Discord in the U.S. and the EU’s energy policies towards Russia - Wojciech Jakóbik Blog

Gazprom’s policy – graphic from internet

27.06.2014 – Considering the continual transport of Russian tanks across the border with Ukraine and the plans of transporting new ones in the future, Washington created a package of sector sanctions against Russia. Besides the defense sector and the products of dual use, it is to also concern the advanced technologies for the energy sector.

– In a matter of hours Moscow has to prove that it is working in favor of the ceasefire between Kiev and the pro-Russian separatists in the Eastern Ukraine – said the United States’ Secretary of State, John Kerry.

Whereas in 2011, the American Schlumberger registered 7500 and Exxon Mobil 6500 patents for mining technology, Gazprom reported less than 250. This data shows the backwardness of the Russian mining sector, which will not be able to compete with the Western technology. Hence, the possible sanctions created by the USA in the face of the crisis in Ukraine will be very harmful. Russia is not independent in the search of new deposits of raw materials. However, it still has to look for them because its old ones are running out and only new ones will give a possible chance in Asia, which is not automatically guaranteed by the contract between Gazprom and the Chinese CNPC. The Western sanctions can, therefore, hit the foundations of the Russian plan of making itself independent from the European clients.

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However, this might be interrupted by Europe itself. The firms from the Old Continent still sustain that the relations with the Russian energy companies are pure business. The Austrians from the OMV, who without asking the European Commission signed a treaty about constructing the Austrian part of South Stream, are claiming that. Furthermore, the Austrians are not excluding the possibility of selling a part of their shares to Gazprom and allowing this company into the gas market in Baumgarten, which is key for the Central and Eastern European region. The domination of Gazprom there will let the “free gas market” of our part of Europe to be controlled by the Russian firm. Also accordingly to the British BP, which is signing another oil treaty with Rosnieft, relations with Russians are pure business.

The dissent between the harsh policy of the USA and the reconciliation of Europe can influence the effectiveness of sanctions that were put against Russia. If there is no solidarity here, the biggest losers will be the American companies, which will be forced to back out from the Russian sector and will be replaced by the cooperative European firms, which also have the needed “know how.” Such scenario is what the American companies are most likely expecting because they are already appealing to Washington about stopping the sanctions.

President Barack Obama said that he would not put the American companies in the danger of becoming less attractive in relation to the European firms. He expects that the introduction of sanctions against Russia will be coordinated with Europe. Meanwhile, the European diplomats with whom The Moscow Times spoke are saying that on the ongoing Summit of the European Council there will be no discussion about new sanctions against Russia.

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In the face of the crisis in Ukraine, the European choice will be key to the future relations with Russia. If the European business convinces the politicians to leniency with Moscow, the Western system of pressuring Russia will fall and the sanctions will not be effective. This scenario will increase the tensions. The West will then be forced to take even more drastic actions or resign from its aspirations in Ukraine. The light at the end of the tunnel is the European Commission’s actions, which are supported by Poland, Spain and the Baltic States, concerning communitisizing the elements of the energy policy towards Russia. The outline of the concept was made in the European Strategy of Energy Security, created by the European Commission. During this Summit of the Council, the member countries can relate to its entries.

Translation: Marlena Kister