Prepare for Russian tanks to crawl into Ukraine — and cut Europe’s energy

Wednesday’s forecast for the Ukrainian capital, Kyiv, is dry weather to start, with showers in the evening. Rain will become steady as Thursday progresses. In terms of politics, the forecast is less certain but trending toward bad. A Russian invasion is predicted and tanks advancing from the Belarus border could reach Kyiv within a few hours. The distance they’ll need to cover is fewer than 50 miles.

According to “informed” speculation in the Western media, a Russian military action probably will be accompanied by a range of tactics to confuse Ukraine’s government and its allies.  Assassinations, false flag operations, information warfare — you name it. Add to that list the latest news: that some Russian military units have completed their exercises near the border and are pulling back. It won’t be so much the fog of war than the muddle of war, which will be hard enough to decipher for the participants, never mind most of the rest of us who will be watching from long-range and, we hope, safety.

A key ingredient in the mix will be energy disruption. Within Ukraine, widespread power cuts can be expected, either because of sabotage or caution, pre-empting likely transmission failures.  Further afield, in central and Eastern Europe, electricity supplies are very vulnerable. Russian natural gas, which usually accounts for 40 percent of Europe’s gas use, comes via several pipelines but two of the most significant pass through Ukraine. Germany, Poland and Hungary each are more than 50 percent dependent on gas imports from Russia. Austria, Finland and Lithuania are 100 percent dependent.

Shutting off the flow of Russian gas would be an obvious political weapon to test the steadfastness of Europe’s united approach to such Russian aggression. And, in all likelihood, Moscow would claim overriding technical reasons, rather than anything as blatant as breaking a contract. After all, Russia denies any aggressive intent toward Ukraine and says that there has been no military buildup, or it is only the usual annual spring exercises. “It’s not us; it is the Americans who appear to have offensive intentions,” has been the refrain.

The good news is that if the worst-case scenario becomes the reality, yes, there will be energy disruption and even chaos. But the energy arithmetic may be trending in our favor. In today’s Wall Street Journal, energy guru Daniel Yergin writes that American natural gas exports, in the highly-cooled liquefied natural gas (LNG) form, actually exceeded Russian exports to Europe in January. This wasn’t deliberate politics but, rather, because American suppliers spotted a favorable pricing opportunity to turn a profit.

American LNG is an export product. Within the U.S., natural gas flows to customers via pipelines. But the fact that there is surplus natural gas, as well as oil, reflects the production of such fuels from shale. Like so many other things, these days the very term — shale gas — is politically contentious in America, but a dose of cold-war-turning-hot reality may shift public perceptions.

But this is no time to be complacent. There are other moving parts that need to be tweaked. Gulf gas producer Qatar will need to redirect some LNG tanker loads to Europe, for which it wants Washington to use its diplomatic clout with regular customers who will be asked to wait longer for their gas. Oil production, a separate but overlapping source of energy, needs to be ramped up in places that have spare capacity — meaning Saudi Arabia and, to a lesser extent, the United Arab Emirates. They will have to break OPEC agreements, as well as OPEC+ agreements with Russia, but with oil just a short sprint away from the magical $100 per barrel figure, any complaints will sound hollow.

Key to the future is getting Russia President Vladimir Putin to see reason. That could be a major challenge. One wonders whether any of his advisers have counseled him about the impact on his reputation gained by sitting at one end of a very long table from his interlocutor, whether it be President Emmanuel Macron of France or his own foreign minister, Sergey Lavrov. It is taking social distancing to ridiculous levels.

The trouble with predicting the future path of this crisis, as well as its outcome, is that so much depends on different clocks. In the not-so-long term, an energy crunch may be painful but survivable. But in the short term, those tanks could be crawling westward.

Simon Henderson is the Baker Fellow and director of the Bernstein Program on Gulf and Energy Policy at the Washington Institute for Near East Policy. Follow him on Twitter @shendersongulf.