A European Energy Union as a Path to Peace Between Ukraine and Russia

Image: DutchScenery via iStock

What would have been the potential benefits for Russia, if its attack on Ukraine in February 2022 had been a success? By asking this question, Jürgen Klute takes a different look at the causes of the war to imagine possible ways to end the conflict peacefully and in the long term.

There is much speculation in public debates about Vladimir Putin’s Great Russian fantasies. I will not deny that he carries such in his head. But I doubt that such fantasies are enough to start a war.

In my view, these are rather the usual narratives that warlords use to make their activities palatable to those who are supposed to risk their health and their lives in the interest of the warlord.

Does Putin want more than to just “take back” Russian territory?

What would Putin have gained if his invasion of Ukraine had succeeded? Or, to put it another way, can we identify tangible and more future-oriented interests of Putin or the Russian government in Ukraine alongside the Great Russian fantasies?

First of all, it should be noted that Ukraine was the world’s fifth largest exporter of wheat before the Russian invasion. In addition, the country exports other foodstuffs such as sunflower seeds and sunflower oil. Russia was the world’s largest exporter of wheat before the invasion. Together, Russia and Ukraine account for about 28 % of the world’s wheat exports.

The main buyers of Russian wheat are Egypt (about 31 %) and Turkey (about 17 %). Smaller quantities go to Nigeria, Senegal, Sudan, United Arab Emirates and Yemen. The main buyers of Ukrainian wheat are Egypt (22 %) and Indonesia (approx. 19 %). But Ukraine also supplies wheat to Turkey (6.3 %) and smaller quantities to Israel, Morocco and Tunisia.

Whoever controls Ukraine naturally also controls Ukrainian agriculture. The global importance of Ukrainian grain production became obvious to a broad range of people in the course of last year, given the temporary boycott of grain shipments from Ukrainian ports. With a takeover of Ukrainian agriculture, Russia would have significantly expanded its role as the world’s largest grain producer and exporter. Russia alone would then have controlled about 28% of the world’s wheat exports – worldwide, wheat is considered the most important of all staple foods. Russia would not only have gained an additional source of income; as by far the largest grain exporter, Russia would also have secured a decisive influence on how much grain is delivered where and at what price. Russia’s political influence at the global level would thus have increased noticeably. Political power does not arise from military strength alone, but also (in addition to industrial production and the performance of science and research) also from the control of food production and distribution.

Far less widely discussed are the raw material deposits in Ukraine. This is not only about the known coal deposits in the Ukrainian region of Donbass. As was discovered only a few years ago, Ukraine has the second largest natural gas reserves in Europe in the eastern part of the country. This makes Ukraine a potential competitor for Russia as an important gas supplier for Europe.

However, there are far more interesting raw material deposits in Ukraine, some of which have not yet been tapped, but which are of great importance for an energy transition. The Washington Post points this out in its article In the Ukraine war, a battle for the nation’s mineral and energy wealth”. Authors Anthony Faiola and Dalton Bennett write: “The Kremlin is robbing this nation [author’s note: Ukraine] of the building blocks of its economy – its natural resources.” A few lines further on, the authors state that Ukraine’s titanium and iron ore reserves, undeveloped lithium fields and huge coal deposits (among the world’s largest) are together worth several trillion dollars. According to the authors, by the summer of 2022, Russia would already have controlled 63 per cent of Ukraine’s coal reserves, 11 per cent of its oil reserves, 20 per cent of its natural gas reserves, 42 per cent of its metals and 33 per cent of its deposits of rare earths and other important minerals, including lithium. The Russian invasion of Ukraine therefore had a direct impact on the security of Europe’s energy supply. This affects not only the current energy supply, but also future climate-friendly energy production, which relies on minerals such as lithium and other so-called rare earth elements. Moreover, as a result of the war, plans by Western mining companies to develop such deposits have been halted, as Faiola and Bennett further report.

Is Russia’s war against Ukraine a war about the energy transition?

