Friendship failure; A tale of a magical Russian pipeline.

[frigidmagi]

BBC Euroblog

[quote]The Friendship pipeline snakes all the way from Siberia to the largest oil refinery in Eastern Europe, in Lithuania.

But friendships can come to a sudden end.

The pipeline
The walls of the headquarters of the oil refinery are lined with black-and-white photographs of Soviet-era workers, looking suitably heroic, building the plant.

When Lithuania became an independent country 16 years ago, the oil kept flowing, the friendship kept going after a fashion.

Taps off

But when the Lithuanian government decided to privatise the plant, it chose to sell to a Polish company rather than Russia’s Gazprom, which was eager to purchase this window on the West - the modern equivalent of a warm-water port.

The refinery
According to the company’s PR department, the sale was announced in June, and by July the Russians had discovered that the pipeline was leaking.

The taps were turned off and have never been turned on again. Is this an example of Russian bullying, normal commercial practice, coincidence or accident?

The management here simply doesn’t want to speculate.

I was told before interviewing the Polish director of Mazeikiu Oil, that he wouldn’t talk politics, but he seemed to want to gloss over the last year altogether.

The company does still get Russian oil from a sea route and is also looking to South America, so when I ask him what happened, he told me: "We are trying to earn money in the current environment. It means we are searching for the best offer as far as supplies are concerned."

So I asked him again: "What happened to the other supply route? Did you turn up to work one day and it wasn’t working?"

He replied: "We are concentrating on the current situation and the current situation is that one route isn’t working, so we are concentrating on our other route which is available."

I persisted: "But did you turn up to work one day and the oil wasn’t coming in?"

He ignored the question and instead said: "Hopefully we have a connection to the sea, and that allows us to get suppliers from different sources."

Punishment?

This is perhaps what one expects from a company that is a minnow compared to the giant Gazprom, and one might have expected the same sort of evasion from the Lithuanian government, which is equally dwarfed by Russia’s might.

Not a bit of it.

Valdus AdamkusThe Lithuanian president, Valdas Adamkus, is an interesting man, who fought the Soviets when they invaded and then fled to America where he made a career in the US environmental protection agency.

In a state room where he once greeted both the Queen and President Bush, Mr Adamkus told me that he’s sure the switch-off was intended as punishment for selling to the Poles.

"I have no doubt about this. Let’s be honest, there is no need any more to cover up with nice diplomatic phrases," he said.

"At the very beginning it was definitely a very reasonable technical issue. We offered assistance from our specialists to repair it. No response. Formal letters came from the presidents, even came from the EU president Barroso, no response, total ignorance.

"Finally they have admitted that they don’t intend to deliver any more to Lithuania. I don’t believe that this is really fair dealing with their neighbours."

What is now known as "energy security" will be high on the agenda of the EU-Russia summit.

When Russia turned off the taps to Ukraine in the new year of 2006 the householders in the rest of Europe didn’t shiver for long, if at all.

But the politicians did... at the thought of a European Union that depends on Russia for half its gas and a third of its oil needs.

Free trade

The EU wants plenty of different supply routes from Russia and elsewhere and is beginning to see renewable energy as a strategic "must" as well as an environmental imperative.

But what they would really like is to be able to trust Russia, and not feel that Gazprom has them over a barrel.

The Lithuanian president, like most leaders of the ex-communist countries, wants a firm, single European policy towards Russia and wants to hear that voice raised at the summit.

"I believe the European Union, all the members, should speak with one voice, as far as the EU relationship with Russia is concerned. We still want to see Russia as a good neighbour, a co-operative neighbour," he says.

"We want to see Russia as a real participant in European affairs, because let’s face it, it’s a great country which has a lot of potential. It’s a country which needs to participate in European affairs, bringing stability to the entire European continent.

