Sore Point: Baltic Pipeline Set to Mar Polish-German Relations Unless New
German Cabinet Undoes Damage
Polish News Bulletin; Sep 14, 2005
X-Sender: Asbed Bedrossian <asbed@usc.edu>
X-Listprocessor-Version: 8.1 — ListProcessor(tm) by CREN
The following is a summary of an article by Radek Sikorski, former
deputy minister of defence, the PiS’s national security expert, and
Jacek Saryusz-Wolski, former European minister, European deputy
(PO). – Words and Deeds The text comes as Germany and Russia sign an
agreement for developing a Baltic gas pipeline that will directly link
the two countries while circumventing Poland and the Baltic states.
Many of us, write Sikorski and Saryusz-Wolski, were moved by the words
spoken by Horst Koehler, Germany’s president, during the celebrations
of the 25th anniversary of Solidarity in Gdansk. There was loud
applause when he pledged for Germany to never again deal above
Poland’s head. “Nothing about you without you,” pledged the German
president.
Reminiscing the spontaneity with which ordinary Germans were sending
aid packages to Poland during the grim martial-law era, Koehler even
said that proved “we can rely on each other.” Friendly relations with
Germany are, of course, in Poland’s interest and have been yielding
various benefits. Just as Germany would not have reunited itself
without the peaceful Solidarity revolution, so Poland would never have
joined the EU without the support of its western neighbour and ally.
Yet, write Sikorski and Saryusz-Wolski, there is an obvious contrast
between what the German president said in Gdansk, and what chancellor
Gerhard Schroeder is doing this week in Berlin: signing an agreement
with Vladimir Putin on developing a Baltic gas pipeline that will
circumvent Poland.
The North European Gas Pipeline will cost at least $6 billion more to
develop than the second line of the Yamal pipeline, whose development
is provided for in the 1993 Polish-Russian gas contract. Given
Poland’s support for the idea of developing a second line of the Yamal
through Poland, one suspects with near-surety that the only purpose of
the Russo-German project is to circumvent Central Europe with
strategic infrastructure. From the point of view of Russia’s
interests, the point is to create a situation where it will be
possible to cut off gas supplies to the former Soviet bloc countries
without jeopardising relations with the top European players, such as
Germany. As the press reported, there had been no consultations
between Berlin and Warsaw on the issue.
Poland has reasons to be afraid. It wants to have as good as possible
relations with Russia but it cannot be blind to plans for using energy
supplies for political ends. Russia used to be cutting off supplies to
the Baltic states when they were striving for independence. It has
continued to this day to use oil export to exert pressure on the
government of Latvia. The Kremlin political technologists used
millions of dollars from the budgets of Russian energy companies in
Ukraine to influence the outcome of the last presidential elections
there. In Armenia, Bulgaria, and Hungary, Russian acquisitions in the
energy sector have been followed by corruption and growing influence
of political forces that can hardly be described as pro-European or
pro-Atlantic.
In Poland, too, we remember all too well the ambiguities associated
with the high-capacity fibre-optic cable laid alongside the existing
stretch of the Yamal, last year’s unannounced interruptions in gas
supplies to Belarus and Poland, or the corrupt political games
accompanying Russian companies’ attempts to buy energy-sector assets
in Poland. After the phoney trial of Mikhail Khodorkovsky, no one
should be deluding himself that Russia’s energy sector functions
according to free-market principles. – Questions to Germany Germany’s
consent, write Sikorski and Saryusz-Wolski, to such Russian policies
is all the more surprising because the development of the Baltic
pipeline will be harmful for consumers in countries-importers of
Russian gas, as it will be the consumers who, this way or another,
will ultimately bear the project’s extra costs. The German government
is getting involved in a project that will cause its citizens to pay
more for gas than with the originally planned route, which will
benefit a couple of German companies and that part of the Russian
establishment that perceives the possibility of energy blackmail as a
way of exerting strategic influence on Russia’s neighbours. The German
society is being unconsciously pulled into a game that does not serve
its good.
