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International Security Implications of the US-Russia Contention Over the Nord Stream 2

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The Nord Stream 2 gas pipeline has been a subject of heated debates all along the construction cycle. The pros and cons are abundantly exposed in the public domain and have been at the centre of technical and political discussions for several years. The project comes amid a wide range of comments and statements on the high political level, involving leaders of Germany, Russia, the United States and the European Union. The polemic around the Nord Stream 2 takes place in a particular context marked by the growing tensions between Russia and the West and recurrent security incidents in the East of Ukraine and the Crimea area. Those factors add further to a tendency to overemphasize political and security dimensions of the Nord Stream 2. Consequently, the project has been associated with far-reaching strategic implications. Referring to the opinions expressed by politicians and experts on both sides of the Atlantic, Western media have represented the pipeline construction as infringing on the NATO interests in the region and frustrating the unity of the European nations. The pipeline has also been presented as laying the ground for Russian military offensive into its European neighbourhood. This has created quite an exceptional environment for a project which was designed merely as an extension of the already existing pipeline route (Nord Stream 1). Indeed, the project could hardly be viewed in ‘normal circumstances’ as a very new element in, or a substantial change, to the European energy and security landscape.

Making an extra argument in favour or against the project will not be the objective of this article. What it will, however, try to explore is to what extent the contention around the Nord Stream 2 may interfere with existing security balances in Europe and how far it can impact strategic security relations in a triangle formed by Russia, the EU and the USA.

On the one hand, the developments around the Nord Stream 2 are quite similar to those which accompanied earlier projects of hydrocarbon transit from Russia to Europe, starting from the Nord Stream 1 and back to the Cold War times. This can be noticed by looking at the international reaction to the project. Indeed, many arguments currently advanced against the Nord Stream 2 have already emerged at the order of the day on several occasions. The narrative is commonly constructed along the lines of Europe’s energy vulnerability and its dependence on external energy supplies, from the Cold War era “red oil” threat to later Soviet and now Russian gas dependency. Ten years ago, the opponents of the first Nord Stream pipeline put on the table almost the same points of criticism. They considered the project as an attempt to bypass traditional transit countries, exert political and military influence on them, gain strategic dominance over Europe.

The diplomatic and political manoeuvres around the Nord Stream 2 are also not entirely new. Back in 1962 (a time when oil and not gas was the main product in energy trade relations between the USSR and Europe) NATO countries introduced a US-proposed embargo on oil pipes and connected technology for the Soviet Union. This strategy was enacted as an attempt to delay the construction of the pipeline named Druzhba (the Russian for ʻfriendshipʼ) intended to bring the country’s oil to Europe. Further embargo on pipeline technologies was implemented in the early 1980s by Ronald Reaganʼs government. The measure was supposed to prevent the construction of the Soviet export gas pipeline Urengoy-Pomary-Uzhhorod, in which several European companies and banks had a stake. For these past events, various features of the European and transatlantic policy were quite similar to the present times. The division of Europe into supporters and detractors of the pipelines from Russia, US and NATO attempts to block Russian energy deals with the European companies, and the national governments’ subjection in international affairs to the energy majors’ strategies, do not sound like anything new. Thus the actual contention over the Nord Stream 2 is inscribed into the longer-term turbulent history of the Russian hydrocarbon transit projects in Europe.

On the other hand, today’s context is different, and there are mainly two new elements which account for the change. First is that the world has entered a new historical period, security-wise far less structured, predictable and manageable than the Cold War times and even the post-Cold War era. Dramatically reduced level of trust between the USA and Russia, coupled with the harsh rhetoric of their leaders and continuous mutual accusations raise the conflictual potential in the bilateral relations. US-China competition over trade and economic leadership adds to further international complexity. The growing number of actual and potential military conflicts, including hybrid ones, brings about a higher risk of escalation with unpredictable consequences. Serious concerns hover over disarmament and non-proliferation regime, with its significant components fallen apart or remaining in limbo. While the demise of the time-proved mechanisms aimed at conflict prevention may be traced back to 2002, when Washington’s withdrew from the Anti-Ballistic Missile treaty (ABN Treaty), the recent developments, mainly the US decision to pull out from the 1987 Intermediate-Range Nuclear Forces (INF) Treaty and Russia’s suspension shortly after of its own compliance with the pact, have put the finishing touch to the arms control and disarmament agenda of the whole post-Cold War era.

