Oil, Gas, and European Politicians

One of the consistent refrains from the left-wing of European politics is that the US government is beholden to the interests of Big Oil, even to the extent that Bush was prepared to invade Iraq on their behalf.  It is not uncommon for advocates of an enlarged and more powerful European Union to cite independence from the US as a major benefit of such a development, presumably including independence from the manipulations of major oil companies.

Anyone interested in the politics of the oil industry, such as I am, wonders why Europeans spend so much time and energy criticising links between the US government and major oil interests, yet emit no more than a squeak when their own governments prostrate themselves in front of foreign oil and gas interests.

First we had Gerhard Schroeder, former Chancellor of Germany, who in November 2005 signed a $5bn agreement with Russia’s Gazprom to supply natural gas:

Officials including Prime Minister Mikhail Fradkov presided over the ceremonial welding of the first section of pipe at Babayevo in Russia’s Vologda region, where the Baltic link will diverge from an existing trunk pipeline and head for the coast.

Gazprom has teamed up with Germany’s E.on and Wintershall, part of BASF, to build the pipeline and is looking for a potential fourth partner, although it will retain a controlling stake of 51% in the project.

The onshore section of the pipeline will run 917 kilometres to the port of Vyborg, close to Russia’s second city of St Petersburg. The 1200 kilometre subsea link will terminate at Greifswald in Germany.

Very shortly after he found himself voted out of office, no doubt thankful he’d pushed the deal through for no more than a few weeks later he’d found himself another job:

Gerhard Schröder, the former German chancellor, is to be a director of a Russian-German pipeline consortium controlled by Gazprom, the Russian state-controlled gas group said on Friday.

As I said at the time:

Can you imagine the noise that would be made if the US signed an historic deal to export Alaskan crude to China, and George W. Bush took the reigns of the pipeline consortium weeks after leaving office?

Now if that wasn’t bad enough, Schroeder followed it up with this:

Former German Chancellor Gerhard Schroeder won a court order today upholding a legal injunction to silence a political opponent who criticised his appointment to a top job at the Russian-led gas North European Gas Pipeline company (NEGP).

Guido Westerwelle, leader of the opposition Free Democrats (FDP), had suggested Schroeder acted improperly in accepting the post of supervisory board chairman of NEGP after he had helped to launch the enterprise while in office.

After Schroeder won a gagging order last month, Westerwelle challenged the ruling, citing his right to freedom of opinion.

A court in the northern city of Hamburg rejected Westerwelle’s objection so if the FDP leader repeats his allegation, he could face a fine of up to €250,000 ($300,000).

Schroeder’s comment?  This:

“I cannot understand this criticism,” Schroeder told a news conference at the headquarters of Russia’s state-controlled gas monopoly Gazprom.

Now in April 2008 we have this, which also seems to be getting very little attention in the international press:

Gazprom chief executive Alexei Miller could offer outgoing Italian Premier Romano Prodi a top post with the company South Stream joint venture with Italian energy group Eni, Russian media reported.

News service RIA Novosti said Daily Kommersant quoted a government source as saying that Gazprom may repeat its move to make former German chancellor Gerhard Schroeder head of the shareholders’ committee for Baltic pipeline operating venture Nord Stream.

It seems as though there is a route to life after politics for failed left-wing politicians throughout Europe: sign a major pipeline deal with Gazprom in your last days of office, and enjoy a cosy position at the top of the tree in the pipeline consortium a few weeks later.

But far more worrying was this story from January of this year:

The Nord Stream consortium, which is planning to build a subsea gas pipeline from Russia to Western Europe, has called on the European Union executive for help so it can meet its construction schedule.

“If you think it is a done deal you are wrong,” Reuters quoted Wintershall boss Reinier Zwitserloot as telling reporters in Berlin.

“If we want to see gas flow through the pipeline in first half (of) 2011, all the necessary approvals must be obtained by mid-2009, but the EU Commission must help ensure that the project is not blocked by individual countries.”

Nord Stream is majority-owned by Russian gas export monopoly Gazprom, with Wintershall’s parent BASF and fellow German player E.ON owning 20% each. The Netherlands’ Gasunie has the remaining 9% stake.

Here we have a minor stakeholder in a gas pipeline consortium controlled by the non-EU Russian government calling for the EU to forbid individual countries – including those directly affected by the pipeline – from delaying its construction.

Zwitserloot said his frustration stemmed from numerous delays by individual EU countries that should not be tolerated, given a fast-rising gas shortfall in the 27-nation bloc.

The interests of a Gazprom-led pipeline consortium should take precedence over the wishes of the European electorate?

And these are the people who think the US, which regularly rejects applications from US companies to drill their own reserves, has problems with their leaders being in hock to the interests of the oil and gas industry.

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8 thoughts on “Oil, Gas, and European Politicians

  1. Great post – I absolutely agree with this. However, just out of curiosity, or just to play devil’s advocate, which lefty European politicians are you referring to, and what have they specifically said (or complained about) with regard to U.S. government ties to big oil?

    It is strange, but I seem to find the most energetic defenders of Europe’s policy toward Russian energy (like Schroder and Prodi) to come from both the far right and far left … such are the glorious benefits of authoritarian capitalism – the best and worst of both worlds…

  2. I cannot recall any particular left wing politician who accused the US of waging war on behalf of the oil companies, but I’m sure Googling about would produce more than a few results. I was referring to the European political left in general, not so much left wing politicians, who protested the Iraq War and made so much of Bush and Cheney’s oil connections.

  3. I guess Tony Blair could not be counted as left wing, otherwise clearly he has missed out on the gravy train. Unless he is still holding out for head of the EU.

  4. …delays by individual EU countries that should not be tolerated

    Who is he referring to specifically, and what are their reasons for the delays?

  5. Sorry for the off-topic comment, Tim. But I have just read that British fans will not need Russian Visa to come see the game in Moscow!
    Here is the very fresh article:
    This will make it much more easier for so many people, including the Russian embassy staff!

  6. Surely it’s simply a sign of desperation/naivate imagining that the EU can really forbid member states from opposing the pipeline with no incentives or benefits from the project? Perhaps the EU still has influence over Poland and Estonia, but that it has the pulling power to get Finland, Denmark and Sweden to do something they’ve declared against their national interests because of a ‘common interest’ project seems unlikely when the common energy policy is still in the wishful thinking stages.

  7. The main point is that Europe needs Russian energy. It cannot be replaced by wind factories, biofuel or whatever. Or by Caspian energy either. It is as simple as that. It cannot be stolen from Russia with PSA’s or with the establishment of American bases under the guise of NATO or with anti-missile bases. And Russia certainly doesn’t want the Baltic statelets to control its own resources.

    We southern and eastern Europeans especially need Russian energy. Its the most convenient. South Stream will help a lot but North Stream is also required for direct access to Germany. What Europe needs is oil and gas certainty of supply now not Lil’Esties farting about.

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