Nord Stream 2: commercial venture or political tool?

Mar 14 2018

U.S. and European experts weighed the political and business implications of Nord Stream 2 at an Atlantic Council event in Washington on Monday, March 12.

Europe’s demand for gas is rising while production is declining, complicated by the decommissioning of nuclear plants and environmentally damaging coal plants. This has resulted in a need for new energy sources and Russia should not be ruled out, said panelist Brenda Shaffer, a senior fellow at the Atlantic Council.

In Germany, there is strong support for Nord Stream 2 as a business proposition, said Claudia Müller, a member of German Bundestag. Nonetheless, Ms. Müller noted that there have been some 62 meetings concerning the pipeline between the German Chancellor and other high-level politicians.

As such, many experts see Nord Stream 2 not merely as a commercial project, but as a political tool that threatens energy security in Europe, particularly in Ukraine and Eastern Europe.

With the rapid growth of renewable energy and LNG exports, Europe today has a variety of energy options. There is more competition in the energy market, said Agnia Grigas, a senior fellow at the Atlantic Council, and Europe should take advantage of this, whereas Nord Stream 2 would “lock in the European markets.” “I don’t think this is a very commercial project,” Grigas said.

Sandra Oudkirk of the US Department of State agreed, saying “buying into a massive expensive undersea project buys into future dependence on gas.”

Bypassing Ukraine

A divisive factor of Nord Stream 2 is that it proposes to bypass Ukraine, which some say would give Russia a free hand.

“This is a very dangerous free hand to give to Moscow right now,” said Ms. Grigas. “I don’t think this is exactly the time to reward the Kremlin and Gazprom.”

But opposition to Nord Stream 2 is not about punishing Russia, said Douglas Hengel, a senior fellow at the German Marshall Fund, as much as it is about European energy security. “We have to look at what Russia is trying to do here. It is part of an overall plan, I think, to try to weaken the energy union, to weaken the European Union, to weaken the West,” said Hengel.

Yet Ms. Shaffer argued that bypassing Ukraine would in fact be beneficial to its independence, due to Russia’s deep involvement in Ukraine’s energy industry and the latter’s reliance on gas transfer rents.

In this regard, the U.S. policy objective of strengthening Ukraine by blocking Nord Stream 2 is counter-productive, Shaffer said.

Nor would it change Russia’s wider foreign policy, she added. “Does anyone take the view that if Nord Stream 2 isn’t built, Russia suddenly comes out of Crimea, changes policies in Donbass, changes policies in Syria?” asked Shaffer.

While U.S. opposition to Nord Stream 2 might not change Russian foreign policy, said Ms. Oudkirk, it is linked to “Ukraine’s path towards the West and a European future.”

Panelists agreed, however, that the U.S. should not widen its Russia sanctions to Nord Stream 2 unilaterally.

Ms. Müller warned that more U.S. pressure and restrictions on Germany could shift public opinion in Russia’s favor.


Exporting corruption

Another criticism of Nord Stream 2 is that it could spread a culture of corruption. It could have a negative impact on political and business life in Germany, said Ms. Grigas.

“We know when Russia exports its natural gas, it also exports political influence and it also exports corruption,” Grigas said.

Moreover, it is an initiative that strives to “to enrich the Putin circle,” said Anders Aslund, a senior fellow at the Atlantic Council. Just as Gazprom has enriched Putin’s close friends – such as Gennady Timchenko, the Rotenberg brothers, and Yury Kovalchuk, as discussed in a 2008 report by Boris Nemtsov and Vladimir Milov – so, too, will Nord Stream 2 further benefit some of these individuals, Aslund said.

Free Russia Foundation head of research, Ilya Zaslavskiy, also present at the event, said there is already evidence of exporting corruption, as in the case of the Rotenberg brothers, who were beneficiaries of Nord Stream 1, as well as a money-laundering scandal around the Nordic Yards shipbuilding plant, as discussed in Free Russia Foundation’s report.