Would Russia be so interested in accessing these agricultural and mining resources in Ukraine that it would start a war against its neighbouring country? In my opinion, the core of the answer lies on the one hand in the structure of the Russian economy, which is based on extractivism, i. e. the export of agricultural products and mineral resources, and on the other hand in the energy transition promoted by the EU: it is depriving the Russian economy of its basis. Russia is the world’s largest exporter of fossil fuels. In an interview with taz last April, the Russian energy expert Mikhail Krutichin estimated that 60 per cent of the total income of the Russian economy and about 1/3 of the state budget are made up by Russia’s export of oil and gas which illustrates just how dependent Russia is on these exports. A rapid EU-wide or global phase-out of fossil energy production would therefore have extremely far-reaching economic consequences for Russia.

Stefan Schultz had already discussed the question of what geopolitical and economic effects the energy transition is likely to have in a detailed Spiegel article in September 2019. According to his assessment, the energy transition will profoundly change previous geopolitical and global economic structures. This applies not only to Russia, but to all countries whose economy is mainly based on the export of fossil fuels.

This assessment has surprisingly received only very limited attention so far. Nevertheless, on 14 October 2021, an article was published on the website of Deutschlandfunk asking whether the reduction of Russian gas deliveries to Europe at that time could be an attempt to counteract the EU energy transition.

A few days after this article, the Spiegel published an interview with the Russian energy expert Mikhail Krutichin who was also referred to in the DF article. In this interview, Krutichin once again emphasised more clearly the Russian government’s critical view of the EU’s energy transition and Putin’s intention to force the EU to postpone the switch to renewable energy by blackmailing it (stopping gas deliveries).

In the meantime, the Intergovernmental Panel on Climate Change (IPCC) declared that, according to the latest studies, decarbonisation must be accomplished even faster than previously assumed in order to meet the 1.5-degree target of the Paris Climate Agreement. According to these studies, CO2 emissions must be halved already by 2030. A news item from the Austrian newspaper Der Standard of 08.02.2023 supports this gloomy insight. According to it, during the last interglacial period the global average temperatures were “only” between 0.5 and 1.5 degrees Celsius higher than in the time before the Industrial Revolution, and yet the entire Arctic ice cap apparently melted completely even at these lower levels of climate warming. The findings of climate research agree that the decarbonisation of the global economy must be accelerated significantly in order to keep global warming at a level that is bearable for humans.

This increases the pressure for change once again on those states whose economies are essentially based on the exploitation of fossil fuels. At least the German Foreign Ministry has meanwhile taken notice of the problem and, pending the Russian invasion of Ukraine, has offered Russia cooperation in the production and supply of hydrogen to save it from economic collapse and open up new prospects for the country’s future after fossil fuels.

A “pacification through wealth transfer” seems unrealistic in the case of Russia

Seen in this light, Russia’s war against Ukraine can also be interpreted as a war over energy transition. Political scientist Heribert Münkler indirectly supports this thesis. In his article „Von Putin bis Erdoğan: Wie pazifiziert man die Revisionisten? Die Rückkehr der Geopolitik nach Europa“ (“From Putin to Erdoğan: How to pacify the revisionists. The Return of Geopolitics to Europe”; published in the January 2023 issue of Blätter für deutsche und internationale Politik), he explores the question of how to deal politically with authoritarian systems in order to avoid armed conflict as far as possible. Münkler presents three solution strategies, the first of which is relevant for our context: pacification through wealth transfer. Münkler’s starting point is that the entire Black Sea region is a crisis region. He sees the main cause in the disintegration of the Russian Tsarist Empire and the Ottoman Empire at the end of the First World War. According to Münkler, one way to reduce the social tensions resulting from the loss of former greatness, importance and prosperity and from the retrospective view of the vanished “golden” times is to integrate the successor societies through transfer of wealth and participation in economic development in such a way that the memories of the “great past” are eclipsed by current prosperity.

A few lines further on, Münkler explains: “The complementary function to wealth transfers is economic interdependence. Therefore, it was obvious to pacify Russia as the great potentially revisionist actor by buying its energy sources and raw materials which can be transported via pipelines in a cheaper and more ecologically sustainable way than via other transport routes. In return, Russia receives advanced technologies, which in addition enables a transfer of wealth to Russia.

