Russian oil pipeline interruption intensifies struggle for raw materials

By Peter Schwarz
10 January 2007

The interruption of oil supplies through the most important pipeline between Russia and Europe has unleashed a vigorous debate over the future supply of power to Europe.

Overnight Sunday (January 7) the Russian pipeline monopoly Transneft cut off the Druschba pipeline—the most important pipeline between the oilfields of Western Siberia and the refineries of Europe. Germany relies on this pipeline, with its daily capacity of 2 million barrels (318 million liters), for a fifth of its requirements. Poland also relies heavily on the pipeline for its energy needs.

Behind the break in supplies is a conflict between Russia and Belarus, which transports the oil over its territory.

At the start of the year the Kremlin-controlled Gazprom company increased the price of its gas to Belarus from US$46 to US$100 per 1,000 cubic meter. Russia also introduced a tariff of US$180 per ton of oil exported to Belarus. Gazprom argued that the price increase was aimed at preventing Belarus from reselling cheaply imported Russian oil at the world price.

The regime in Minsk took revenge by imposing a transit fee of US$45 per ton for oil delivered from Russia to Europe. According to Russian sources, after Transneft refused to pay this fee Belarus responded by trying to extract oil from the pipeline. Transneft then responded by shutting off its taps.

At the moment an end to the conflict is not in sight. Nevertheless it is estimated that Europe will not experience a direct energy bottleneck. On the one hand, most European countries have reserve oil supplies sufficient for two to three months. On the other hand they could also import oil through other pipelines or via sea routes.

However estimates of the long-term consequences stress the seriousness of the situation. The European Union imports 82 percent of its oil and 57 percent of its gas from third party states. In 25 years this percentage will rise to 93 percent of its oil and 84 percent of its gas.

In particular, the former German Social Democratic Party-Green coalition government led by Chancellor Gerhard Schröder had set its sights on a long-term energy partnership with Russia, which had been a dependable supplier in former Soviet times. Schröder himself enjoys a close personal relation with the Russian president, Vladimir Putin, and currently chairs the supervisory board of the Baltic Sea gas pipeline consortium, with his salary paid by Gazprom.

A year ago a similar conflict between Russia and Ukraine had led to the short-term interruption of Russian gas supplies to Europe. Following the latest disruption, importing Russian energy is now being seen as an increasingly risky business.

German Chancellor Angela Merkel (Christian Democratic Union), remarked that the Russian-Belarus energy conflict demonstrated that Germany could not make itself overly dependent on a particular energy supplier. She declared energy security to be a central theme to be dealt with under the German presidency of the European Union, which began on 1 January.

Ernst Uhrlau, the head of the German foreign secret service (BND), also declared his interest in the matter. The interruption of German supply demonstrates that the issue of energy security was a theme of central significance for Germany and its security services, he said.

The Federal Association of Energy Consumers (VEA) also warned against increasing German dependence on Russian gas and oil. In Hanover the VEA chairman Manfred Panitz declared “What Russia is now doing to the former Soviet states could also happen to us . . . Dependence on Russia is damaging, I regard it with concern.”

Declining oil supplies from the North Sea should not be met by increased imports from Russia Panitz, he added. Otherwise the Russian percentage of German energy supplies could quickly rise from 30 to 50 percent.

The search for alternative energy sources has broad political consequences and brings Europe into conflict with other Great Powers—i.e. the US, Japan and the energy-hungry expanding consumers China and India, which are all intent on chasing increasingly scarce energy reserves. In addition, European governments, intent on securing their own individual requirements, are wildly at odds when it comes to developing a common energy policy.

A central aim of the US wars against Afghanistan and the Iraq was to bring the large reserves of oil and gas in central Asia and the Gulf region under US control. This was also behind the refusal by the German, French and other European governments to participate in launching the Iraq war. They saw their own imperialist interests endangered and sought instead to develop their cooperation with Russia.

The self-confident actions of Russia, which is deliberately using oil and gas as a means to pursue its foreign policy objectives, are now driving European countries back into the arms of the US. Chancellor Merkel’s first trip after taking over the presidency of the European Union was to Washington, where she demonstratively sought to strengthen the position of the politically weakened American president. During her visit she refrained from uttering a word of criticism at Bush’s plans to increase the number of US troops in Iraq or the hasty execution of Saddam Hussein. French President Jacques Chirac is also currently cooperating with the US in Lebanon against Syria.

Any closing of ranks with Bush, however, cannot wipe out the differences between Europe and the US. While Merkel offers her support to Bush, she is also determined to emphasize the importance of German and European interests.

The German government has planned an ambitious program for its six-month presidency of the European Union. It is intent on submitting a plan of action for energy at the summit planned for the spring of this year. The aim of the plan is to secure the supply of energy and raw materials to Europe. At the same time, the German government is seeking to advance the Lisbon-Process, which aims to make the European Union more competitive internationally by increasing labor flexibility.

In June it plans to present a plan for the revival of the introduction of a constitution aimed at giving the European Union a united voice on foreign policy issues, under conditions where larger partners—such as Germany—will play a leading role in determining policy.

These efforts are closely bound up with military rearmament. The European Union cannot proceed to take on the US as a serious rival without drastically increasing its military capacities. German or European Union troops are already active in important crisis centers in the Middle East (in Lebanon), Afghanistan, and the horn of Africa. Against this background, the struggle over “energy security”, i.e. access to oil and gas reserves, becomes a driving force for increasing militarism.

In an interview appearing on Tuesday in the Times of London, the German chancellor declared, “For us energy is what coal and steel used to be.” Merkel was referring to the origins of the European Union, which emerged from the European Coal and Steel Community, but it is more relevant to the period leading up to the two world wars of the last century, when the coal reserves of Lorraine and then in the German Ruhr area played a major role in the move towards hostilities.

The current conflicts surrounding Russian energy supplies and the corresponding international reactions underscore the impossibility of any rational and peaceful use of world resources under a social system controlled by powerful companies and dominated by the drive for profit.