In his comments and questions to the panels, Zaslavskiy emphasized that independent research shows that Nord Stream 2 is not only about by-passing Ukraine but a whole of Central and Eastern Europe, breaking existing EU directives on Slovakia’s Eurostream and leaving an open question on who will pay for additional transit infrastructure from Germany to Central Europe. More importantly, Nord Stream 2 takes one of the major incentives for Putin not to wage a war of annihilation against Ukraine and creates a dangerous over-dependence on Russian gas via this single vulnerable undersea route that under worst scenarios would carry 70% of all Gazprom deliveries to the EU. In 2014-2015 Putin arbitrarily reduced supplies into Nord Stream 1 in order to prevent reverse gas flows to Ukraine and this is an indication on how political expediency will also drive Nord Stream 2 future operation.

The first panel at the Atlantic Council event included:

Mr. Douglas Hengel, Senior Fellow, The German Marshall Fund of the United States; Professorial Lecturer, Energy, Resources and Environment Program, School of Advanced International Studies, Johns Hopkins University

Ms. Sandra Oudkirk, Deputy Assistant Secretary for Energy Diplomacy, Bureau of Energy Resources, US Department of State

Dr. Brenda Shaffer, Senior Fellow, Global Energy Center, Atlantic Council

Dr. Agnia Grigas, Senior Fellow, Eurasia Center, Atlantic Council

Moderated by: Ambassador Richard Morningstar, Founding Director and Chairman, Global Energy Center, Atlantic Council

The second panel included:

Ms. Aliona Osmolovska, Head of Corporate Communications, Naftogaz of Ukraine

Dr. Friedbert Pflüger, Director, European Centre for Energy and Resource Security (EUCERS), King’s College London; Senior Fellow, Global Energy Center, Atlantic Council
Ms. Claudia Müller, Member, Mecklenburg-Vorpommern, German Bundestag

Dr. Anders Åslund, Senior Fellow, Eurasia Center, Atlantic Council

Moderated by: Ambassador John Herbst, Director, Eurasia Center, Atlantic Council

By Valeria Jegisman

Europe’s demand for gas is rising while production is declining, complicated by the decommissioning of nuclear plants and environmentally damaging coal plants. This has resulted in a need for new energy sources and Russia should not be ruled out, said panelist Brenda Shaffer, a senior fellow at the Atlantic Council.

In Germany, there is strong support for Nord Stream 2 as a business proposition, said Claudia Müller, a member of German Bundestag. Nonetheless, Ms. Müller noted that there have been some 62 meetings concerning the pipeline between the German Chancellor and other high-level politicians.

As such, many experts see Nord Stream 2 not merely as a commercial project, but as a political tool that threatens energy security in Europe, particularly in Ukraine and Eastern Europe.

With the rapid growth of renewable energy and LNG exports, Europe today has a variety of energy options. There is more competition in the energy market, said Agnia Grigas, a senior fellow at the Atlantic Council, and Europe should take advantage of this, whereas Nord Stream 2 would “lock in the European markets.” “I don’t think this is a very commercial project,” Grigas said.

Sandra Oudkirk of the US Department of State agreed, saying “buying into a massive expensive undersea project buys into future dependence on gas.”

Bypassing Ukraine

A divisive factor of Nord Stream 2 is that it proposes to bypass Ukraine, which some say would give Russia a free hand.

“This is a very dangerous free hand to give to Moscow right now,” said Ms. Grigas. “I don’t think this is exactly the time to reward the Kremlin and Gazprom.”

But opposition to Nord Stream 2 is not about punishing Russia, said Douglas Hengel, a senior fellow at the German Marshall Fund, as much as it is about European energy security. “We have to look at what Russia is trying to do here. It is part of an overall plan, I think, to try to weaken the energy union, to weaken the European Union, to weaken the West,” said Hengel.

Yet Ms. Shaffer argued that bypassing Ukraine would in fact be beneficial to its independence, due to Russia’s deep involvement in Ukraine’s energy industry and the latter’s reliance on gas transfer rents.

