skip to primary navigationskip to content

Nick Butler FT blog report on Forum on Geopolitics 'Nightmare Lecture': 'The Big Freeze'

last modified Mar 29, 2016 07:55 PM

Prof Nick Butler (KCL) has posted the below Financial Times Blog report on the 14 March Forum on Geopolitics 'Nightmare Series' lecture at Corpus Christi College, Cambridge.

The original can be found at

This event was kindly sponsored by Absolute Strategy Research.



Russia locks on gas supplies to Ukraine

Is Europe trapped in a state of dependence on Russian gas? What would
happen if by some accident, let alone a strategic decision taken in
Moscow, the gas stopped coming. Would eastern Europe grind to a halt,
and would the west, led by Germany, sue for peace on any terms ?

This was the core topic for debate last week at a seminar organised by
the Geopolitics Forum at Corpus Christi College in Cambridge [4] as part
of their series on nightmare scenarios. With wide participation from
within the university and beyond, we were able to go beyond the
headlines to build an analysis based on facts. It is worth setting out a
few of those facts.

* First, dependence is at the very least mutual and if anything in a
buyers' market power it is skewed to the importing nations. Russia
supplies about 30 per cent of Europe's gas needs and 60 per cent of
its imports. Those are serious numbers but they are dwarfed by the 90
per cent dependence of Russia on Europe as a buyer of its gas.

* Second, Russian gas is now the swing supplier. European gas demand
has been falling and although flat in 2015 is it 20 per cent below the
level reached 10 years ago. All that decline has fallen on the shoulders
of Gazprom and explains why the company has around 100bn cubic metres of
stranded gas — developed but not producing in the Bovanekovo field in
the Yamal peninsula of west Siberia.

* Third, several countries in eastern Europe are indeed 100 per cent
dependent on Russian supplies of gas. But that does not mean that their
economies would collapse if the gas supplies were cut off for whatever
reason. Gas in each case is a small percentage of national energy
consumption, probably reflecting a desire to avoid such a risk.
Europe's main importer of gas is Germany – a country well able to
replace the gas either through imports from elsewhere or by increasing
its use of coal. A cut off of gas to Germany would be a problem – but
a problem easily and quickly solved.

* The fourth factual point reinforces the story on the true direction
of dependence. The much touted pivot to the east with President Vladimir
Putin's theatrical visits to China to sign vast deals has come to very
little. A detailed and expert analysis [5] from the Oxford Energy
Insitute shows that neither the volumes nor the price of such trade has
been agreed. Indeed, even the route — whether via the Power of Siberia
line from east Siberia to north-east China or the alternative line from
west Siberia to Xiangjing in western China has not been agreed. In a
buyers' market there are no doubt a host of countries – led perhaps
by Iran – offering long-term gas supplies to China at very attractive
prices. It is hard to see Russia earning any revenue from sales of gas
to China before 2025. Until then, and perhaps for a long time
afterwards, Russia will remain dependent on the European market to
maintain its export revenue and to keep the 373,000 people who are
employed by Gazprom in work.

Gas, then, is not a weapon the Russians can use lightly, if at all, and
it is perhaps not surprising that since 1968, when the gas trade began,
supplies to Europe have never been interrupted despite numerous periods
of tension — such as the invasion of Afghanistan in 1979 and the
turmoil around the break-up of the Soviet Union in 1991. Supplies to
Ukraine have, of course, been interrupted on two occasions but that has
more to do with the lack of payment for the gas than anything else.

What Russia would like is a secure market for its gas — a guaranteed
volume of sales at a stable price. Mr Putin has said as much in the

The fact that the situation in the market is one of interdependence does
not remove the concerns about Russian intentions or about the extent to
which Moscow has destabilised the economy of Ukraine to the point where
a serious exodus of people to neighbouring European states cannot be
ruled out. Given the failure of the EU to manage the problems of
migration from Syria, the prospect of an influx of hundreds of thousands
of desperate Ukrainians is indeed a nightmare scenario. In such
circumstances, Europe led by Germany might indeed sue for peace, or at
least stability with Ukraine neutralised and Russia promised a protected
share of the European gas business.

But the nightmare scenario is not the only possible outcome of the
current situation. The reality is that Russia needs the European energy
market more than Europe needs Russian gas. In the end, if Mr Putin wants
to stay in power he will have to pay attention to his country's
deteriorating economy. Perhaps from its position of relative strength
Europe could then negotiate a deal which traded a part of what Moscow
wants — for instance access to a part of the gas market on competitive
terms – for a new and improved relationship across the security

Nightmares are often based on false fears and perhaps as one participant
at last week's seminar said Russia will one day become a normal
country. Perhaps, although given Russia's behaviour in Turkey over the
last few months — where gas prices have been hiked and supply
contracts broken — simply to punish the Turks for their behaviour in
relation to Syria normality and the trust which goes with it, that still
seems a long way off.


RSS Feed Latest news

A Westphalia For the Middle East: Workshop Report

May 21, 2019

WESTPHALIA FOR THE MIDDLE EAST Workshop Report: Lessons in Diplomatic Techniques and Peacemaking Mechanisms from the Congress of Westphalia for the Middle East Pembroke College, Cambridge, 16 May 2019

Forum on Geopolitics merges with the Centre for Rising Powers!

Apr 05, 2019

Two part event on March 11th marking the merger of Forum on Geopolitics and Centre for Rising Powers included a round table discussion on China programmes in UK academia and public lecture on Rise of China's comprehensive.

Technology and Democracy: A Nightmare?

Mar 19, 2019

The Forum on Geopolitics was pleased to host a Nightmare Lecture focusing on technology and democracy in Magdalene College with the generous support of Absolute Strategy Research.

COGGS hosts Prof. Carlo Scognamiglio Pasini for 2019 Cook Lecture

Feb 18, 2019

Forum on Geopolitics was pleased to welcome Prof. Carlo Scognamiglio Pasini, Professor Emeritus in Applied Economics and former chancellor of the Luiss University of Rome, and former President of the Italian Senate and Minister of Defense to give second of its annual Cook Lecture at Corpus Christi’s McCrum Lecture Theatre.

View all news