It is obvious that the EU energy transition will shake the very foundations of this concept of “pacification through wealth transfer” on a fossil basis, which Münkler describes and which has been successfully applied over several decades. In addition, today’s Russia does not have a highly developed economy through which larger parts of society could have participated in the transfer of wealth. Instead, a small economic elite has appropriated the transfer of wealth. A short-term transformation of the Russian economy, as required by a rapid phase-out of fossil energy production in line with climate policy, is unrealistic.

To make matters worse, Russia currently dominates the Russian Federation and uses its military strength to keep conflict hotspots under control and is also militarily active (at least indirectly) in Syria and Africa. The Russian energy expert Krutichin, quoted above, points out that around one third of Russian state revenues are generated from the export of fossil fuels. A collapse of these revenues as a result of a rapid exit from fossil energy production would therefore also have far-reaching negative consequences for Russia’s political and military activities.

Against this background, the incorporation of Ukraine into the Russian state can also be understood as an attempt to compensate for the losses from the consequences of the EU energy transition. Securing control over mineral resources relevant to the energy transition provides new sources of income on the one hand and on the other hand also influence on the implementation, organisation and even delay of the energy transition. In addition, Ukraine could also be considered as a producer of green hydrogen due to its sunny regions.

A European Energy Union as a possible perspective for lasting peace

However, energy transition and global warming could also be a key to finding a way out of the current war. A distinction must be made between the ambitious short-term question of how to end the current hostilities and the medium-term question of a European peace perspective. Here, the focus is on the longer-term perspective.

The Russian war against Ukraine is currently pushing global warming into the background while the war is further fuelling global warming. Nevertheless, global warming remains the most pressing problem we face. It knows no national borders. Therefore, it can only be stopped if we succeed in transcending existing national borders and conflicts to halt global warming together.

A lasting peace between Russia and Ukraine, but also a pacification of the wider region around the Black Sea all the way to the Middle East, requires an attractive and realistic perspective. A European Energy Union could be such a perspective. It would be more comprehensive than the European Union, but of much less political integration than the EU. On the one hand, this would open the door to countries like Great Britain and Norway, but on the other hand, it would also open the door to Ukraine and Russia as well as, in principle, to Turkey and other countries in the Middle East, which today are heavily dependent on the export of oil and gas. These countries also need an economic perspective for the time after the energy transition. It might also make sense to extend this to all countries bordering the Mediterranean. The topic of energy partnerships with African states is already on the EU’s agenda.

The main task and object of a European energy transition would be to implement the energy transition with the aim of stopping global warming.

So far, scientists have repeatedly pointed out that a peace treaty must be secured by protective powers if it is to last. This is usually done by means of military, but is associated with the risk that in the event of a breach of the peace treaty, the protective powers will be directly drawn into a war with Russia or possibly also with Ukraine. Integrating Ukraine and Russia into a European Energy Union, on the other hand, would offer the chance to develop a civilian framework of a guarantee for the observance of a peace treaty.

Both Russia and Ukraine have considerable resources that are necessary for the technical implementation of an energy transition. A European Energy Union would therefore offer both countries economic development perspectives beyond fossil energy production.

What is the benefit of a European Energy Union for Russia?

The only question that remains is what interest Russia might have in a European Energy Union in the long term. In my opinion, there is a convincing answer to this question: Russia’s permafrost which is slowly thawing. On the one hand, they would release enormous quantities of climate-damaging gases and thus further accelerate global warming. On the other hand, the infrastructure of the permafrost regions is not designed for unfrozen soils. Thawing the soils would therefore cause enormous damage and extremely high costs for Russia. The worst could still be averted. And that would be in Russia’s interest as well as in the interest of Ukraine and Europe as a whole. After a year of war, neither Russia nor Ukraine are in a position to implement and finance an energy transition that is necessary for these two countries. Within a European Energy Union, however, both countries would have a chance; the EU could also use its undivided resources within the framework of an Energy Union to fund the energy transition instead of climate-damaging arms deliveries. And the states of the Middle East would also have a post-fossil perspective for their economies.

The path to pacification in the 21st century is no longer via transfer of wealth, but via the joint fight against global warming – in other words: via an Energy Union.

Author´s note:
This article is based on an exchange of views between the author and MEP Helmut Scholz (DIE LINKE).