In such a context, armed conflicts are likely to break out or grow in intensity along one of many existing fault lines. The cross-border energy projects also turn into dividing factors within the current confrontational conjuncture. Consequently, North Stream 2 has got the potential to impact the European geopolitical scene profoundly.

The second new element pertains to the US domestic hydrocarbons production and the way it strains the competition for the European gas market sharply. Only about a decade ago, the United States was supposed to become the largest importer of liquefied gas. However, the shale revolution brought about a sharp increase in domestic gas production. Paradoxically, the infrastructure previously designed to import LNG to the USA was used later on to export gas. That contributed to a significant reduction in the cost of American LNG projects compared to similar endeavours in other countries (Qatar, Australia and Russia). By 2020, the production capacity of the six existing US LNG plants reached about 78 million tons, and the United States is now quite able to outrun Qatar in production volumes (this is apart from being currently the world’s leading exporter of refined oil products).

Meanwhile, domestic gas production in the European countries accounts today for less than 50 per cent of domestic consumption. The demand for imported gas is growing. Over the past six years, gas supplies from external sources have increased by an average of almost 4 per cent annually. In 2018, European countries imported 326 Bcm of gas, 4.8 per cent more than in 2017. In the first half of 2019, the total net gas imports in the EU amounted to 210 Bcm, which was 19 per cent more than in the first half of 2018, amid increasing consumption (+4.5 per cent) and decreasing domestic production (-7.6 per cent), pointing to further increase of gas import dependency in the EU. Russia remained the top pipeline gas supplier of the EU, covering the major part (almost 45 per cent) of total extra-EU gas imports.

The approximate market share volume in Europe for the US gas producers may potentially elevate up to 60 – 80 billion cubic meters, but only if supplies from Russia are effectively restricted. Because of the hurdles which the US LNG may face on the European market due to the growing competition with the cheaper pipeline gas from Russia, its export may find itself limited only to the markets of the Asia-Pacific Region and Latin America with only a marginal proportion going to Europe. That explains the rationale behind some non-market restrictive measures, or sanctions, which serve as an instrument to sideline the competitor and politically facilitate American LNG flows toward Europe. President Trump and high officials of his administration expressed on various occasions their opinions on the North Stream 2 project, which oscillated from lukewarm to overtly adverse. The US ambassadors in Berlin and the Hague overtly pressured local governments and private companies to reconsider their support for or involvement with the pipeline. In June 2019, the US House of Representatives’ Foreign Affairs Committee approved the Protecting European Energy Security Act, a bill which would impose sanctions on anyone who sells, leases, or provides pipe-laying vessels used in the construction of a Russian-origin energy pipeline that makes landfall in Germany or Turkey. A month later, the US Senate Foreign Relations Committee advanced the bill that would impose sanctions on the Nord Stream 2 as an effort to “protect European energy security and Ukraine’s stability”.

Finally, on December 20, 2019, the US President signed a sanctions package on the Nord Stream 2 and another offshore pipeline designed by Moscow, Turkish Stream (also called TurkStream). As an immediate effect, the Swiss-Dutch company AllSeas in charge of laying the pipes in both projects announced its withdrawal from the Nord Stream 2, causing presumably a one-year delay to its completion.

The surplus shale oil and gas production in the US has impacted the governmental approach toward diplomacy. Ever since the 1970s, Washington had criticized the use of energy as a political instrument; however, once the self-sufficiency was achieved, energy sanctions have become the tool of choice for American foreign policy. This new role of the US — that of the ‘energy hegemon’ — will likely have several effects on the transatlantic relations and international security.

First of all, overusing sanctions in the energy domain would affect the supply security of the EU countries and necessitate some innovative safeguards against further deterioration. A situation when almost all non-US sponsored energy supply projects in Europe may face fierce American opposition on political grounds is constraining for actual and potential investors into hydrocarbon transit business. As long as the US economic interests find their way in Europe under the guise of political considerations, the stakes of the European companies involved in the Nord Stream 2 (or other energy projects with Russia or Iran) will remain at risk. That kind of setting may result in a broader awareness within the EU about the diverging political priorities of Washington. It is also possible to expect the elaboration of some specific measures aiming to mitigate the effects of the US sanctions on what Europeans see as their legitimate business and security interests. It should be noted, that the big question is whether the EU will have enough of united political will and capacity to take a course of action that goes against the attitude of its central political and commercial partner, the US. However, the ongoing discussions in Europe about the de-dollarisation of the energy products trading, as well as some attempts made by France, Germany and the United Kingdom to set up a special purpose financial vehicle (INSTEX) to facilitate trade with Iran, are some early examples of a search for greater autonomy.

