It smells gas ! Trump and the end of the war in Ukraine...
/In recent weeks, and even more so since the election of Donald Trump, the press has been abuzz with rumours of peace negotiations, an armistice or, more simply, a ceasefire in the Russian-Ukrainian conflict. Various theories are being put forward as to the characteristics of a possible agreement. Most of them put forward an interim territorial settlement, not recognised by the international community, but reflecting the reality on the ground with a freeze along the front line.
A sort of "Korean-style" solution is even envisaged, with the - very hypothetical - presence of British and European peacekeeping troops on Ukrainian territory. All this would be accompanied by a long-term moratorium on Ukraine joining NATO.
At present, such a lose-lose solution would leave part of Ukrainian territory to Russia and, to a lesser extent, part of Russian territory to Ukraine.
For Russia, such a settlement would be a twofold violation of its Constitution: firstly, the "four new territories" (the regions of Donetsk, Lugansk, Zaporozhie and Kherson) are declared to be Russian and yet part of them would continue to be in Ukraine; secondly, the occupation by Ukraine of part of the Kursk region, an internationally recognised Russian territory, would then be legitimised de facto.
As far as Ukraine is concerned, such a solution would directly call into question the legitimacy of its territorial integrity by accepting the loss of Crimea without hesitation, and would negate its desire to join NATO, which has been stated in its Constitution since 2019.
As described by the press, the situation seems inextricable, at least based on purely territorial or international security policy assumptions.
Tragic though it would be, prolonging the conflict would not be unthinkable. We need only think of the length of the two world wars (1914-1918, 1939-1945), the Vietnam wars (1946-1954; 1955-1975), and the Soviet (1979-1989) and American (2001-2021) interventions in Afghanistan.
However, such a prospect would be a direct affront to Donald Trump, President-elect of the United States, who, during the election campaign, claimed to have the ability to settle this war in a matter of hours. In May 2023, the future president declared: "If I were president, and I say I am, I would end this war in one day. It would take 24 hours. I know Zelensky well, I know Putin well". Returning to this question, he said again in September 2024 that he had a precise plan: "If I win as President-elect, I will see to it that an agreement is reached...".
The press is full of talk about President Trump's unpredictability, to say the least, but it overlooks a few other notable aspects of his personality.
Firstly, he is a businessman accustomed to tough negotiations, based mainly on economic, financial and personal interests, and never complicating the transaction with societal or moralistic approaches.
What's more, he is a businessman whose policies are based primarily on the interests of the United States, at least according to his own understanding of them.
In the mind of the American President, the current puzzle consists, first and foremost, of guaranteeing the interests already withdrawn from this Russo-Ukrainian conflict by the United States, such as the weakening of Europe, massive purchases of American weapons from abroad and domination of the gas market after the elimination of Russia. All this while managing to freeze the conflict before the massive use by the Ukrainians of American missiles aimed at Russian cities finally led to an appropriate response from the Kremlin.
Farther removed from notions of international politics or strictly military and strategic issues than traditional American politicians, President Trump could try to find a solution closer to the issues he regularly deals with, such as economic and financial interactions.
Under such an approach, the gas issue comes back to the forefront of this international imbroglio.
After numerous sanctions, counter-sanctions and diversions drastically reducing the quantities of Russian gas arriving 'directly' in Europe since the launch of the special military operation in February 2022, Ukraine officially halted the transit of Russian gas to Europe on 1st January 2025, marking a major change in European energy dynamics following the expiry of a five-year transit agreement with Russia.
Such a decision has several harmful consequences. Firstly, a net loss for Russia, which can no longer transport and sell gas directly to Europe. Secondly, a loss for Ukraine, which no longer receives royalties for the transit of Russian gas. In addition, an energy crisis is developing in certain Eastern European countries, in particular Moldavia and the secessionist Republic of Transnistria. Finally, there is a likely increase in gas prices of at least 10% for European consumers.
This termination by Ukraine of Russian gas transit to Europe puts an end to a long-standing arrangement, in place since the Soviet era and regularly renewed since the fall of the USSR, which allowed Russian gas to pass through Ukraine to various European countries.