In this regard, the U.S. policy objective of strengthening Ukraine by blocking Nord Stream 2 is counter-productive, Shaffer said.

Nor would it change Russia’s wider foreign policy, she added. “Does anyone take the view that if Nord Stream 2 isn’t built, Russia suddenly comes out of Crimea, changes policies in Donbass, changes policies in Syria?” asked Shaffer.

While U.S. opposition to Nord Stream 2 might not change Russian foreign policy, said Ms. Oudkirk, it is linked to “Ukraine’s path towards the West and a European future.”

Panelists agreed, however, that the U.S. should not widen its Russia sanctions to Nord Stream 2 unilaterally.

Ms. Müller warned that more U.S. pressure and restrictions on Germany could shift public opinion in Russia’s favor.


Exporting corruption

Another criticism of Nord Stream 2 is that it could spread a culture of corruption. It could have a negative impact on political and business life in Germany, said Ms. Grigas.

“We know when Russia exports its natural gas, it also exports political influence and it also exports corruption,” Grigas said.

Moreover, it is an initiative that strives to “to enrich the Putin circle,” said Anders Aslund, a senior fellow at the Atlantic Council. Just as Gazprom has enriched Putin’s close friends – such as Gennady Timchenko, the Rotenberg brothers, and Yury Kovalchuk, as discussed in a 2008 report by Boris Nemtsov and Vladimir Milov – so, too, will Nord Stream 2 further benefit some of these individuals, Aslund said.

Free Russia Foundation head of research, Ilya Zaslavskiy, also present at the event, said there is already evidence of exporting corruption, as in the case of the Rotenberg brothers, who were beneficiaries of Nord Stream 1, as well as a money-laundering scandal around the Nordic Yards shipbuilding plant, as discussed in Free Russia Foundation’s report.

In his comments and questions to the panels, Zaslavskiy emphasized that independent research shows that Nord Stream 2 is not only about by-passing Ukraine but a whole of Central and Eastern Europe, breaking existing EU directives on Slovakia’s Eurostream and leaving an open question on who will pay for additional transit infrastructure from Germany to Central Europe. More importantly, Nord Stream 2 takes one of the major incentives for Putin not to wage a war of annihilation against Ukraine and creates a dangerous over-dependence on Russian gas via this single vulnerable undersea route that under worst scenarios would carry 70% of all Gazprom deliveries to the EU. In 2014-2015 Putin arbitrarily reduced supplies into Nord Stream 1 in order to prevent reverse gas flows to Ukraine and this is an indication on how political expediency will also drive Nord Stream 2 future operation.

The first panel at the Atlantic Council event included:

Mr. Douglas Hengel, Senior Fellow, The German Marshall Fund of the United States; Professorial Lecturer, Energy, Resources and Environment Program, School of Advanced International Studies, Johns Hopkins University

Ms. Sandra Oudkirk, Deputy Assistant Secretary for Energy Diplomacy, Bureau of Energy Resources, US Department of State

Dr. Brenda Shaffer, Senior Fellow, Global Energy Center, Atlantic Council

Dr. Agnia Grigas, Senior Fellow, Eurasia Center, Atlantic Council

Moderated by: Ambassador Richard Morningstar, Founding Director and Chairman, Global Energy Center, Atlantic Council

The second panel included:

Ms. Aliona Osmolovska, Head of Corporate Communications, Naftogaz of Ukraine

Dr. Friedbert Pflüger, Director, European Centre for Energy and Resource Security (EUCERS), King’s College London; Senior Fellow, Global Energy Center, Atlantic Council
Ms. Claudia Müller, Member, Mecklenburg-Vorpommern, German Bundestag

Dr. Anders Åslund, Senior Fellow, Eurasia Center, Atlantic Council

Moderated by: Ambassador John Herbst, Director, Eurasia Center, Atlantic Council

By Valeria Jegisman

Call for Submissions – The Kremlin’s Influence Quarterly vol. 3

Oct 26 2020

The Free Russia Foundation invites submissions to The Kremlins Influence Quarterly, a journal that explores and analyzes manifestations of the malign influence of Putin’s Russia in Europe.