Secondly, fierce US lobbying against the Nord Stream 2 stokes tension to an already complex and sometimes explosive European security landscape. The US and some Eastern European countries used to strengthen the arguments against the project by stressing its linkage with the ongoing conflict in Ukraine. It purportedly followed therefrom that the raison d’être of the North Stream 2 was to slowly strangle Russian neighbour’s economic and political capabilities, particularly by causing Ukraine to lose around 2 billion euro annually in gas transit fees when the new pipeline becomes operational.

However, by the end of 2019 Moscow and Kyiv reached a new five-year agreement on Russian gas transit through Ukrainian territory. Ukraine got the supply volumes it wanted: 65 billion cubic meters in the first year, and 40 billion the next year. In the absence of the Nord Stream 2, delayed by the US sanctions, Gazprom might have to supply some 75 Bcm through Ukraine in 2020.

Nevertheless, the critics of the project are already extending the strategic implications of the pipeline to the Baltic area. The standard argument here is that the pipe would give Russians a pretext to patrol the entire Baltic sea, as well as provide infrastructure for information transmission and for tracking the movement of naval vessels. From that reasoning follows that adequate countermeasures need to be designed and implemented by NATO in order to prevent a “blow” against security in Eastern Europe. As a consequence, the whole area is getting locked in a highly conflictual conjuncture aggravated by already existing regional security challenges, such as the demise of the Intermediate-Range Nuclear Forces Treaty and the ongoing military buildup on the NATO’s Eastern flank.

Thirdly, the recurrent difficulties in involving Europeans into sustainable and smooth economic partnership in the gas sector, as well as the American sanctions which could eventually apply to any additional lines to the Russia-sponsored pipelines in Europe, incentivize Russia to reconsider the geometry of its energy export routes. The deliveries of Siberian gas to China in the amount exceeding 1 trillion cubic meters in 30 years began via a new trunkline — ‘the Power of Siberia’, with the annual capacity of 38 Bcm . The reorientation of substantial gas volumes toward the East is a sign that the former Cold War allies seem to be on the way of upgrading their relationships while trying to fend off escalating pressure from the West. Washington clearly designates Russia and China as US strategic rivals, and this precipitates both countries to cooperate on a broader range of issues, like energy and related infrastructure, international security and domestic governance. With all the limitations which an alliance between Moscow and Beijing may face, this it is likely to become a consequential factor of the strategic landscape in Eurasia and beyond.

Fourthly, the growing US pressure both on Russia and on Europe to stanch the Nord Stream 2 construction causes discords within the EU and is likely to rebound badly for the European political unity already put to the test by many economic and security issues. The controversial reputation of Donald Trump’s international policymaking could pose a problem to those EU member states that follow American president in warning against the project. On the contrary, those who support the Nord Stream 2 or stay neutrally favourable toward it, are likely to be in a more advantageous position by representing their attitude as resistance to external pressure and uncompromising defence of national and European interests. The German’s pattern of political conduct fits well into this framework. Berlin supports the pipeline construction (regarded primarily as a business project) and defends it as a contribution to national economic development and secure energy supply for Europe. In a way, Germany has revealed the limits of pressure that President Trump is prone to exercise on the US allies and adversaries alike. What is happening proves that applying coercion, or just evoking it publicly, can bring about the opposite effect. That holds true for the Nord Stream 2 which has got broad public support within German society, and is now championed both by major ruling political parties in the current CDU/SPD coalition as well as three parties of the opposition: the far right AfD, the liberal FDP, and the extreme left, die Linke. The same holds in other cases as well. For instance, another President Trump’s favourite subject of anger concerning Germany is its defence spending. However, pushing Berlin into increasing it up to 2 per cent of its GDP makes it extremely difficult to do so. On the one hand, existing polling data proves that Germans oppose defence spending above the 1.5 per cent of GDP, already promised by Angela Merkel by 2024. On the other hand, hardly any politician in Germany wants to be seen succumbing to Trump’s overt forcing. Although there is no direct link between the German involvement with the Nord Stream 2 construction and its vision of the defense spending obligations, the underlying factor on both accounts is compelling American demand for clear-cut solutions to the issues, which turn out to be much more nuanced from the German standpoint.

