Europe Warned by Reagan Administration Not to Rely on Russian Energy

Few were shocked when the United Kingdom and Germany did not agree to sanctions against Russia because they receive oil and natural gas from the country. These actions were foreshadowed in a CIA memo to President Ronald Reagan on July 9, 1981.

Although construction of the proposed pipeline would have a substantial impact on the Soviet economy and military potential, it would have little effect on Western Europe’s economies but would make Western Europe somewhat more vulnerable to Soviet political pressure.

Specifically, purchases of Soviet gas through the pipeline:

Would not be needed to cover increased energy demand;

Would add to the problem, not to the solution, of energy supply security;

Would probably be an expensive source of energy…

Russia came under severe criticism and backlash from the west and the European Union after it moved forces into Crimea, an autonomous republic of Ukraine. America and the EU threatened diplomatic and economic sanctions against Russia, but the UK and Germany backed off. Both countries rely heavily on Russia for their energy needs.

Although in most likely circumstances Moscow would be loath to use its gas as a blunt weapon to pressure Western Europe, because it needs the gas revenue badly, it would be able to exert subtle political pressure.

The pipeline was built, and now Russia is leveraging its “subtle political pressure.” The main part of the pipeline travels through Ukraine. In 2010, Russia was the EU’s prime importer of hard coal, crude oil, and natural gas. Putin holds all the cards, and because of Europe’s reliance on Russia’s energy, it cannot do much to protect Ukraine’s sovereignty.

Russia turned off natural gas shipments to Ukraine in 2006 and 2009 because of price disputes. There were shortages in the EU, which caused a slight panic. Some nations sought to lessen their dependency on Russia; France managed to cut a few ties, but Germany and the UK are stuck.

Russia’s energy superpower status is rooted in the state-owned Gazprom, the world’s largest extractor of natural gas, which accounted for 8 percent of the country’s gross domestic product in 2011.

In addition to providing the Russian Federation with steady income, Gazprom’s monopoly over former Soviet republics and much of Europe has enabled Mr. Putin to use energy to hold opponents hostage.

America is taking a few steps to show Russia it is serious. On March 3rd, the US stopped all trade and investment talks and military engagements with Russia due to Russia’s aggression against Ukraine. The government implemented visa restrictions on Russians and Crimeans who are a threat to Ukraine. The names of the people affected have not been released.

Crimea’s parliament formally asked to join the Russian Federation on Thursday. If Putin accepts the proposal they will hold a referendum on March 16th.