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21 February, 2013

Does Russian Democracy End Where the Gas Pipeline Begins?

And excellent orator and Ukrainophile, Russian opposition politician Boris Nemtsov claims that Ukraine's gas transit system is not that important as an element of the state's independence and energy security. He seems to forget, though, that it secures not only the transit but also the delivery of natural gas across Ukraine and has underground storage facilities that can be used to store imported gas, as well as that extracted domestically

Boris Nemtsov is an excellent orator. He is not just another street demagogue adept at throwing primitive slogans to the crowd. No, in his speeches he combines rational and emotional factor, extracts figures and facts from his memory at will and presses the hot buttons of the audience at the right time…

In a word, he is a master of the oratorical art. The only problem is that in Russia, where he has been a politician and businessman for over two decades, he found himself, soon after Vladimir Putin’s ascension to power, outside the State Duma, the executive government and, in fact, outside the circle of decision makers. Nemtsov is of course still very active: he is involved in writing analytical texts about the horrible sins of the Putin regime, speaks at rallies, works on the Coordination Committee of the Russian opposition, but still… The only opportunity for him to let rip before a truly significant audience and try to somehow influence political processes is to come to Kyiv as one of the key participants in the Shuster LIVE talk show.

On 15 February 2013, Nemtsov was, as always, a star in this popular TV programme, drawing applause on a number of occasions. He spoke about different things, but the thrust of his message boiled down to this: Ukraine should no longer hold on to its gas transportation system. It is time to get rid of this “rusty pipeline”, because no-one will even pay a red cent for it very soon, and Ukrainian delegations will be trying in vain to persuade Gazprom to buy it for almost nothing.

READ ALSO: Gazprom’s Nightmare

Before departing Kyiv, Nemtsov wrote in his blog the same things he told Ukrainian politicians and average viewers: “To many Ukrainians, the gas pipeline is a symbol of independence and sovereignty. A kind of sacral phallic symbol, albeit lying. In my view, this notion of the role of the gas pipeline is hopelessly out of date. The symbols of Ukraine’s independence, including in the energy sector, could be oil derricks and gas flare stacks, but there are too few of them in Ukraine. However, there is a serous prospect that Ukraine’s pipeline may turn into a heap of scrap metal. First, because Russian gas exports to Europe are dropping and soon there will be nothing left to pump. They are dropping because Gazprom is overcharging Europeans. So they prefer to buy Qatari and Norwegian gas. Second, Putin is threatening to build South Stream (a paranoidal idea: exports are falling, and we are building new pipelines), and then gas flows will circumvent Ukraine. So this symbol of state sovereignty may turn into a pile of rusty metal, something that would be good to avoid. I think that in this situation the idea of creating a gas transportation consortium involving Russia, Ukraine and perhaps Europe is quite healthy. Then there is a chance that Putin will not have to build South Stream and the gas wars with Ukraine will stop.”

At first blush, this all makes sense. True, Russian gas exports through Ukraine are constantly falling. Upgrading Ukraine’s gas transportation system indeed requires serious investments. True, Western Europe is buying increasing volumes of gas from sources other than Russia, and in 10 years or so it may reduce purchases of Russian energy resources to an insignificant level.

However, Ukraine’s gas transportation system secures not only the transit but also the delivery of natural gas across Ukraine, including in the reverse direction, if necessary, i.e., from west to east, rather than from east to west. Second, part of this system is a network of underground gas storage facilities that are unique in size and location. These have strategic importance for both domestic needs and export. Moreover, these facilities could be used to store not only Russian or Turkmen gas but also shale gas, which Ukraine plans to extract. Ukraine has Europe’s second largest gas storage facilities (after Russia) and can store around 35bn cu m of gas per season. Seven such facilities, i.e., more than half of those currently in use, have an active storage capacity of 2bn cu m or more.

READ ALSO: Russia’s Soft Power Wars

The Western Ukrainian Gas Storage Complex, Ukraine’s biggest, is located in an area crossed by several major gas pipelines and was built to secure the reliable transit of Russian or Central Asian gas to Western European and Balkan countries, to supply gas to western oblasts of Ukraine and adjacent Moldovan and Belarusian regions. Experts say that its high storage capacity creates extremely flexible conditions for directing gas flows to local and distant consumers, which makes it possible to optimize the operation of other storage facilities and build operational and strategic gas reserves, which is highly important in today's complex situation. It was the availability of these storage facilities that allowed Ukraine to hold out in the cold month of January 2009 after Gazprom cut its gas deliveries on a command from Putin. What if these facilities had been under Russian or even international control back then?

And now Nemtsov, a well-known Russian democrat and an almost notarized Ukrainophile, tells many millions of people who watch Shuster LIVE that Ukraine does not need its “rusty pipeline”. He fails to mention that it is linked to a powerful system of gas storage facilities, something Ukraine needs as much as Russia (Russian gas storage facilities are located far away, so in case of emergency only the Western Ukrainian complex can be used to quickly increase the supply of gas to Western Europe and the Balkan region). Ukraine needs this system both today and in the future, if it turns from a gas importer into a gas-exporting country. Interesting, isn’t it?

Volodymyr Vynnychenko noted almost a century ago that Russian democracy ends where the Ukrainian question begins. Is this statement, slightly reformulated to reflect contemporary conditions, still true: Russian democracy ends where Ukraine’s gas pipeline begins?

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