In December 2019, in response to the new US sanctions against the Nord Stream-2 pipeline and the subsequent delays to the project, Gazprom and Naftogaz, the Ukrainian state-owned energy company, renewed their contract for the transit of natural gas between Russia and Europe for 2020-2024. This contract provides for the transit of at least 65 billion m3 in 2020 and 40 billion m3 per year from 2021 to 2024. It is this same contract that has not been extended to 31 December 2024, even though, almost three years after the start of the conflict, it was still supplying Europe with 15 billion m3 of gas a year - still more than a third of the quantities planned in peacetime
Such a deadlock can only have a negative influence on any negotiations aimed at bringing the conflict to an end, even temporarily. On the one hand, Russia could be annoyed by this new setback. Secondly, the European countries directly concerned would be justified in reducing their aid to Ukraine, or even stopping it, as Slovak Prime Minister Robert Fico is threatening to do. Finally, Ukraine - having lost the royalties linked to transit - would once again turn to its creditors, now weary of support that is increasingly geared towards granting non-repayable aid. This would become a certainty over time, unless a Russia in military, economic or social disarray were to give the West the impression that it would "pay" to get out of its predicament.
Deus ex machina! - an amicable solution could be found, as the Serbian president suggested in an interview published by Handelsblatt on 27 December 2024:
"...I dare to make a prediction: in a year's time at the latest, Nord Stream will be owned by an American investor and gas will flow from Russia to Europe via this pipeline. Remember what I said. One year to make Nord Stream work!”
This statement may come as a surprise, but it reflects a variety of positions and reflects very real economic, financial and technological realities.
Firstly, on the Russian side, on 26 December 2024 President Putin** once again reaffirmed, at the closing press conference of the meeting of the Supreme Eurasian Economic Council, that Russia was ready to supply gas to Europe:
"As far as energy agreements are concerned, we have always been in favour of supplies and have always advocated the depoliticisation of economic issues. We have never refused to supply Europe. Did we refuse? [...] War is war, but we supplied regularly and paid, and are still paying, money for transit [through Ukraine]."
Surprisingly, at no point does the Russian President mention the Nord-Stream 1 and 2 pipelines, imagined as solutions to the transit problems via Ukraine that have persisted since the Orange Revolution in 2004.
Russia's first success at the time, the commissioning of the Nord Stream-1 gas pipeline reduced natural gas exports transiting through Ukraine to Europe from 80% to 45% between 2011 and 2019. The commissioning of Nord Stream-2 - placed alongside the Nord Stream-1 pipeline - should have doubled the total capacity of the Nord Stream system, taking it from 55 billion m3 to 110 billion m3 per year . [1]
However, from the outset, the various US administrations, with strong support from Congress, have opposed Nord Stream-2 head-on through a series of targeted laws introducing increasingly stringent sanctions from 2017 onwards. These sanctions take the form of two main laws: the Countering Russian Influence in Europe and Eurasia Act of 2017 (CRIEEA) and the Protecting Europe's Energy Security Act (PEESA), which will be strengthened in 2020.
A fatal turning point in the fate of Nord Stream-2 is the US-German Joint Statement of the United States and Germany on Support for Ukraine, European Energy Security, and our Climate Goals signed in July 2021. In this statement on support for Ukraine and energy security, Germany undertakes to act against Russia, including possible sanctions, if it uses its energy resources as a weapon of pressure or commits further aggression against Ukraine. Under the terms of the declaration, Germany also undertakes to act in favour of extending the gas transit agreement between Ukraine and Russia, and to invest in energy projects in Ukraine.
A second turning point was the completion of Germany's vassalage to the United States in the field of energy supply on 7 February 2022. During his first visit to Washington, Chancellor Scholz, Angela Merkel's successor, and President Biden declared that in the event of another Russian invasion " there will be no more Nord Stream-2. We will put an end to it". Chancellor Scholz replied: "You can be sure that there will be no measures for which we have a different approach. We will act together, jointly".
Finally, a fatal turning point came on 26 September 2022, when four explosions, believed to be an act of sabotage, destroyed three of the four sections of the Nord Stream 1 and 2 pipelines carrying gas from Russia to Germany.
Various investigations have since been carried out, but no one has yet been identified as the instigator of the sabotage. Technical assessments indicate that Nord Stream 1 and 2 could resume full operation if works costing around $500 million were undertaken.
Angel man - creative solutions
In its issue of 21 November 2024, the Wall Street Journal reported that American entrepreneur and investor Stephen P. Lynch had applied to the US federal government[2] for permission to bid for the Nord Stream 2 gas pipeline, after the infrastructure operator - a Swiss subsidiary of Gazprom - was put into bankruptcy proceedings shortly after Russia's invasion of Ukraine. The Wall Street Journal reports that it has obtained a letter from Lynch's lawyers to the US Treasury Department dated on February 2024.
In this letter, the contractor requested the Treasury Department's agreement to negotiate the acquisition of the pipeline if Nord Stream were to be auctioned off as part of the bankruptcy proceedings initiated in Switzerland, which should be legally concluded at the very beginning of 2025.