"But it should be dealt with strongly, clearly... If we are talking about free trade - and Russia definitely needs markets in Europe and around the world – if Russia wants to be in the World Trade Organisation, a fully-fledged market, I believe they have to play according to same rule that applies to everybody."

"Or else, what?" I ask.

"Or else if they want to be isolated from the rest of it, that’s their choice."

Nuclear deficit

At the end of my all-too-brief tour of Poland and two of the Baltic states, I sought out the Russian response.

The Russian ambassador to the European Union, Vladimir Chizhov, is also an interesting man, a former deputy foreign minister.

Chizhov (Picture: Telekanal Rossiya)His curly grey hair and broad smile give him an avuncular appearance but when you listen to his replies you see the steel that makes him a Kremlin favourite.

He says the EU-Russia relations are "complex, multi-faceted, not without problems". But he denies that Russia uses energy as a political tool.

"Well, it is totally untrue. We never cut off pipelines in order to punish anybody. When there is a rupture in the pipeline, yes, the supply has to be cut off to avoid environmental disaster.

"Pipelines have to be cut off when somebody’s not paying for the gas. It’s the same on a household basis, so whenever any of your viewers in Britain stops paying his or her bills for gas, British Gas will come and cut it off.

"That’s what’s been happening. I would say, on the contrary, as an example of politicising the energy business, I can give you a small example.

"Before the countries of Central and Eastern Europe joined the EU in 2004 and 2007, during the pre-accession talks, they were made to abandon the existing nuclear power stations, those that had been built by my country’s specialists during various years, for purely political reasons - not because all those reactors were Chernobyl-type, or too old. Actually, the oldest nuclear power reactors are those in Britain.

"So, as a result, starting from 2009, most countries of that particular part of Europe, will have to suffer for at least five to six years a deficit of energy. And as a result, the governments of those countries, applied to Russian suppliers of oil and gas for additional amounts, and Brussels begins crying wolf saying that the degree of dependence on Russians supplies is growing. It’s a situation created by the European Union itself."

Fish flour fuss

I asked him about the specific example of the Lithuania refinery. Why was oil not flowing through the Friendship pipeline?

"There was a series of ruptures in the pipeline along this 70km stretch. And since then the technological survey of the Russian Federation has been assessing the situation from a technical point of view, and also the owner of the pipeline, which is a Russian company, has been assessing the feasibility of restoring it.

"I’m not aware of the conclusions that they might reach eventually, this is still to come, but understandably, the company might have views on whether it is worthwhile to repair the pipeline or not.â€

[Batman]

I absolutely believe that Russia has better health and food standards than my home country does...in 1945. Currently? Yeah, right.
And let's face it a pipeline failing like that DOES come in incredibly handy. It may not be particularly honest, or fair, or any other of the behaviours you're SUPPOSED to abide by as a NOT evil nation but it DOES come in handy when you want to reap evil's benefits without it being extremely painfully obvious that you are.

And I honestly didn't know we were THAT dependant on russian oil.

[frigidmagi]

It seems Russia is becoming your Saudi Arabia. Trust when I say if the analogy holds true, Russia will swiftly become more trouble then it's worth.

[Norseman]

I have no idea what the Russian standards are. That said I'm perfectly willing to believe that they have two sets of standards: One very lax, which is almost never used; and one very harsh that they bring out when they want a bribe, or just an excuse to go "Nyet".

[Batman]

Um-given we're talking food and healthcare standards not only are those reasonably easy to check, the russians have little to gain by using double standards, at least within the context of negotiating oil sales.

[Norseman]

Um-given we're talking food and healthcare standards not only are those reasonably easy to check, the russians have little to gain by using double standards, at least within the context of negotiating oil sales.

Odds are that the rules that are on the books are fairly strict, but that no one follows them. This is not unusual! In fact that's fairly common in a lot of countries. The rules are only enforced when someone wants a bribe, or they want to make an example.

[Batman]

Um-we're talking food and health care standards. Those aren't enforced to begin with.