The Schroeder administration’s consent to satisfying the country’s
valid energy needs at the cost of its own citizens and without paying
attention to Poland’s position raises several obvious questions. Does
the “nothing about you without you” principle apply to all issues or
only those where its application does not entail any costs for the
German party? How to understand a situation where the German
chancellor is speaking to the Russian leader above the heads of the
Central European EU member states? How to develop the EU’s common
foreign policy, on which such high hopes are being pinned and which is
to be a mechanism of defending the whole EU’s interests, if the
interests of some member states are being ignored in such a blatant
way?
We fear, write Sikorski and Saryusz-Wolski, that the issue of the
Baltic pipeline will spoil Polish-German relations. It concerns
something that Poland perceives as its vital interest in a first-rate
national security area. Poland could respond to the planned project by
passing an energy security bill banning the use of the Polish
territory, coastal belt, and air space for projects perceived as
unwelcome. It is also unlikely that the German companies participating
in the Baltic project will be treated favourably by the Polish state
in public-financed contracts. Poland will need to seek ways to make up
for the losses resulting from the breaching of the international
agreement on developing the second line of the Yamal.
Every reasonable person should be interested in the Poles and Germans
not only overcoming the historical stereotypes and prejudices but
actually reinforcing mutual confidence and trust. We would like to be
sure that Poles and Germans can rely on each other. That is why, in
the face of the signing of a contract that can become a sore spot in
our relations for a long time to come, we hope that the new German
government will fundamentally alter Germany’s position on the issue. –
Adam Szejnfeld (PO) The Russo-German agreement proves the incompetence
of the four-year rule of the leftwing government in Poland. The SLD
has been unable to ensure Poland’s energy security, nor its strong
position on the international scene. If that position had been better,
perhaps Germany would not have decided to back the project, and the EU
would have been more sceptical about it. One of the priorities for the
new government in Warsaw will be defining Poland’s energy security
needs in real terms. However, we must not be taking offence at the
top European players, which is why it is important to improve
relations with Germany and France, and Russia. – Janusz Steinhoff
former economics minister (1997-2001) The new government in Warsaw
will need to draw up a new energy strategy and implement it
vigorously. The Russo-German agreement is a result of Poland’s passive
attitude. The EU has adopted three priorities with regards to gas
infrastructure: the pipeline through the Baltic, the second line of
the Yamal, and a development of transit infrastructure in
Ukraine. Signing a new gas agreement with Russia in February 2003,
Poland in fact ceded the decision on the second line of the Yamal to
Russia. Besides, in the last four years PGNiG [Poland’s state gas
importer] has only been talking about diversification plans, first
about a compressed-gas terminal, then about a Szczecin-Berlin
pipeline, and, more recently, about an LNG terminal. None of those
projects has gone beyond planning stage. – Jacek Piechota economics
minister Table. Largest companies in Central and Eastern Europe
(turnover in 2004, $ billion) Company country sector turnover Lukoil
Russia oil 33.8 Gazprom Russia gas 31.2 RAO JES Russia power 28 RZD
Russia railways 22.9 TNK BP Russia oil 14.3 PKN Orlen Poland oil 11.2
source: Rzeczpospolita Even before Poland joined the EU, the 15 states
had defined in 2002 a list of priority gas projects that put the
Baltic pipeline and the second line of the Yamal on an equal
footing. The European Commission is expected at its autumn session to
ultimately define the validity of those projects. Which if them is
carried out first will depend, of course, on the money, which should
be provided by the companies involved. PGNiG can hardly be expected to
finance a pipeline through Poland, especially if we compare its
financial muscle with that of companies like E.ON or BASF. It is sad
that both those companies had found themselves under political
pressure, and the agreement with Russia is part of chancellor
Schroeder’s re-election campaign. – Rzeczpospolita editorial comment
In president Putin and chancellor Schroeder’s presence, Russia and
Germany signed last week an agreement on developing a gas pipeline
through the Baltic.
It is a politically-motivated decision unfriendly towards Poland. In
business terms, a naval pipeline will cost far more than a land one,
such as the hypothetical second line of the Yamal pipeline that goes
through Poland. That latter project has for now been shelved and it is
unclear whether the Russians will ever return to it.
