Energy extortion from Poland and Bulgaria by Russia

Pipes are seen at the Rembelszczyzna gas transmission point near Warsaw on April 27.


Photo:

janek skarzynski/Agence France-Presse/Getty Images

An attack on one NATO ally is an attack on all, and that’s how Europe and the United States should treat Russia’s decision this week to stop supplying natural gas to Poland and Bulgaria. With enough allied coordination, this could boomerang Vladimir Putin.

The Kremlin is extorting Europe by demanding that “unfriendly” countries pay for gas in rubles rather than euros or dollars as required by their contracts with Gazprom. European companies have been ordered to open two accounts at Gazprombank to enable currency conversion. Countries that refuse, such as Bulgaria and Poland, risk a gas cut.

“The Russian side’s request to pay in rubles is a unilateral decision and not in accordance with contracts,” European Commission President Ursula von der Leyen said. “Companies with such contracts should not accede to Russian requirements. This would be a violation of Russian sanctions. Mr Putin hopes to erode Western sanctions, drive up the ruble and divide Europe.

This may be a tactical error. Europe cannot replace overnight the approximately 40% of its gas that it imports from Russia. But Mr Putin’s extortion should strengthen Europe’s resolve to reduce its reliance on Russian fuel. Poland shows that it can be done sooner than many think.

The Poles saw how Mr. Putin had repeatedly weaponized natural gas against Ukraine and prepared by building a large liquefied natural gas import terminal on the Baltic Sea. Poland plans to open a gas pipeline to the Lithuanian LNG terminal next week. Another pipeline carrying gas from Norway to Poland is expected to be completed this fall.

Poland said it planned to let its contract with Gazprom expire later this year anyway. Other countries are more vulnerable to Mr. Putin’s blackmail, but they have short-term alternatives. Bulgaria imports around 90% of its gas from Russia, but can get more from Turkey and Greece in no time. Italy has reached an agreement to import more gas from Algeria.

Germany has rushed to reduce its dependence on Russian gas, which now accounts for 35% of imports, down from 55% last year. Luckily for Germany, wind power is strong in the spring and power plants can switch to burning coal. Mr Putin’s scheme is an incentive for Chancellor Olaf Scholz to reverse the withdrawal of Germany’s last nuclear power plants this year.

Mr. Putin wants to increase the costs for Europe to arm Ukraine and sanction Russia. Wholesale gas prices in Europe rose 20% on Wednesday morning and are more than six times higher than a year ago. If Mr. Putin cuts gas to other European countries, the continent could fall into recession.

But cutting exports would also hurt Russia, as fuel sales fund its war machine and almost half of its budget. Mr Putin has few other places to send his gas, so drilling rigs are expected to be dismantled soon and wells sealed. This could cause longer-term damage to Russian gas production.

Mr. Putin continues to underestimate European solidarity and determination. He may think that his threats will erode the sanctions, but perhaps the opposite is happening. Bloomberg reported on Wednesday that German officials were prepared to back a phased ban on Russian oil imports to the European Union.

The Biden administration could support the Europeans by imposing secondary sanctions on companies that help finance Russia’s oil trade so that Mr Putin cannot easily offload his crude to China and India. It should also move heaven and earth to accelerate US oil and gas production and exports to Europe.

Mr. Biden is doing the opposite. Last week, the administration reaffirmed its support for a leasing ban on public lands and imposed new permitting rules that will make it much more difficult to build pipelines and LNG export terminals. This week, he canceled a Trump plan to open Alaska’s National Petroleum Reserve to more drilling. Mr Putin must be smiling.

Russia’s war on Ukraine has awakened Europeans from their energy illusions, but Mr. Biden is still sleeping. It’s time to wake up, sir.

Newspaper editorial report: Paul Gigot interviews Kremlin financier and chief critic Bill Browder. Images: Shutterstock/AFP/Getty Images Composition: Mark Kelly

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