The overemphasized political and military dimensions of the Nord Stream 2 increase pressure on the strategic relationship between Russia and the West. The anti-Russian rhetoric fans the continuous contention around the project in the American and European mass media. The moment when it happens is all the more inopportune, taking into account the deteriorated security environment in Europe which moves closer to the untrammeled arms race with the demise of the INF Treaty and the uncertainty about the future of the New START — one of the last pillars of the arms control regime. International energy supply projects have become — nolens volens — closely intertwined with political and security developments, be it escalation between the US and Iran at the Strait of Hormuz — a vital shipping route linking Middle East oil producers to global markets — or the simmering conflict in the East of Ukraine, in the vicinity of a transit corridor for Russian gas exported to Europe. Being a constant element of the strategic picture, energy is more and more regarded as a dividing factor which serves the interests of one party to the detriment of the other. The application of this conflictual paradigm to the Nord Stream 2 gives rise to yet another fault line amidst already strained European political and security environment.

Paradoxically, with the Nord Stream 2 contention, the very concept of energy resources supply and sharing acquires a confrontational connotation in Europe. Whereas, the same idea was underlying regional integration back in the mid-20th century. The European Coal and Steel Community (ECSC) established by the Paris agreement in 1951 was intended to neutralize competition between European nations over natural resources and prevent further war with Germany. The visionary idea behind the transnational community implied that amidst dramatic lack of trust toward a particular country the best way to avoid conflict and to restore confidence was to involve the distrusted state into a large-scale energy project. Unfortunately, subsequent historical developments on the European continent resulted in a situation where the idea of promoting extended energy partnership as a pledge of lasting peace seems no longer attractive. The Nord Stream 2 case demonstrates quite clearly the lack of collective will on behalf of the European Union to engage on a long-term basis with its Eastern neighbour in the gas sector. Keeping in mind the limitations of any historical analogies, back than the ECSC represented a political option in dealing with a nation which was suspected of seeking regional domination. In the modern days, rather than making out of the Nord Stream 2 another squandered opportunity for building a more sustainable relationship with Russia, the West, and primarily the EU as a close neighbour, could have looked at the pipeline beyond its primary function of one-way gas supply. The connecting gas artery might also serve to send something back from Europe toward Russia, albeit in a virtual sense, like a better understanding of European priorities and concerns, trust, and a vision of a shared future. The project could have also been viewed as a safeguard against presupposed Russian military invasion into the countries of the EU Eastern periphery. The possible damage to the pipeline which would provide significant and much-needed export revenues for the national economy is a convincing disincentive for Moscow to mount some dubious warfare operation in its neighbourhood. However, this perspective was not able to make its way through alarmist rhetoric which depicted the Nord Stream 2 as a part of Russia’s sinister designs. The same reasoning certainly reinforces the aggressive image of Russia and gives additional sense to NATO’s raison d’être. At the same time, it leaves Moscow disenchanted with the European partners, locks the country out in a reactive posture and makes look for strategic alliances elsewhere.

Finally, the US-Russia contention over the Nord Stream 2 is likely to take a toll on the transatlantic solidarity. The trends going in that direction are gaining strength driven by the specifics of the current American foreign policy. It would be premature to argue that the European elites are ready to break ranks with Washington. However, on several issues, such as the nuclear deal with Iran (JCPOA), Middle East policy, the role of NATO or relations with China they show increased independence and greater consideration of their national interests. The way things will develop for the Nord Stream 2 will be partly determined by the unfoldment of the debates over the greater European strategic autonomy from the US. However, even if the outcome of these debates tilts the balance in favour of the Nord Stream 2, it is difficult to predict for how long that could last. The European position regarding the project has indeed proved to be a complicated, precarious symbiosis between internal strategic concerns, imposed security frameworks and economic motivations.

From our partner RIAC

[1] As Roberto Cantoni notes, those were not the only USA-proposed blockades aimed at hindering Soviet industrial projects: “…In 1946, a penicillin plant program launched by the United Nations Relief and Rehabilitation Administration to build up the capacity of the pharmaceutical industry in Eastern and Southern Europe was significantly delayed by an American embargo on extractor technologies. The State Department refused to grant export licenses for the necessary equipment to pass the Iron Curtain. Other products including radioisotopes and computer equipment were also embargoed to stifle Soviet technological progress”.

