Putin’s Priority Is Selling Gas, Not Waging War

Russia knows that a military invasion of Ukraine could scupper its Nord Stream 2 pipeline, which still awaits German regulatory approval.

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A Russian military build-up on the border with Ukraine and the continuing refugee crisis on the Belarus-Polish border, in which the Kremlin has sided with Belarus, once again raise a perennial question: What is President Vladimir Putin up to? Could some kind of kinetic Russian power play be in the cards?

Given the Kremlin’s long-standing opacity and the concentration of power in Putin’s hands, answering that question often feels like a mind-reading exercise. This time around, however, putting the Kremlin’s foreign policy goals in order of priority might help lighten observers’ hearts, at least temporarily.

The U.S. appears genuinelyworried about the possibility of a Russian attack on Ukraine. This concern is backed up by some credible analysis. Eugene Rumer and Andrew Weiss of the Carnegie Endowment recently published an article describing Ukraine as “Putin’s unfinished business” in the sense that he seeks “the restoration of Russia’s dominion over key parts of its historic empire. No item on that agenda is more important — or more pivotal — than the return of Ukraine to the fold.” Rumer and Weiss argue that Putin’s predictability is overrated, that he can act emotionally when provoked, that he feels the urge to cement his legacy as the restorer of Russian power and that the prerequisites for a strike on Ukraine — be it a limited one to make territorial gains in the country’s southeast or a full onslaught — are in place.

These are persuasive arguments. Putin does consider the Crimea annexation one of his proudest achievements, and his policies toward and pronouncements about both Ukraine and Belarus have never left much doubt that he would like to see them reunited as “one people.” The older Putin gets, the less time he has to accomplish this.

The official Russian policy is one of strategic patience — as ex-President Dmitry Medvedev recently wrote, “Russia knows how to wait. We are patient people.”  In Ukraine, this means waiting for successive anti-Russian governments to fail and for Ukrainians to become so disappointed with the lukewarm welcome they get from the European Union and the constant jerking around by flailing U.S. administrations that they’ll want back into Russia’s fold. The waiting involves periodic tactical shows of force — as it bides its time, Russia aims to prevent the military integration of Ukraine into the North Atlantic Treaty Organization, so any U.S. or NATO activity in the Black Sea or in Ukraine proper requires that Russia rattle its weapons in response.

In Belarus, strategic patience means waiting out Alexander Lukashenko’s desperate, idiosyncratic dictatorship while taking care the country doesn’t fall into the hands of the pro-Western opposition; the hope is that, post-Lukashenko, the careful application of economic and military pressure will complete Belarus’s transformation into a de-facto part of Russia under the two nations’ union state deal.

Putin, however, doesn’t appear to see a worthy successor among his closest allies, and he’s clearly written off the Medvedev experiment of 2008-2012 as a failure. That means the strategic patience may well be limited by his perception of his own physical shape; he may feel the urge to move before it’s too late for him personally. That kind of emotional pressure could conceivably distort Putin’s calculations of the cost of action.

And yet I’d argue that he doesn’t take the plunge now. Putin is focused on another foreign policy priority, namely his natural gas project, in itself no less important for his legacy than the putative reunification of the Soviet Union’s core Slav peoples. The new network of pipelines built under Putin — to Turkey, China and Germany — is meant to seal his regional alliances and keep open a German window on Europe. It’s also a key element of the Slavic unification play: The current Ukrainian and Belarussian governments have too much leverage on Russia as guarantors of its westward gas exports, leverage that would always tempt local politicians to seek more independence from Moscow.

The gas project takes precedence now because one of its key parts, the Nord Stream 2 pipeline to northeastern Germany, has been completed and  awaits German regulators’ green light to start pumping gas to customers. Nord Stream 2, of course, would be scuppered if Russia undertook a full-scale attack on Ukraine; a smaller-scale operation in eastern Ukraine would probably not end it outright, but deadlines would move again, painstakingly built relationships would weaken, the U.S. would gain time and persuasive arguments in its currently almost-abandoned battle against the Russian pipeline.

To make sure Nord Stream 2 starts operating next year and becomes difficult to replace as it gains European customers, Putin must play a complex game, combining pressure and threats with a seemingly constructive stance.

Putin’s response to the recent jump in European gas prices and the subsequent pleas that Russia alleviate the crisis was pointedly lukewarm. Nor was he eager to slap Lukashenko on the wrist when he threatened to cut off gas transit in response to European Union sanctions. Putin’s real purpose — to make Europeans aware that direct pipelines are the way to go — shone through in his response (which also contained an apocryphal version of a previous gas supply crisis involving Ukraine):
He can probably do it. That’s hardly a good thing, and I will talk to him about it, of course, unless he just said it emotionally. But we’ve had this happen before, with Ukraine. In 2008, if I remember correctly, we had this crisis where, because of endless arguments over the gas price and transit fees we failed to agree with our Ukrainian friends on the main parameters of these contracts. And Ukraine ended up blocking our gas meant for Europe. Simply, as the experts say, shut off the valve and stopped the supply of Russian gas to Europe. It did happen.
Lukashenko has long thrown caution and diplomacy to the wind; Europeans don’t see him as a rational actor, and neither, quite likely, does Putin — but the assist was just too good for the Russian leader to miss. To him, the border crisis and its consequences, the European gas market’s troubles, even the Ukraine-related tensions can all be arguments in favor of Nord Stream 2. It’s unclear to what extent he’s creating these arguments — there’s no doubt, however, that he uses them as best he can.
It may appear that Germany is becoming resistant to Putin’s brand of persuasion. On Nov. 16, the German Federal Network Agency, a regulator whose approval is necessary for Nord Stream 2 to operate, suspended the application. To the politically-minded, this might look like caretaker Chancellor Angela Merkel’s payback for the indignity of having had to call pariah Lukashenko, at Putin’s insistence, to attempt a resolution to the refugee crisis. Yet the German bureaucracy can be quite apolitical, and in this particular case, the reason for the suspension appears to be bureaucratic. The regulator wants the pipeline’s operator, now Swiss-registered, to transfer its assets and staff to Germany and incorporate under German law — a reasonable request of a pipeline with its endpoint in Germany.
It’s not that a German company would be difficult for Gazprom, the Russian gas supplier, to set up — but the suspension likely means a considerable delay, which explains the subsequent jump in spot natural gas prices. While the process runs its course, Putin needs to walk the thin line between keeping up the pressure and alienating the German government — and that means he will likely refrain from any abrupt moves in the coming months. In a way, he’s on the hook — at least as long as Nord Stream 2’s coming online remains a highly likely outcome.
Bloomberg
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