For Russia, circumventing Poland, Ukraine, and Belarus offers an extra
instrument of political pressure towards the countries between Russia
and Germany.
For Schroeder, the contract with Gazprom means big new orders for
German companies, ie economic success, something that the troubled
German economy needs more than anything today. As the German elections
are nearing, the gift from Putin offers not only economic but also
political advantage for Schroeder.
For Poland, the deal is a reminder of the consequences of a lack of
decisiveness in pursuing one’s own geopolitical interests. The issue
of gas supplies should be a fundamental element of Poland’s economic
policy. The rightwing cabinet of Jerzy Buzek made an attempt to
diversify Poland’s supply sources by signing a preliminary agreement
on the development of a pipeline from Norway.
One of the first decisions of the post-communist cabinet of Leszek
Miller was to cancel that deal under the pretext that it was too
costly. Since then, Poland has done virtually nothing to develop
alternative and secure natural gas supply routes.
Only now, when the cabinet’s term is drawing to an end, plans for
alternative pipelines through Ukraine or the Balkans have started
spring up one after another. It is good the possibilities exist.
The point, however, is not to waste them. That will be the job of the
new cabinet which should above all strive for those new gas projects
to receive strong backing from the EU as a whole. Its interests are
not completely identical with those of Germany and Schroeder, and
certainly not with those of Putin and Gazprom. Now the Brussels
administration needs to be convinced about that. – Gazeta Wyborcza
editorial comment Vladimir Putin’s explanations why Russia needs a
pipeline under the Baltic have been convoluted and falsely-sounding:
that Ukraine is threatened by “destabilisation” (not true, Ukraine has
become a safer place to invest following the orange revolution),
Poland has no money for developing a second line of the Yamal (where
did he hear that?), and the new pipeline will produce “cost savings”
(while in reality it will be two-three times more expensive than a
line through Poland). Putin’s conclusion is: “The whole project has
nothing to do with politics.” The truth is precisely the opposite. The
Kremlin wants the new pipeline precisely for political reasons.
The Baltic pipe will make the Central European countries, especially
Poland, even more dependent on Russia than before in terms of energy
supplies.
Russia has a long tradition of using the gas faucet in disputes with
other countries. Wee had a taste of that in the spring 2004 when
supplies to Belarus, and thus to Poland, were suddenly cut off for 24
hours. Earlier, Russia had used the same bugaboo to exert pressure on
Lithuania, Georgia, and Ukraine.
But using the “faucet argument” against Poland had been difficult due
to the fact that Germany is at the end of the same pipe. That is now
going to change. As the Deutsche Welle radio commented: “A
German-Russian border has been created.”
For the incumbent German cabinet, the political considerations, though
not the only ones that matter, are also crucial. Gerhard Schroeder
has for years preferred the Berlin-Paris-Moscow triangle to the
relations with the “lesser mortals.” One consolation is that his
defeat in the upcoming elections may ?
though does not have to ? put an end to that policy.
What should Poland do?
It should ultimately abandon the illusion that, though we are
dependent on Russia in energy supplies, a common faucet with Germany
means we can feel safe. Now that the Germans will have their own
faucet, it becomes clear how short-sighted such thinking, professed
chiefly by the SLD, was. And it was it that caused the post-communist
cabinet of Leszek Miller to cancel the plans for developing a pipeline
from Norway through Denmark.
Today, those, or other, plans for diversifying Poland’s supply sources
need to be reconsidered.
The second thing are serious talks with the incoming Christian
Democrats in Germany. Angela Merkel, who will probably become the new
chancellor, said recently in Warsaw that “eastern policy cannot be
carried out over Poland’s head.”
We are keeping her by her word. – Gas Myths About Poland Will Poland
lose revenue from the gas transit fees? It didn’t have the money to
co-finance the second line of the Yamal? Did it want to blackmail
Russia?
Many myths have emerged in the debate on the Baltic pipe. Gazeta
Wyborcza attempts to find out the truth.
Myth 1: Poland opposes the Baltic pipeline because it will lose
revenue from existing transit fees, Russian, French, and German
experts have been saying.