[2] Among the primary factors driving gas demand growth in Europe are the decline in domestic production, reduction in nuclear generation, and the decreased role of coal in the energy sector. Within the EU, the gradual capping on the extraction from the major Dutch Groningen gas field resulted in the production downturn of a magnitude similar to the increase of Russian gas imports (both roughly 40 Bcm).

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Gazprom and Europe

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Football in the 21st Century is not only a sport but a global brand in itself. Football allows others to feed and profit off of it as well. Global corporations have used this opportunity to leverage into newer markets and, or, improve their reputation in existing markets.

Gazprom; it is on players’ jerseys in Germany, in Russia, in Serbia, at games in England, and on side-lines in Italy. Gazprom is a Russian natural gas company. Teams make money offering jersey space to sponsors selling things like credit cards, cars, insurance companies and cell phones. But Gazprom is not like most sponsors: private companies with products football fans can buy. Instead, it is a company owned by the Russian government that makes money selling natural gas to foreign countries. It is everywhere in European football. So, if football fans cannot buy what they’re selling, why is Gazprom spending millions to sponsor games?

The answer is part of a larger story that’s changing the sport. Gazprom’s partnership with these clubs is mutually beneficial because they provide a crucial revenue stream to the football club while in turn gaining publicity and a foothold in key target markets in which they are hoping for an increasing profit margins they represent a successful confident company that yields significant power and influence.

It is a corporation that reflects the values and ambitions of the Russian state the company via a series of commercial partnerships and high-profile sponsorship deals is now firmly in the collective conscience of European football fans few are quite sure whatthe company stands for or what this foothold means and in any case they are largely apathetic which oddly mirrors the aims of Vladimir Putin and increased influence in Western culture becoming a major player in events without the stigma of political connections or ulterior motives. Foreign countries use companies they own to burnish their reputations abroad, and to understand why Russia is involved, one needs to closely observe a  map. Russia has the world’s largest natural gas reserves and most of the mare located in Arctic gas fields controlled by Gazprom. The company is led by Alexey Miller, a close ally of Vladimir Putin. Since 2005, the Russian government has owned a majority stake in Gazprom. Meaning company profits are under Putin’s control and gas sales, along with oil,account for around 40% of Russia’s annual budget.

Various maps showcase how European countries are on Russian gas and Eastern European countries are more dependent than countries further west. At the end of the 20th century, Germany represented the biggest opportunity for Gazprom. German Chancellor Gerhard Schroeder had announced plans to phase out coal and nuclear power, which meant Germany would need more natural gas to maintain their energy supply. Gazprom wanted to get it to them, but there was a problem. To get to Germany, Russia’s gas needed pass to through pipelines crossing countries charging Gazprom transport fees. And most of them went through Ukraine, a country that has a complicated relationship with Russia. Today, Ukraine still charges Russia $2-3 billion dollars every year to pump gas through to Europe. So, starting back in 2005, Russia began working on a strategy to bypass Ukraineand ship their gas directly to Western Europe.

This led to the birth of the Nord Stream pipeline,  a route through The Baltic Sea straight to Northern Germany.In late 2005, Gazprom was in the final stages of financing the project and Germany’s chancellor was preparing for an election. During his time in office, Gerhard Schroeder had become friendly with Putin and critics in Germany were increasingly concerned about the Russian leader’s growing influence.

Just a few weeks before the election, Schroeder met with Putinto sign an agreement officially approving the pipeline. Two months later, Schroeder lost his re-election but by March he had found a new job: overseeing Gazprom’s pipeline to Germany. It also came out that, before leaving office, Schroeder had approved a secret Gazprom loan that provided over a billion euros to finance the project. Soon, the story of Gazprom’s big project in Germany was becoming a story of scandal, corruption, and the creeping influence of Russia. But then the story changed.

In 2006, Gazprom signed a deal to sponsor the German team FC Schalke 04.At the time, Schalke’s finances were worrying team officials and Gazprom’s sponsorship provided money the team desperately needed. At a press conference announcing the deal, a Gazprom chairman said Schalke’s connections with the German energy sector were why they decided to become their sponsor. Schalke plays in Gelsenkirchen – a town in Germany’s Ruhr Valley, where much of the country’s energy industry is based. It’s also close to the town of Rehden, a hub for pipelines to the rest of Europe and home to Western Europe’s largest natural gas storage facilities.

