Angela Merkel, who did not block the Nord Stream 2 project, considering it a purely commercial venture until Russia's invasion of Ukraine. This created a new corridor for Russian gas supplies, bypassing all of Central and Eastern Europe. Together with the South Stream project, which later became Turkish Stream, it could have replaced Ukraine’s pipelines, even though it delivered a massive 180 billion cubic meters per year from Russia. However, both Nord Stream and Turkish Stream were supposed to provide similar capacity in total and form a kind of encirclement ring to close Ukraine and Central-Eastern Europe from the north and the south. It was supposed to suffocate the Ukrainian transit and lead to its extinction as long as there was a government in Kyiv that was not willing to bow to the Moscow regime. Meanwhile, Germany's energy transition, known as the Energiewende, was to be fueled by cheap gas from Russia. But it exposed Germany, Europe's largest economy, and with it the entire West, to great political risk, which was confirmed in the years of the energy crisis beginning in 2021.
For in the energy markets, the war did not begin in February 2022, but about eight months before the Russian invasion of Ukraine. In mid-2021, an unprecedented anomaly began to appear on the gas market. Russia's Gazprom began to reduce its gas supplies in various ways, causing gas prices to rise rapidly. The Russians shipped the minimum amount of gas stipulated in the contracts and closed market sales. They also did not refill the gas storage facilities over which they had control through their shareholdings in such facilities in Austria, Germany and the Netherlands. Normally, the gas sector empties its storage facilities during the heating season, when demand for the fuel increases. It replenishes them in the summer, when the price is lower. The Russians stopped doing this, leaving some storage facilities a dozen percent full for the heating season, when it should have been 70% or more full. Thus began the energy crisis. Gas on the TTF exchange in the Netherlands, valued at 20-30 euros before the end of 2021, became three times more expensive to about 120 euros. The increase in the price of gas spilled over into the energy market due to Western Europe's high dependence on gas-fired power generation. Energy prices also began to rise rapidly. Expensive gas and energy encouraged the use of coal, so coal consumption and prices also increased.
In February 2022, it became clear what the Russians' goal was. The Russian Federation invaded Ukraine, further aggravating the energy crisis by causing energy prices and raw materials to skyrocket. In this case, gas "entered the war before Russian tanks".
Gas on the TTF exchange in the Netherlands peaked at 350 euros per megawatt hour, more than ten times more expensive than before the crisis. The Russians further reduced the supply of gas in Europe, using tricks such as a dispute over payments in rubles imposed by President Vladimir Putin in violation of contracts. Customers who didn't comply, such as Bulgaria and Poland, had to deal with the interruption of gas supplies from Russia and carry out plans to become independent in an accelerated and crisis mode. The Russians also stopped deliveries via Nord Stream 1 due to a technical break, which they never ended. They sanctioned the Yamal pipeline in retaliation for the nationalization of Gazprom Germania in Germany and the seizure of assets of Europol Gaz in Poland.
This was a form of defence by these countries to ensure the security of supply by blocking Russian influence in these operators of key gas pipelines. The Russians responded with counter-sanctions, blocking supplies through Yamal. In contrast, the continued unexplained sabotage of the Nord Stream 1 and Nord Stream 2 pipelines had little impact on the energy crisis. Nord Stream 1 stopped deliveries because of a dispute over the ruble, while Nord Stream 2 never got off the ground because it was subject to U.S. sanctions following Russia's invasion of Ukraine and also failed to receive technical certification in Germany. It should be acknowledged, however, that the sabotage in September 2022 ruled out the possibility of using the Nord Streams for Russian supplies until repairs and technical inspections, which no one in the West is interested in at this stage. The sabotage of Nord Stream 1 and 2 may also be a convenient excuse for Gazprom not to pay compensation for unrealized gas deliveries by hiding behind force majeure.
The purpose of the whole Russian operation, of course, was to take advantage of Europe's dramatic dependence on Russian gas and to force Ukraine into a submissive position. There are many indications that if Kyiv had actually fallen quickly, Western capitals would have glossed over it - expressing condemnation but continuing their commitment to Russian hydrocarbons.
But the opposite has happened. The Ukrainians' tough stance forced Europe, and the Germans in particular, to painfully "tear off the Russian leach". The European Union has learned a painful lesson from the energy crisis. Countries that have long warned against Russia's use of gas instead of tanks, such as Poland and Lithuania, have only accelerated plans for independence from the Kremlin. Both rushed the launch of the Poland-Lithuania gas pipeline to tap additional LNG supplies from the floating gas port at Klaipeda. Poles also accelerated the expansion of the Swinoujscie gas port and signed a contract with Norway's Equinor. The Bulgarians, who found themselves in an equally difficult situation, had no ready-made plan, but preparations by the United States and the European Union, which began before Russia's invasion of Ukraine, made it possible to reserve a volume of gas to ensure security of supply. The Bulgarians received one billion cubic meters of gas from this pool, thus avoiding a gas crisis. The Union as a whole has announced the REPowerEU program to wean itself off gas and other raw materials from Russia by 2027 at the latest. The Union has also adopted regulations on the obligation to store gas before the beginning of each heating season. It also announced a program to save gas consumption, which was best supported by the horrendous price of the fuel, which caused the phenomenon of demand destruction. It was so expensive that everyone wanted to save money.