We understand malign influence in the European context as a specific type of influence that directly or indirectly subverts and undermines European values and democratic institutions. We follow the Treaty on European Union in understanding European values that are the following: human dignity, freedom, democracy, equality, the rule of law, and respect for human rights. Democratic institutions are guardians of European values, and among them we highlight representative political parties; free and fair elections; an impartial justice system; free, independent and pluralistic media; and civil society.

Your contribution to The Kremlins Influence Quarterly would focus on one European country from the EU, Eastern Partnership or Western Balkans, and on one particular area where you want to explore Russian malign influence: politics, diplomacy, military domain, business, media, civil society, academia, religion, crime, or law.

Each chapter in The Kremlins Influence Quarterly should be around 5 thousand words including footnotes. The Free Russia Foundation offers an honorarium for contributions accepted for publication in the journal.

If you are interested in submitting a chapter, please send us a brief description of your chapter and its title (250 words) to the following e-mail address: info@4freerussia.org. Please put The Kremlin’s Influence Quarterly as a subject line of your message.

Free Russia Foundation’s Press Release on Submission of Article 15 Communication to the International Criminal Court

Oct 06 2020

On 21 September 2020, the Free Russia Foundation submitted a Communication to the International Criminal Court Prosecutor’s Office (in The Hague, Netherlands) seeking accountability for Crimean and Russian authorities concerning international crimes perpetrated during Russia’s illegal occupation of Crimea. The Communication was prepared in cooperation with Global Rights Compliance and Center for Civil Liberties and is based on a focused inquiry conducted over the past year. In our inquiry, we documented crimes as part of a systematic, planned attack by the Russian state against civilians and groups in Crimea in order to discourage them from opposing the illegal occupation of Crimea and to force their departure from the peninsula. Crimes against civilians included unlawful arrests, beatings, torture, enforced disappearances, and other inhumane acts causing severe mental and/or physical pain. In particular, the crimes targeted the Crimean Tatars, a native ethnic group who had only recently returned to their homeland, having previously been forcefully and brutally displaced by the Soviet Union in 1944.

One of the principal coercive acts was the illegal detention and concomitant violence before, during, and after the imprisonment of political prisoners. Most of those detained were arrested by Russian and Crimean authorities on terrorism charges, but it was their legal, pro-Ukrainian advocacy that led to their imprisonment. In addition, trials of those arbitrarily detained were conducted in wholesale disregard of their fair trial rights. For example, some of those illegally imprisoned were denied a speedy trial, access to independent lawyers, and the opportunity to defend themselves against their arrest in a courtroom.

In order to force those illegally detained to confess to crimes they did not commit, Russian and Crimean authorities also perpetrated acts of torture and cruel or degrading treatment, the levying of additional charges against them, even more inhumane prison conditions, denial of communications with their families and threats made against them, enforced disappearances, and even, in at least one case, a mock execution.

Other inhumane acts include “punitive psychiatry” and the denial of adequate prison conditions, including the following: (i) feeding people inedible food or, at times, no food at all; (ii) facing severe overcrowding in prisons; (iii) denial of regular water supply; (iv) threats of assault against them by prison cellmates; and (v) adding pork to food – prohibited for observant Muslims. Further, medical attention was systematically inadequate or denied for many individuals.

Concerning acts of torture, it was perpetrated by different Russian authorities, including the FSB. Allegations include the use of electric shocks in an effort to get an accused to confess. One was beaten in the head, kidneys, arms and legs with an iron pipe. With another, fingers were broken. Still another endured spinal bruises and having a plastic bag placed over his head to the point of unconsciousness. Further, threats of sexual violence against a detained man were made. Murder as well. Hands were broken, teeth were knocked out in still another.