Interestingly, Schalke was not Gazprom’s first deal. The year before, they had bought a controlling stake in a team on the other end of the Nord Stream route: the Russian team Zenit St. Petersburg. Gazprom’s investment made Zenit a major force in soccer. Two years after taking control, Zenit won their first-ever league championship. They’ve been able to sign expensive foreign stars, like Belgian midfielder Axel Witseland the Brazilian forward Hulk, and Gazrpom uses Zenit for marketing stunts: like having players scrimmage on the side of their offshore gas platform.

In 2006, as Gazprom logos were revealed around Schalke’s stadium, German headlines were hailing the Russian gas giant for pumping millions into the German team. To celebrate the deal, Schalke’s new jersey was unveiled in a ceremony before Schalke and Zenit played a friendly match in Russia. And, over the next few years, the Gazprom logo would become a team symbol displayed at Schalke games and printed on official merchandise. Schalke also won a championship in 2011 and by then, Nord Stream had been completed, and that year, Gerhard Schroeder, Angela Merkel and other European officials gathered to celebrate as it began pumping gas to Germany. There was also another struggling team whose jerseys started featuring Gazprom’s logo: The Serbian team Red Star Belgrade. Red Star was about 25 million dollars in debt when Gazprom signed to become their jersey sponsor.

And, again, there was also another pipeline: The South Stream would have bypassed Ukraine by going directly through Serbia to Southern Europe. That project closed in 2014, but Gazprom has continued increasing their access to Europe by building Nord Stream 2, a second pipeline doubling the amount of gas flowing from Russia to Germany. Gazprom has also expanded their empire to include energy partnerships with Chelsea Football Club[1], Champions League and the sport’s most famous tournament: the FIFA World Cup.

These sponsorships have made Gazprom’s logo familiar not just to fans in Europe, but across the world.“We light up the football. Gazprom. Official partner.”It’s in commercials before games, and on jerseys and sidelines once it starts. FC Schalke fans have also started to see Nord Stream 2 ads at home games. And, while climate activists like Greenpeace have staged protests to point out Gazprom’s threat to Arctic resources, Gazprom had no trouble renewing their sponsorships.

Now, Russia controls nearly half the gas consumed by Europe and other countries are learning from their example. Etihad, Emirates, and Qatar Airways all are owned by sovereign states in the Middle Eastwith interests that go beyond selling airline tickets. As the example of Gazprom shows, having a prominent footballing sponsorship offers a way around bad publicity by winning approval on the field. If you’re a fan, that can feel like a big opportunity: their money helps teams win major tournaments, but it’s starting to change the sport itself. Gazprom like so many others, is an opportunist who strives to be linked to sporting successes. Gazprom’s reasons for investing so heavily in sport could be compared to any global organization. It is a fascinating  means of advertising. It has become common to see a Serbian team sponsored by Russia’s gas company facing off against a French team sponsored by Dubai’s state-owned airline, it’s starting to seem like the field is hosting two competitions at once: A match between two teams, and a larger play for foreign influence that continues long after the final whistle.


[1] Owned byRoman Abramovich since 2012 seven years prior to this deal Abramovich sold his shares in Sibneft his oil-producing company to Gazprom for an estimated 10.4 Billion Euros.

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New oil pipeline in northern Thailand may worsen flooding

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A pipeline stretching from central to north-east Thailand promises to “promote Thailand as an energy hub in the region” and “increase energy security”, according to the Ministry of Energy. Construction began in mid-2019, despite local communities objecting that the largely Chinese-financed project could worsen flooding and contaminate water.

The 342km pipeline will run two metres underground and link Thailand’s north-eastern province of Khon Kaen to an existing pipeline in the central province of Saraburi. Energy Minister Sonthirat Sonthijirawong attended a ceremony on 5 February to lay the foundation of a 140 million litre oil tank in Khon Kaen’s Ban Phai district at the end of the pipeline.

Altogether, it will pass through 70 towns in five provinces including Lopburi, Nakhon Ratchasima and Chaiyaphum.

The route was agreed in August 2016, when the energy ministry signed a deal with the project investor, Thai Pipeline Network (TPN).

