Putin may be planning to turn the gas off for good
Europe is bracing for record temperatures this week, but while many struggle in the sweltering weather, in just a few months time, dozens of Western nations could find themselves sliding towards a catastrophic big freeze.
On Monday, Russia cut off the Nord Stream pipeline, which carries around 55 billion cubic meters of natural gas from Siberia to consumers in Germany and beyond. According to the Kremlin, the stoppage is just part of “routine maintenance,” but analysts fear what is billed as a 10-day outage could become a pretext for Moscow to choke off the flow for far longer.
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Berlin’s economy minister, Robert Habeck, is accusing Vladimir Putin of using gas “as a weapon” in retribution for EU sanctions. Germany is preparing for the worst, making £13 billion available to buy up reserves from other countries, as part of a race to fill up its storage facilities before winter, while the bidding war sends prices skyrocketing.
As Habeck admits, this is the “nightmare scenario.” For decades, Berlin was happy to depend on Russia for cheap fossil fuels and, it seems, successive governments never thought the day would come when Moscow put politics before turning a profit. As a result, they saw little reason to source alternatives.
In recent months, Europe’s largest economy has slashed its reliance on Russian gas from 55% to 35%. Now it’s not clear how much more it can do. Switching coal power plants back on may help to relieve some pressure on the electricity grid, but Germany’s heavy industries, manufacturing and chemical complexes have an almost unquenchable thirst for gas. If imports are disrupted, the whole continent, including the UK, will feel the shockwaves.
According to commodities analyst Nick Birman-Trickett, a prolonged cutoff “would trigger a massive supply crisis for German manufacturers and other European industries that depend on petroleum products, as well as households and businesses that rely on natural gas for electricity and heating needs.”
Rationing supplies, a drastic measure already pencilled in to Berlin’s contingency plans, would have to be brought in for the winter, as people turn on the heating. “We’re already seeing the start of that in the German economy,” Birman-Tricket told me, “and the fall of the euro to parity with the US dollar is indicative of the impact sky-high energy prices have.”
The economic fallout has been greeted with glee in Moscow, with Dmitry Medvedev claiming it is proof the EU has “shot itself in the head with a pistol made of sanctions.” According to him, Europeans are now “waiting for winter in their igloos, without our gas.”
Russia may depend on the proceeds of its fossil fuel exports to fund its brutal war on Ukraine, but it is able to disrupt them with few immediate consequences. The EU buys less half of the country’s total export volumes of gas, and the revenues from it pale in comparison to the proceeds from its oil industry.
EU leaders have reason to be worried, as Russia’s once-reliable energy network seems to be experiencing an unprecedented spike in politically convenient “maintenance issues” and other supposedly unforeseen problems. Last week, it ordered Kazakhstan to turn off the taps on its Caspian Sea oil pipeline over claims WWII-era naval mines suddenly pose a threat to the underwater link. The warning came days after the Central Asian nation pledged to increase exports to Europe.
A total blockade is, even for Putin, a nuclear option — you can only use it once, and when you do, you should expect consequences. If the bid to bring the West to heel fails, and the continent can get through the winter without Russian oil and gas, it is unlikely to ever jump back into bed with him, no matter how good the deal is. And as countries Saudi Arabia and Iran line up to take his place, there is no shortage of opportunities for Eurocrats to make the same mistakes again.