Tracing The Scent Of Cuan's Crumbs In The Russia-Ukraine Feud, Says Arcandra Tahar

Russian President Vladimir Putin (Photo: Twitter @kremlinrussia_e)

JAKARTA – The escalation of tensions in Eastern Europe between Russia and Ukraine is increasingly peaking. The two thousand countries are still reluctant to reduce the crisis tension. This condition no doubt caused widespread concern, especially in Europe, if it was true that a bullet was fired from its shell.

Despite the existing political intrigue, what Russia and Ukraine actually show is nothing more than their efforts to secure economic interests. This was clearly seen by the Deputy Minister of Energy and Mineral Resources (ESDM) for the 2016-2019 period Arcandra Tahar.

“Currently, the political crisis between Russia and Ukraine has caught the world's attention. The dispute, which initially involved two countries, has the potential to become a multidimensional and multi-country crisis. One dimension that we must be aware of is the worsening of the energy crisis in Europe that is currently happening. Why did it happen?" he said via the Instagram page @arcandra.tahar on Tuesday, February 8.

According to him, in the last ten years, Europe has needed natural gas of around 17 TCF (trillion cubic feet) per year. Of this amount, a third is met from pipeline gas originating from Russia and the rest comes from LNG imports and production from European countries such as Norway and the Netherlands.

He said, due to changes in the strategy of European energy companies such as Shell, BP and Equinor, which switched to the renewable energy business, natural gas production from Europe was reduced. As a result, LNG imports are increasing and dependence on piped gas from Russia is inevitable. On the other hand, renewable energy, which is expected to replace fossil energy, has not shown its best performance.

“Why can the conflict between Russia and Ukraine exacerbate the energy crisis in Europe? Because more than a quarter (25 percent) of Russian gas pipelines pass through Ukraine, the rest through Belarus, Poland and also through the Baltic sea. With the pipeline passing through Ukraine, Russia will use it to push back against Western European countries if international sanctions are imposed on Russia," he said.

In Arcandra's study, there are several scenarios that Russia might run. First, the gas pipeline that has been contracted to flow to Western Europe will be stopped by Russia on the grounds that pipeline security is not guaranteed in the conflicted territory of Ukraine.

"This is a smart strategy from a business point of view because Russia can avoid a penalty for breach of contract by not supplying gas to Western Europe," he stressed.

The second scenario, Russia may deliberately refuse to supply all of its gas to Western Europe as a form of resistance to retaliate against international sanctions against its country. Arcandra thinks that Russia can still supply some of its gas via the smaller Belarusian and Polish pipelines. These two scenarios can be used to see how Russia responds to the conflict with Ukraine.

"If the first scenario is implemented, it means that Russia is still honoring the gas distribution contract that has been agreed but cannot be implemented due to security factors. Russia looks professional in this regard and a conflict resolution may come to an end," he said

"If the second scenario is implemented, Russia will look emotional and conflict resolution will be difficult. Of course, Russia will also calculate that the second scenario will result in the anger of Western European countries because they do not get the natural gas they really need in winter," said Arcandra.

Unfortunately, these two scenarios have almost the same destructive power on the economies of Western European countries.

“How can I not, with winter still going on in the next few months, Europe is only able to survive for 6 weeks with available LNG reserves. In this case Russia will feel the upper hand," he explained.