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The Sacramento Bee: Putin’s grab of Russian oil: Energy is a geo-political pawn in the hands of Vladimir Putin

By Llewellyn King
Published 12:00 am PDT Thursday, June 21, 2007

As Congress debates the new energy bill, nothing is dearer to the hearts of most Democrats than a provision known as the renewable electricity standard. Simply, this means that electric utilities will be mandated to generate about 15 percent of their electricity from renewable sources such as biomass, landfill gas, ocean geothermal, solar and wind.

Before Congress goes all the way down this road, it might want to take a look at the catastrophic misadventure that has befallen Western Europe as a result of the pursuit of a similar goal. Renewables are supposed to clean the air by reducing the amount of coal that is burned. But there is a hidden agenda: a pathological disinclination to use nuclear power.

Europe, like the United States, recognized in the 1960s that nuclear represented a new and secure way to produce electricity. But it ran into opposition from the anti-nuclear movement, particularly over concerns about nuclear waste.

The new generation issue was shelved by the appearance of a new machine for generating electricity: the aeroderivative turbine. These are high-performance jet engines operating on the ground at very high efficiencies. They were seductive, and they seduced the world’s utilities.

Their ideal fuel is natural gas, which emits fewer greenhouse gases than burning coal and oil. Capital costs are low, and gas turbines are more easily sited than big traditional power plants.

The nations of Northern Europe — Germany in particular — had turned against nuclear power and was keen to phase out coal. The North Sea was producing gas, and hard decisions on future electric generation could be avoided. Alone, France stuck with nuclear.

However, the new generating regime in Europe demanded additional supplies of gas — and they were available in abundance in Siberia.

Little by little, Russia realized that it could secure a political advantage in Europe by becoming its principal fuel supplier.

When the Berlin Wall crumpled, Western oil companies rushed in to help the Russians exploit the Siberian reserves of gas and oil.

Leading the charge was British Petroleum, closely followed by Royal Dutch Shell. The reasoning was simple: The Russians needed the technology and expertise of the West; and the Europeans needed Russian gas and oil.

A few countries recognized that a dangerous situation was developing. First among these was Finland. Although the green movement is strong there, the Finns had had an unhappy relationship with Russia and elected to build a fifth nuclear power plant, which is a lot of nuclear power for a population of 5.2 million.

Tony Blair’s administration was also concerned about Europe becoming too dependent on Russian energy. But the British prime minister was unable to convince his Labor Party of the need to build nuclear plants.

Germany, with its powerful Green Party adamantly opposed to nuclear, accepted the Russian Bear’s embrace with the greatest alacrity. When a new gas pipeline under the Baltic Sea is completed, Germany will be at least 50 percent dependent — and probably more — on Russian energy. Thus, Germany’s energy destiny has been decided for decades to come.

Energy is a geo-political pawn in the hands of Vladimir Putin.

Already the former Soviet satellites of Poland, Belorus, Ukraine and Georgia have had their gas supplies interrupted for political reasons by Putin’s Russia.

Putin also moved against Russia’s largest oil company, Yukos, accusing its leader Mikhail Khodorkovsky of tax evasion and other crimes and sending him to prison in Siberia. In no time, Yukos was broken up and seized by the state-controlled entities Gazprom and Rosneft. Now, more than 50 percent of Russian energy is owned by the state.

Meanwhile, Western companies have been largely driven out of Russia. And a joint venture between Russia and British Petroleum, known as TNK-BP, is under pressure. Royal Dutch Shell, after investing more than $22 billion, is being harassed out of Sakhalin Island in the North Pacific.

Optimistic Europeans had thought they could avail themselves of gas from the Caspian Sea, produced by Kazakhstan and Turkmenistan. The gas was to come through a pipeline under the Caspian and through the Caucasus.

Not so fast, said Putin. This route, favored by the United States, displeased him. And Putin has talked the central Asian countries into a Black Sea pipeline controlled by Russia.

Also, without protest, the Europeans allowed Gazprom to buy the largest natural gas hub in Europe in Baumgarten an der March, Austria.

It was sold to the Russians by the Austrian company that owned it.

Now the Russian Bear’s arms are firmly around most of the European Union, controlling not only the traditional uses of natural gas — heating, cooking and chemical production — but also the new use of electric production.

What the Warsaw Pact failed to achieve in its hopes of dominating Europe, Europe has conceded to Russia through energy dependence.

About the writer:
Llewellyn King is the publisher of White House Weekly (
www.kingpublishing.com) and host of the weekly PBS television show “White House Chronicle.” Readers may write to him at King Publishing, 807 National Press Building, Washington, D.C. 20045 Distributed by McClatchy-Tribune Information Services.

http://www.sacbee.com/110/story/232855.html

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