Who benefits – buyer or seller – from pipelines and dependency relationships?



Does a country that sells natural gas by pipeline to another country gain influence by selling it more gas or by selling less? Opponents of Nord Stream 2 – the second gas pipeline connecting Russia directly to Germany under the Baltic Sea – argued that it would give Russia more influence over Germany. Their argument is based on the theory that the selling country gains influence over the buying country as the volume of gas sales increases.

Opponents of Nord Stream, however, are not calling on Germany to buy less Russian gas, but rather to forgo buying it directly from Russia through Nord Stream 2 and continue to buy it from the Russian network. gas pipelines that cross Ukraine. They fear that if Germany imports more gas through the Baltic Sea pipeline, Russia could reduce its gas exports to Europe through Ukraine and Ukraine will lose the transit revenue it now earns. Russian gas. The theory continues that Moscow would then have more leverage to cut gas sales to Kiev if it does not need Ukraine’s pipelines to export gas to Europe.

On June 4, the Russian President Vladimir PoutineVladimir Vladimirovich PutinCyber ​​concerns dominate Biden-Putin Defense summit overnight: Biden, Putin agree to launch arms control talks at summit | Repeal of 2002 war permit will get Senate vote | GOP Representative Warns Biden “Blood On Hands” Without Afghan Interpreter Hillicon Valley Evacuation: Biden, Putin Agree to Start Work on Cyber ​​Security Issues | Senate Panel Unanimously Advances Biden’s Top Cyber ​​Candidates | Rick Scott threatens to delay national security candidates until Biden visits border MORE himself referred to the prospect of completing Nord Stream 2 giving Moscow greater influence over Kiev when he said that future Russian gas supplies to Ukraine depended on “the goodwill of our Ukrainian partners. “. This fear that Russia selling less gas through Ukraine will give Moscow greater influence over Kiev is therefore based on a theory that a country reducing its gas sales to and through a country gains increased influence over it.

Can both theories be true? It would seem that if one is valid, the other cannot be. Russia can gain influence over both, either by increasing gas sales to Germany and Ukraine, or by reducing gas sales to these two countries. If it increases gas sales to one and reduces them to the other, it should logically be able to increase its influence, as much as possible, on one of these states but not both simultaneously. Which theory is valid?

Given that Ukraine is weaker than Germany economically, militarily and in terms of internal political strength and influence with other countries, it would appear that Russia threatening to cut gas sales to the ‘Ukraine has a potentially much more damaging effect on Ukraine than increased Russian gas sales would have on Germany. But even though the theory that reducing (or threatening to reduce) gas sales to a country gives the seller influence over the buyer (as Putin himself seems to believe), there is something strange about it. those who worry about Ukraine’s vulnerability to Russia.

Russia forcibly removed Crimea from Ukraine and supported pro-Russian separatists in their war against Ukrainian government forces in Donbass, but opponents of Nord Stream 2 want Kiev to continue to earn revenue from gas exports Russian via the Ukrainian pipeline system. Certainly, however, Ukraine’s continued economic dependence on the country which occupies part of its territory and supports rebellion in another is hardly in Kiev’s interest. And since, unfortunately, corrupt oligarchs willing and able to work with Russia are powerful in Ukraine, this Ukrainian dependence on Russian gas transit revenues seems to offer Moscow endless opportunities to interfere in Ukrainian politics. and weaken its response to Russia’s hostile measures against it.

Ukrainians and their Western supporters who wish to reduce Russian influence in Ukraine can therefore better help Ukraine by working with Kiev to reduce its dependence on Russian gas transit revenues and Russian gas supply. for Ukraine. Instead of continuing to depend on Ukraine for transit revenues for Russian gas sold to Europe, those concerned about Ukraine should instead urge its transition from Russian gas to sources. renewable or other energy, as well as the importation of energy from other countries.

Western opponents of Nord Stream 2, however, fear not only the impact this pipeline will have on Ukraine, but also on Germany. They also apparently believe in the theory that when a large-scale gas pipeline is built between one country and another, the seller gains influence over the buyer. Interestingly, however, when analyzing the impact of increased Russian gas sales to China, Russian observers make the contrary argument. Writing in Novaya Gazeta on April 21, Russian academic-diplomat Georgy Kunadze argued that increased Russian gas sales to China are giving Beijing influence over Moscow: “[A]fter Russia becoming the appendage to China’s resources, it may sooner or later become its junior political partner who will be forced to obtain permission from the main partner to make key foreign policy decisions.

I have heard many Russians express similar fears in private conversations. Here, the argument rests on another theory: the buying country gains influence over the selling country as the volume of gas sales increases.

But can Russia’s sale of more gas to Germany give Moscow greater influence over Berlin while the sale of more gas to China gives Beijing greater influence over Moscow? It hardly makes sense.

What also doesn’t make sense is to talk about an increase in Russian gas sales over time. As Atlantic Council economist Anders Ã…slund points out, demand for Russian gas is expected to decline as the world shifts from hydrocarbons to renewable energy sources. The real danger for Moscow, then, is that as demand for Russian gas decreases, it could allow China to inexpensively increase its influence over an increasingly desperate Russia to sell gas to anyone who is willing and able to buy it.

Many in the West are used to seeing Russia under Putin as a strong and threatening state, but in reality it may turn out to be a weak and dependent state instead. If so, the prospect of Germany buying more gas through Nord Stream 2 could actually give the West a greater opportunity to influence Russia – or at least prevent it from falling more and more. under the influence of China – only if Germany gave up buying Russian gas through Nord Stream. 2, as opponents of this project advocate.

Indeed, the fact that Putin raises the possibility of Russia cutting off Ukraine’s gas supply, or doing so for a very long time, could become an empty threat. If the overall demand for Russian gas really declines, Moscow could become dependent on Ukraine to continue buying it.

Mark N. Katz is Professor of Government and Policy at the George Mason University Schar School of Policy and Government, and Senior Non-Resident Researcher at the Atlantic Council.


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