Trials were largely held behind closed doors for illegitimate reasons, and many of the witnesses were secret not only to the public but also to the Accused. Further, credible allegations exist that, at times, there were FSB or other agents in the room, silently instructing witnesses what to say and how the judges should rule. This adds credence to words, according to the Kyiv Post, heard by Arsen Dzhepparov from a senior FSB lieutenant who stated “I will prove by all possible – and impossible – means that [an Accused is] guilty – even if he isn’t guilty”.

Concerning the crime of persecution, nearly all of these deprivations of fundamental rights were carried out with discriminatory intent. Specifically, these groups were targeted due to their political view – namely, by peacefully opposing the illegal occupation of their country. Some were targeted on ethnic grounds or religious grounds on the basis of their Crimean Tatar background.

War crimes, another group of crimes punished at the ICC, were also perpetrated in addition to or in the alternative to the crimes against humanity. This includes the crime of torture, outrages against personal dignity, unlawful confinement, wilfully depriving protected persons of the rights of a fair and regular trial, and the transfer of the occupying power of parts of its population into the territory it occupies or the deportation of all or parts of the population of the occupied territory within or outside this territory.

All these crimes had the ultimate objective of the criminal enterprise – the removal of pro-Ukrainian elements out of Crimea and the annexation of Crimea into the Russian Federation without opposition, including the installation of pro-Russian elements, which include the emigration of more than 70,000 Russians, the illegal imposition of Russian law in the occupied territory, forcing Russian nationality on many Crimeans, and the appropriation of public property.

Ultimately, we hope that all the information gathered by the ICC in the context of its preliminary investigation will lead the ICC to investigate mid- to high-level Russian and Crimean officials on this basis. The international community expects responsible global leadership that follows the rule of law and expects it – no matter the situation – to be respected, especially from a state that is a permanent member of the UN Security Council. When this fails to happen, the international community must demand accountability. We hope that an investigation can be opened and responsible officials of the Russian Federation will be investigated. After an investigation that conforms to international best practices, responsible persons should be charged with the systematic perpetration of international crimes.

Novichok Use Implicates Putin’s Government in Navalny’s Poisoning

Sep 02 2020

Today, the German government has announced that Russian pro-democracy leader Alexey Navalny was poisoned by Novichok. Novichok is a deadly nerve agent developed by the Soviet government chemical weapons program and used on several occasions by the Russian government to kill its critics in the recent years.

To restate the obvious, Novichok is a poison that can only be accessed with the authority of the Kremlin. Therefore, today’s announcement by German officials  directly implicates the Kremlin and Putin in the high-profile assassination attempt on Navalny.

The choice of Novichok was not just a means  to silence Mr. Navalny, but a loud, brazen and menacing message sent by Putin to the world: dare to criticize me, and you may lose your life.

The announcement by the German government of its intent to formally notify the Organization for the Prohibition of Chemical Weapons (‘OPCW’) of the use of Novichok against Navalny is a meek bureaucratic half-measure that fails to acknowledge the extraordinary threat to human life posed by Putin’s regime everywhere. Taken together with Angela Merkel’s promise earlier this week to help Putin finish his Nord Stream 2 pipeline despite an international outcry amounts to condoning the poisoning and normalizing it into a new modus operandi where Putin’s murders go unpunished. Free Russia Foundation urges the leaders of the EU, its Member States and the U.S. Government to take an urgent and drastic action to punish the perpetrators of this heinous crime not only to serve justice, but to establish a powerful deterrent against new attacks by Putin’s regime globally.

Free Russia Foundation Statement on Kremlin’s Interference in Elections in Georgia

Aug 26 2020

We are deeply concerned with information recently distributed by the well-respected authoritative source Center “Dossier.” According to “Dossier,” the Kremlin is using Russian political expert Sergey Mikheev and consulting company “Politsecrets” to manipulate Georgian society, distribute disinformation and anti-democratic narratives, undermine Georgia’s Western aspirations, and interfere in free and fair elections in Georgia scheduled for October 2020.

More

Free Russia Foundation Calls for Investigation into Alexey Navalny’s Poisoning

Aug 20 2020

Free Russia Foundation is gravely concerned about the life and safety of Alexey Navalny. More