Not true. Poland charges no fees for the transit of gas from Russia to
western Europe. Transit fees are charged by the Polish-Russian company
EuRoPol Gaz. However, it was decided as early as in 1994 that EuRoPol
Gaz would operate on a non-profit basis, paying no dividend to its
shareholders, including the Polish state-owned gas importer PGNiG. The
2003 Polish-Russian gas contract includes a schedule of gradual
reductions in the transit fees charged by EuRoPol Gaz through
2019. The transit fees are even exempt from the VAT. Poland not only
does not receive any fees or dividend for the transit of Russian gas,
but has actually granted EuRoPol Gaz sizeable public aid in the form
of tax and customs duty breaks.
Myth 2: The pipeline had to be build under the Baltic because Poland
had no money for one through its own territory. That is what Vladimir
Putin told Die Welt. Poland’s economics minister Jacek Piechota
offered a similar remark: “You can hardly expect PGNiG to finance the
development of a pipeline through Poland.” Yet neither the 1993
Polish-Russian agreement on the development of the Yamal pipeline, nor
a 1997 financing agreement provide for the funds to be put up by
Poland or PGNiG. In the whole world such projects are financed with
bank loans taken against the future transit fee revenues, and so was
the new pipe through Poland to be financed.
Myth 3: Poland wanted a pipe through its territory to be able to exert
pressure on Russia. “I’ve heard one of the reasons the Poles would
like a pipe through their territory is to be able to cut off supplies
to negotiate more successfully with Russia,” said Giles Chichester,
head of the European Parliament’s energy committee. There have been
cases of Gazprom cutting off supplies to Poland, but it has never
happened with the Polish-Russian EuRoPol Gaz. The Polish-Russian gas
contracts also precisely define the hefty penalties Poland would pay
if transit were interrupted by its fault. – Pipe Makes Business Sense
Why did Russia decide to develop a pipe under the Baltic instead of
developing, as planned, a second line of the existing Yamal pipeline?
“Because it decided that it made business sense. Russia’s role as a
global gas exporter will be growing in the coming years. So why would
it need troublemaking middlemen? They circumvent them by laying down a
pipe under the Baltic. In my view, 75 percent of the decision was
motivated economically, and the remainder politically,” says Jakub
Siemek, head of the natural gas faculty at the Mining and
Metallurgical Academy in Krakow, in Gazeta Wyborcza..
What problems was Poland making? The fees for transit through Poland
are very low, and Poland has never fallen behind with its gas
payments.
“It is not about theft or similar problems that have occurred at times
in the other countries. The Russians decided to punish us for our
eastern policy, our lack of consent for the ?connector pipe’ that was
to connect the Belarussian and Slovakian gas systems while
circumventing Ukraine, and for the plans for developing a pipeline
from Norway.”
The “connector pipe” would make Kiev even more exposed to Russian
blackmail than it is today. Poland had to protest.
“Sure, but do we always have to be the first to protest? What have we
achieved? Now the Russians have circumvented not only Ukraine but also
us.”
Perhaps it wouldn’t have happened if the Norwegian project had gone
forward.
“That’s not so certain at all. There are no technical reasons for two
pipelines not to cross on the sea bottom. And the legal issues are
complicated.”
“Perhaps it was our plans for developing a pipe from Norway that were
the drop that overfilled the chalice for the Russians. They were
reacting with utmost irritation to any reports suggesting that the
Norwegian pipe would prevent them from developing a direct link
between Russia and Germany through the Baltic. They perceived such
suggestions almost as an attack against them. When the Norwegian
project was dumped, they decided to get even.”
The Baltic pipe will expose Poland to Russian blackmail.
“I wouldn’t see things in such bleak colours. Most of the gas
transported by the existing Yamal pipe will continue to be received by
other European countries. The Russians are pragmatic. They want to
keep selling gas to us.”
What can Poland do about the new pipe?
“Little. Perhaps there is a possibility of forking it somewhere in
Germany, from where gas could be transported to, for instance, the
Police chemical plan near the German border. But that’s all we can
do. We have no real influence over anything else.”
From: Emil Lazarian | Ararat NewsPress