Michael MacKay, Radio Lemberg, 01.03.2018
Ukraine is in the vanguard defending Europe’s energy security from the predations of enemy Russia. Germany weakens Europe’s energy security by collaborating with Gazprom, Russia’s gas monopoly and the biggest financier of Putin’s war against Europe. Non-European Union member Ukraine does a better job standing up for European values than Germany, the largest member of the EU.
On February 28, the Arbitration Institute of the Stockholm Chamber of Commerce awarded a huge victory to Ukraine’s Naftogaz over Russia’s Gazprom. The Stockholm arbitration tribunal was ruling on a dispute over the transit of Russian natural gas through pipelines in Ukraine. The tribunal found in favour of Naftogaz on most of the major issues of the dispute, and awarded damages in the amount of $4.63 billion to be paid by Gazprom. Naftogaz made a statement after the award and explained: “The award means that Gazprom will have to make payments to Naftogaz in the order of $2.56 billion after residual payments for gas delivered in 2014 and 2015 have been settled.” $2.56 billion will go a long way towards improving the supply of natural gas to Ukrainian domestic consumers and the security of transit to westward European consumers.
The victory at the Stockholm Arbitration Tribunal puts Ukraine and Naftogaz in a much stronger position as a dependable and reliable supplier, both by source and by transit, of natural gas to Europe. It dramatically weakens the ability of the Putin regime and Gazprom to blackmail Ukrainian and other European consumers with gas supply cut-offs, as has been done frequently by Muscovy in the past. The ‘gas supply weapon’ is no longer in the arsenal of the Russian aggressor.
This is the second major victory in Stockholm of Naftogaz over Gazprom in the last three months. It’s the second big win by Ukraine for Europe’s energy security. In December 2017, the Stockholm Arbitration Tribunal decided in favour of Naftogaz after Gazprom made a ‘take-or-pay’ claim against the state-owned Ukrainian gas company. The tribunal decided that after Russia invaded and occupied Crimea, Ukraine was not obliged to pay for the Russian gas that the aggressor was supplying to Ukrainian territory under Russian de facto administration. Gazprom was demanding $56 billion, which the Stockholm panel ruled Naftogaz was not obliged to pay because the gas was not delivered to Naftogaz.
Ukraine won a third victory for Europe’s energy security which deserves more notice. After Russia invaded Ukraine’s southern peninsula of Crimea, in February-March 2014, Russia invaded Ukraine’s eastern region of Donbas in April 2014. Gazprom decided unilaterally to start supplying natural gas to Russian-occupied eastern Ukraine in 2015 and proceeded to demand that Ukraine pay for it. Gazprom has now given up on its attempt to get Ukraine to pay. Under international law, Russia is obliged to provide for the captive population of Crimea and Donbas because it is the occupying power over the parts of Luhansk region and Donetsk region that the Putin regime invaded and occupies. Russia never adheres to international law because it is the right thing to do, but Gazprom nevertheless stopped sending invoices to Naftogaz because the Russians realized they would never collect.
Naftogaz got three big wins for Ukraine and for Europe’s energy security in three months. The company did it because it is a sensibly managed state corporation that did its due diligence over four years of bitter dispute. Gazprom is a criminal monopoly which finances the Putin-Kremlin regime of state terror and the imperialist policy of Russian aggression, which includes the invasion of Ukraine by Russia. Ukraine defends Europe, alone, on the battlefront in Donbas. At the same time, Ukraine has weaned itself off of Russian gas, and can meet most of its needs from domestic production. It can do this because of reforms since the Revolution of Dignity of 2013-14, which moved Ukrainian domestic gas consumers to market prices and allowed Naftogaz to finally begin to exploit Ukraine’s rich natural gas sources efficiently and in the interests of the Ukrainian nation. Also at the same time, Naftogaz and Ukraine have won energy security victories for down-the-pipeline natural gas consumers in central and western Europe, who no longer have to fear Russian blackmail and the ‘you will freeze in the winter’ threats from the Putin regime.
In response to the defeats of criminal monopoly Gazprom to well-managed Naftogaz, Russia has concocted a scheme to deprive Ukraine of gas transit revenue, increase the dependence of European countries other than Ukraine on Russian natural gas, and to destroy Europe’s energy security. The scheme is called Nord Stream 2, and it is a weapon of Putin’s war of aggression against the West. Nord Stream 2 would be a natural gas pipeline that runs under the Baltic Sea from Russia (including Russian-occupied Finnish Viipuri) to Germany. The Nord Stream 2 scheme to corrupt Europe’s energy security is backed by the German, Austrian, and French governments, and by the companies OMV, Royal Dutch Shell, Engie, Uniper, and Wintershall.
The United States has sanctions against Russian individuals and entities – including Gazprom – for constituting a grave threat to international peace and security because Russia is invading Ukraine. US sanctions are shaking the confidence of Germany, Austria, France and the German, French and Austrian companies in their ability to gain anything from Nord Stream 2. Gazprom, Gerhard Schröder, and the Russo-centric German ‘Ostpolitik’ nostalgists are nevertheless blundering on to disaster. Ukraine, Estonia, Latvia, Lithuania, Poland, Denmark and other countries are firmly opposed to Nord Stream 2 because they recognize that it is nothing but a trap by Russia to destroy Europe’s energy security and take away the contribution gas transit makes to Ukraine’s economy, which is about 10% of Ukraine’s gross domestic product. Nord Stream 2 is a weapon of Putin’s War.
Germany is the leading economy of Europe and should be defending Europe’s energy security and fighting against Russian aggression. But it’s doing the opposite. Ukraine is the largest country that lies wholly within Europe and it is heroically rescuing Europe’s energy security. Ukraine is the sole fighting defender against Russian aggression. Germany should be ashamed for supporting the Nord Stream 2 corruption scheme and the attack that it constitutes by Russia against Europe. Ukraine can be proud that is has won three major victories against the criminal monopoly Gazprom and has proven itself to be the quintessential European nation – the vanguard of the West.