The call for joint gas purchases, which has been made since at least 2014, was finally heard as the AggregateEU auction platform was created, which allows for the reservation of supplies through demand aggregation. One can call this concept broadly "energy prometheism". It implies for the promotion of an EU policy of supply diversification and the harmonization of EU regulations in the former Warsaw Pact countries, as well as Western Europe, in order to reduce the influence of Gazprom and, consequently, the Kremlin. This is a kind of antithesis of the Falin-Kvitsinsky doctrine, the effectiveness of which was confirmed in practice during the energy crisis. As a result of the crisis, Russia's Gazprom did not induce Europe to abandon Ukraine, but expelled itself from its gas market. According to the International Energy Agency, by 2023 Russia's share in the Union's supplies have fallen to 13 percent. Barring any sudden twists, such as the revival of Nord Stream 1 and 2, the REPowerEU program is expected to succeed and Russian gas will be abandoned before the 2027 deadline.
In retrospect, one can say that the Falin-Kvitsinky doctrine brilliantly served the interests of the Kremlin regime. It was the doctrine that actually put the Russian Federation back on its feet and rebuilt the country left in chaos by Boris Yeltsin in the 1990s. It guaranteed a stable and high income for the Russian budget, which was large enough to finance the modernization of the Russian military, in addition to lining the pockets of dozens of oligarchs. It can be said that the Falin-Kvitsinky doctrine was even too successful, which effectively ended its life. The Russians, through the massive sale of gas and oil in Europe, reached such a level of security and financial cushion, and at the same time were confident of Europe’s addiction to it, that it pushed them to move to a higher level of offensive doctrine. "Gas instead of tanks" was thus replaced by the "gas and tanks" approach, shattering three decades of Falin and Kvitsinky doctrine and leading to the severing of the links that provided the basis for invasion. In theory, the Russians are trying to rebuild energy dependencies on China or India, among others. However, both of these countries are in a much better bargaining position and are mercilessly exploiting the Russians. Moreover, both countries are even further away from Russia's gas fields, and the infrastructure connecting Russia to the two Asian powers is only now being built. Thus, it can be said that on February 24, 2022, the Falin-Kvitsinky doctrine officially collapsed under the weight of its own success. The energy crisis, which was supposed to make Europe bow to the Kremlin's blackmail, has broken Russian dependence, which is unlikely to return in the foreseeable future. But, the struggle is not over - the EU continues to import Russian gas, with supplies in the form of liquefied gas - LNG even increasing by 37% from 2021, reports Breugel.
And so this is not the end of the story of the quest for energy sovereignty, and the lesson of using "gas instead of tanks" against Europe should serve as an example for responding to new challenges. Energy transition provided it is not fueled by gas from Russia, can be part of the solution to Europe's dependence on Russian gas. A successful evolution can take place through a duo of renewable energy and nuclear power, such as the one currently underway in France and Sweden.
However, the new reality creates new dependencies, this time from the renewable energy sector and electromobility. The energy transition in Europe today cannot take place without critical raw materials or renewable energy components from China. The 2023 State of the Energy Union report shows that the European Green Deal's agenda of accelerating the transition to renewables means greater dependence on raw materials and components from the Middle Kingdom - we talked about this extensively in our feature "How China Conquers Europe via EU's Green Deal?”. Some renewable energy components are already 90 percent sourced from China. It's an argument for developing Western extraction of critical raw materials such as copper, nickel, cobalt and lithium. It's also an argument for developing a Western renewable energy industry independent of the Middle Kingdom's supply chains. It's also an argument for betting big on nuclear power.
The lesson of the energy crisis is that there is no time to waste, because the energy rivalry once between the West and Russia, and now China, will remain crucial for each country's national security.
Sources:
- https://www.rp.pl/publicystyka/art36394111-wojciech-jakobik-prometeusz-skradnie-putinowi-boski-ogien
- https://en.wikipedia.org/wiki/Falin-Kvitsinsky_Doctrine
- https://www.iea.org/data-and-statistics/charts/share-of-european-union-gas-demand-met-by-russian-supply-2001-2023
- https://biznesalert.pl/jakobik-nowa-gra-gazpromu-analiza/
- https://tradingeconomics.com/commodity/eu-natural-gas
- https://www.bruegel.org/dataset/european-natural-gas-imports