Nord Stream 2 was completed shortly before the Russian invasion of Ukraine in 2022, but was never certified by the German administration, and now has only one working section out of two. "This is a unique opportunity to ensure American and European control over Europe's energy supply until the end of the fossil fuel era," said Stephen P. Lynch in an interview with the newspaper. Lynch in an interview with the newspaper
The Miami businessman, who has made several donations to Donald Trump's election campaign and has long worked in Russia, is also said to have told the authorities that American control of Nord Stream 2 could also make a positive contribution to possible peace negotiations in the conflict in Ukraine.
It should be noted that in 2022, the Treasury Department had already granted Lynch authorisation to buy the Swiss subsidiary of Sberbank - the Russian savings bank.
Such an eventuality could be no more than a trial balloon, but the set-up does have a solid legal basis.
Firstly, in the United States, the main law organising US sanctions on Russian gas (PEESA) also provides for their repeal, subject to two conditions:
the US President certifies to Congress "that appropriate safeguards have been put in place" - to minimise Russia's ability to use the sanctioned pipeline project "as a tool of coercion and political leverage".
to ensure "that the project would not result in a decrease of more than 25% in the volume of Russian energy exports through existing pipelines in other countries, in particular Ukraine, compared to the average monthly volume of Russian energy exports through these pipelines in 2018".[3]
The first condition remains a political assessment, at the discretion of the American president, which would be largely validated by the structure of the European gas mix before 31 December 2024, where the share of Russian gas has already fallen sharply. As the Council of the European Union points out, "the share of Russian pipeline gas in EU imports has fallen from over 40% in 2021 to around 8% in 2023. For pipeline gas and LNG combined, Russia accounted for less than 15% of total EU gas imports"[4] . This reduction was made possible mainly by a sharp increase in LNG imports from the United States and Norway and an overall reduction in gas consumption in the EU.
The second, more legal, condition is self-evident, simply because Ukraine has unquestionably refused to allow Russian gas to transit through its territory. As a result, any relaunch of Nord Stream can no longer result in a 25% reduction in the quantities of Russian gas transported through this country.
In November 2021, one of the main obstacles to the certification of Nord Stream 2 in Germany was the German energy regulator's last-minute demand that a subsidiary be set up "beforehand" to operate the pipeline on German territory, before any certification could be granted. Surprisingly, although the project had been under way for many years, this "detail" did not come to light until November 2021. Clearly, this type of "unexpected" delay could not affect an American company, which is an ally by nature.
Conclusion
The resumption of operations, after repairs, the entire Nord-Stream 1 and 2 pipelines, or more simply the rapid use of the still intact section of the pipeline, offered a number of developments, some of them positive.
The first would be to de-politicise and de-dramatise the gas issue in Europe, whose turmoil has been undermining European security for over twenty years.
The second would be to respond to Russia's repeated indications of the possibility of resuming gas deliveries, including reduced deliveries, corresponding to the quantities transiting through Ukraine until 31 December 2024.
The third would be to give an indication of the West's desire to move forward in its relations with Russia, at the same time as concomitant negotiations are initiated to put an end, in one form or another, to the current conflict that is bloodying Europe.
Finally, such an arrangement would allow the United States to present itself - for once - as a "peacemaking" power, while at the same time developing its stranglehold on Europe's gas supply by guaranteeing its "controlled" arrival from Russia.
An environment that is certainly conducive to more realistic negotiations that are less subject to negative influences based on ideological or societal approaches, as was the case at the peace negotiations held in Istanbul between Russia and Ukraine in April 2022.
Gaël-Georges Moullec
Doctor of Contemporary History, qualified to conduct research, associate member of CRESAT - worked for many years in NATO's Russia-Ukraine relations section.
**You can see: https://www.sdbrnews.com/sdbr-news-blog-fr/le-bilan-de-lanne-2024-par-vladimir-poutine
[1] As part of Nord Stream-2 AG, the pipeline is owned by the Russian state-owned energy company Gazprom, and half of the construction costs were financed by five European companies: Engie, OMV, Shell, Uniper and Wintershall.
[2] The newspaper reports that it has obtained a copy of the letter sent by Stephane Lynch to the US Treasury Department in February 2024.
[3] Protecting Europe's Energy Security Act of 2019 ("PEESA" or "the Act," Title LXXV, National Defense Authorization Act for Fiscal Year 2020, Pub. L. No. 116-92)
[4] https://www.consilium.europa.eu/fr/infographics/eu-gas-supply/#:~:text=G%20et%20Refinitiv-Augmentation%20des%20importations%20de%20GNL,ses%20importations%20totales%20de%20GNL
Photo credit: Telos
