Gas looms large as Scholz meets Putin
Vladimir Putin has said he “does not want war in Europe” despite NATO saying there is no sign of Russian “de-escalation on the ground” in Ukraine.
The Russian President made the remarks during his meeting with Olaf Scholz, Germany’s chancellor, who became the latest European leader to take a seat at the Kremlin’s outlandishly long conference table today, in yet another attempt to prevent a Russian invasion.
Moscow has hailed the return to base of some units, although Western officials have said that further Russian reinforcements are heading for the border.
During the press conference following the talks, Scholz warned that territorial integrity of Ukraine is “non-negotiable” and a Russian invasion will result in hard sanctions.
Putin responded by insisting that he does not want war but the West has failed to provide any constructive responses to Russia’s demands.
The elephant in the room was that Germany is Russia’s single biggest customer for gas in Europe.
In recent weeks, Scholz has been criticised by Washington for his refusal to state plainly that a Russian invasion of Ukraine would mean a permanent end to the Nord Stream 2 pipeline project.
While Nord Stream 2 – the Russian pipeline bringing gas to the continent via Germany – has already been built, it requires German regulatory approval to become operational. If approved, it would double Moscow’s gas exports to Germany and pump 55 billion cubic meters of natural gas to Europe every year.
When asked about Nord Stream 2 following today’s talks, Scholz was once again vague, saying only that he was intent on ensuring a confrontation in Ukraine did not occur and that war would have “far-reaching consequences”.
Critics of Nord Stream 2 warn that deepening Europe’s reliance on Russia for energy is extremely foolish. Yet in the short-term, halting the project could be painful.
This pipeline would carry enough natural gas from Russia to fuel roughly 26 million households in Europe, so it would go a long way to solving the current gas shortages.
Terminating the pipeline would likely further drive up energy prices and deepen the cost of living crisis, as would Russia turning off the gas taps in response to Western sanctions.
In Britain, it could intensify Tory divisions on energy policy and threaten the UK’s commitment to net zero.
Boris Johnson is already coming under pressure from a growing number of MPs within his party to approve further exploitation of the UK’s oil and gas reserves in the North Sea and to lift the 2019 fracking ban. US approval of fracking is thought to be a key reason why the country has been relatively unscathed by the current energy crisis.
But the Tory peer, Zac Goldsmith, has urged the PM not to abandon his climate goals. Fracking, Goldsmith reminds him, is not just opposed by environmental activists, it’s actually an incredibly unpopular policy with the British public in general. The latest BEIS attitude tracker reveals just 18% support it, compared with 76% in favour of onshore wind.
So the PM faces a dilemma. While he certainly has some bridges to build with the general public, a politically weakened Johnson is also under pressure to appease the net zero-sceptic MPs within his own ranks. War in Ukraine will only complicate the problem.