The ministry has promoted the pipeline as a more efficient means of transporting oil to the north-east, claiming it will lower oil prices and cut down on accidents involving road tankers.

TPN director Panu Seetisarn said the pipeline will avoid 88,000 road tanker journeys each year.

The THB9.2 billion (US$300 million) project is largely funded by a loan from the Chinese government, which stipulates that at least 35% of the equipment used must come from China. The precise details of the deal have not been made public. However, Panu revealed that TPN and undisclosed investors are investing about THB1 billion each.

The project has been progressing quickly since January last year when the government approved the environmental impact assessment (EIA) report.

In February, TPN – a subsidiary of Power Solution Technologies (PSTC) – signed a contract with China Petroleum Pipeline Engineering (CPP) to construct the pipeline within a 30-month period. And then works commenced in mid-2019.

Panu also revealed that the company wants to link the pipeline to the capital of Laos, Vientiane, and to southern China.

As well as the controversial north-eastern route, the first phase of another route, from central to north, is also under construction. The northern route is being developed with the ultimate aim of linking Tak province into Myanmar’s Kayin state at Myawaddy.

Flood risk

“This will lead to a big flood, bigger than the recent one,” said Ow, a local resident of Khon Kaen’s Ban Phai district, recalling flash flooding following tropical storm Podul that put homes under more than 1.5 metres of water for over a month last summer.

She fears the construction of an oil tank a few kilometres away will worsen flooding in future.

“Looking at its huge area and how high they have raised the land to level it for construction, [it] will definitely block all waterways,” she said, adding: “What will happen to us if there’s a big storm again?”

“After discussion with my neighbours, we [all] share the same concern and decided to file a complaint to the local authority but nothing happened,” said Ow.

The villagers’ concerns are justified, according to Jaroonpit Moonsarn, an environmental official at the Department of Environmental Quality Promotion (DEQP).

“There are two creeks, the Huay Bandoo and the Huay Khamrian, in the area that are natural waterways helping to drain waters in the district. The construction has blocked these significant waterways,” said Jaroonpit.

She believes another tropical storm in the area would create a bigger flood than the one last August.

Dust, pollution and public safety

Flooding is tomorrow’s fear, but dust is today’s suffering, said Ow, referring to air pollution caused by the construction of the oil tank that is affecting surrounding communities.

“We filed a complaint to the construction company, but they told us to complain and seek compensation from their subcontractors. It’s still unresolved. We don’t know who to talk to,” she said.

Jaroonpit also noted local concerns about the project once it’s finished, such as explosions, chemical contamination of local groundwater and heavy traffic. Road tankers will still be needed to distribute oil from the pipeline to nearby provinces, and additional tankers are expected to operate if the road to Laos is improved.

“Public safety should be seriously studied and discussed, including how to manage such risks and how to compensate,” she said.

“This involves the daily life of local people and they should have been informed clearly before the project’s construction approval, otherwise it leaves all the burden on them,” said Thawisan Lonanurak, former secretary general of the North-eastern Chamber of Commerce.

Apart from the risks to public safety, there are several basic questions about the project that need answering, according to Thawisan.

“Will oil prices in this area really be cheaper? How cheap? And most important, how transparent is the deal between the state and private investor?” Thawisan said.

“These questions should be answered at least during the EIA and hearing process, but it hasn’t happened,” he added.​

Witoon Kamonnarumet, senior advisor to the Khon Kaen Federation of Industry, said hearings for the EIA were conducted twice among a small group of people selected by the project owner and the company contracted to produce the EIA. They were not open to the general public.

“Even local businessmen in my network said they know very little about this project and are not clear on what it will really look like. We heard it would come two years ago and then there was a long silence and then construction started recently,” Witoon said.

“At the EIA hearing, most of the time was used for a company presentation focusing on what they had done in other areas,” said Paitoon Mahachuenjai, Nakhon Ratchasima’s Dan Khun Thod District head. They said that if there was “any problem during construction they would be ready to help,” he added.

Local activist Suwit Kularbwong, chairman of the Human Rights and Environment Association, said communities affected by the project have limited access to information about it.

“Where will the pipeline pass through exactly? How much area will be expropriated or compensated, and at what rate? They still don’t know. This goes against the [country’s] 2017 Constitution on public information and public participation for such a project,” Suwit said.

“This project has been initiated by the state and developed with a top-down approach, without sufficient consideration of its impacts, and with poor public participation. What will happen if more and more people along the pipeline know about the real impacts after construction and learn that they were not informed beforehand? Local opposition is foreseen. And government should be aware of this as it could affect the ongoing construction of the project,” he said.

Chinese investment and public discussion

Suwit said there is inadequate public awareness and discussion about projects and Chinese investment.

“The influence of Chinese investment in this region as well as the Mekong has been growing rapidly in recent years, without taking human rights violations and environmental impacts into account. And [it’s been] actively supported and facilitated by our Thai government.

“The key question is how ready are we for such massive investment from China? How ready is our government to protect its people’s interests from developments like this one where they are losing their land?” asked Suwit.

To address public concerns, Suwit suggested open public forums so that discussion could take place on the controversial oil pipeline and broader development plans for the north-eastern region.

“That which is missing from the past EIA process should be fixed there. At the forum, all basic project information should be available beforehand. It should be open to participation and discussion from all groups,” Suwit said.

Thawisan shared the same suggestion. “Local universities and academics should also play an important role to help digest technical and academic information for local people to understand the project properly,” he said.

From our partner chinadialogue.net

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How Turk Stream is forcing Europe on its heels

Sisir Devkota

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Russia laid down two gas pipelines from its territory, one from the topmost northern hemisphere, famously named as “Nord Stream” and the most advanced, latest with all rights “Turk Stream”; that passes through Turkey, a nation that now finds pride in being able to connect Russia with the rest of Europe. In recent years, European nations have heavily relied on American natural gas supplies and new set of renewables; while sanctions over Russia in the past decade primarily stalled business on both sides, Europe has now changed its language on Russia’s desire to sell oil to the continent. On paper, Europe is openly welcoming a new source of energy supplies in the name of profitable competition, yet changesare only the tip of deep lying geopolitical stakes. Turkstream was launched in the beginning of January; and so, did a brand-new Russian policy take effect that could change foreign relations in the years to come. But, why is Europe changing course suddenly?

Geographically, between the two pipelines on the north and south is Ukraine sitting ignored by Russia’s willingness, more so; it is also a statement of available options at Putin’s hand. It is well noted that Russian aspirations are serious; investing on two different routes has been costly, but the oil rich nation has caught all eyes. While Turkey is flaunting a newfound friendship on the East, other nations in the region, including Ukraine, are assessing exact Russian interests; a major miss out on economic benefits would not be rational for a set of other rather neutral nations than Ukraine. Consider the politics of language, while Nord Stream is still very vague and could include Baltic and western Scandinavia, “Turk Stream” is a prize won in the eyes of a shared Mediterranean neighborhood. It is like saying that Turkey won the rights to sell Russian reserves to European clients, that also have inhibitions against historical Turkish aspirations in the EU. Still, other reasons are held higher.

Uncharacteristically, China is behind all the insecurities in Europe. There is no secret on whether Sino-Russian ties could yield a similar energy route between two nations, both infrastructural might and President Xi’s willingness to expand the Belt & Road projects could easily accommodate energy linkups. For European leaders have realized that such possibilities could most possibly deteriorate Europe’s energy as well as economic balance. By 2030, Chinese energy needs are going to double from what it is now; Europe does not desire a vociferous Chinese demand taking away Russian reserves to the East. Alarmingly, European nations also realize that soon, a proposition as such is highly likely, given how current competition has taken down prices. After a decade of disturbing sanctions testing Russian sanctions, it will be waiting patiently for an overhaul in the form of ceiling new rate of prices. For Europe, America still might not have been redundant, but the US-Ukraine soft spot, certainly has.

The European dilemma does not end yet, for Russia has played the cards on both sides; it will have to forge a face-saving approach with Turkey, given how it has treated Ankara over issues relating to EU membership. Like an astute capitalist, Moscow is promising to feed Europe, whilst also biting into its wounds, forcing to deal with problems that may allow Russia an affirmation to jump over Chinese demands. On the backdrop of a successful Brexit, Turkey will be teasing at the European sanctity, a group that has continuously reminded it of being unsuitable. For Europe’s dislike, Russian reserves now flow through Turkish territories and might successfully ruin newly established competitors in the energy market. Underestimation has cost Europe again while Russia has lastly taken afoot. It is only the beginning of a grand Russian policy.

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