Pipeline Antics

The South Stream Pipeline

There may or may not be a connection between the wrangling over the South Stream pipeline and the strange case of bank runs in Bulgaria (which has reportedly a very well capitalized banking system), but there is at least an odd synchronicity of these events in terms of their temporal sequence. Let's begin with a brief time line:

June 7, 2008, around noon, Brussels:

The Right Honorable Baroness Ashton of Upholland, currently serving as the High Representative of the European Union for Foreign Affairs and Security Policy, is sitting in her office, looking out of the window into the cloud-covered Brussels skies, contemplating the big problems of our time, which she and her fellow bureaucrats have set out to solve. Suddenly the phone is ringing, interrupting her reverie. She picks it up.

“Hello, who is this?”

“Hello Catherine, it's Plamen”

“Pla-who?”

“Plamen. Plamen Oresharski, you know, the guy from Bulgaria? Prime minister, EU-approved technocrat?”

“Oh, Plamen! Of course! What can I do for you?”

Oresharski clears his throat.

“John McCain is coming to visit us tomorrow.”

There is a pregnant pause. Finally, Ashton whispers:

“That's terrible. Gosh.” 

“You know what some people call him? The angel of death. I think of it more as a visitation than a visit actually.”

“Don't you worry Plamen, they only call him that on tinfoil hat conspiracy sites. Nothing bad is going to happen.”

“If you say so.”

Oresharski doesn't sound convinced.

June 8, early in the morning, Sofia:

Prime minister Oresharski, foreign minister Vigenin and energy minister Stoynev are sitting below the big desk in the prime minister's office. Stoynev's hands are trembling. Vigenin is staring at the mahogany paneling, his expression grim. Oresharski is wiping sweat from his brow. He is humming a tune under his breath.

“I don't think we can stay down here. We'll have to get up before they come”, Vigenin points out. Stoynev looks at his watch.

“I feel safe down here. We still have two hours. Maybe we should use the time to pray?” He looks at Oresharski. “Can you stop the humming please? It makes me nervous.”

“Oh, sorry, of course. It's just that the song seemed to be fitting the occasion…”

“What song is that?” Stoynev demands.  Oresharsky starts singing:

“The angels live inside me: yes, I can feel them smile.

Their presence strokes and soothes, the tempest in my mind;

And their love can heal the wounds that I have wrought,

They watch me as I go to fall….”

What might a “working visit” by John McCain and two other senators mean? Experience suggests several possibilities:

A) there would be a violent revolution in Bulgaria very shortly

B) the country was about to be bombed

C) both

As a result of these deliberations, it was evidently resolved to give McCain whatever he wanted.

OK, we made most of that up. Due to a lack of sufficiently sophisticated spying equipment on our part, we had to fill in a great many gaps in the conversations reported above by exercising our imagination a bit (we mainly picked Ms. Ashton because we know how she reacts when receiving shocking news). If you want a verbatim transcript of what was said by whom, you will have to ask the NSA or the GCHQ.

The limitations of our low tech wire-tapping equipment force us to exercise our imagination a bit.

However, later that morning, McCain and senators Chris Murphy and Ron Johnson did indeed pop in at Oresharski's office. It turned out that this must have been an extremely convincing visit.

Months of complaints by the EU had achieved little, but one hour after McCain's visit, Bulgaria's government announced that all work on the South Stream gas pipeline (which is supposed to bypass Ukraine), was going to be halted immediately, allegedly due to “objections of the EU competition commission”.

“Bulgaria’s prime minister, Plamen Oresharski, has ordered a halt to work on Russia’s South Stream pipeline, on the recommendation of the EU. The decision was announced after his talks with US senators.

"At this time there is a request from the European Commission, after which we've suspended the current works, I ordered it," Oresharski told journalists after meeting with John McCain, Chris Murphy and Ron Johnson during their visit to Bulgaria on Sunday. "Further proceedings will be decided after additional consultations with Brussels." 
McCain, commenting on the situation, said that "Bulgaria should solve the South Stream problems in collaboration with European colleagues," adding that in the current situation they would want "less Russian involvement" in the project.”

As a result of Bulgaria halting work on the pipeline, Serbia did the same. Not because Serbia doesn't want to build it, but because it simply makes no sense to build part of a pipeline which can't be connected. Former Bulgarian prime minister Boyko Borisov remarked shortly thereafter:

“I have always said that in their attempts to mislead everyone—Brussels, Moscow and Washington—Oresharski and company will shipwreck this project… This is why Bulgaria suffered yet another humiliation today for the government’s inability to deal with the situation around South Stream.”

Valery Yazev, Deputy Chairman of Russia’s parliamentary commission on natural resources noted:

“The decision to suspend South Stream is political and lacks common sense and economic logic.”

This is of course just stating the blindingly obvious. Letting the majority of Russia's gas transit through the Ukraine is tantamount to inviting very cold European winters. It is also a virtual guarantee of further conflict with Russia. Who wants or needs conflict with Russia? Not Europe's citizens, that much should be perfectly clear.

The Oresharski government was incidentally dissolved on August 6 and replaced by a new interim government that will be in charge until new elections are held in early October.

Various South Stream route proposals – click to enlarge.

Involuntarily Embroiled in the New Cold War

With respect to the South Stream pipeline, Bulgaria finds itself suddenly embroiled in the new cold war against Russia. It should be noted in this context that the security of Russian gas deliveries is of the greatest interest to Bulgaria itself, which is currently 100% dependent on gas transiting Ukraine. There can be little doubt that most Bulgarian politicians would actually like to continue with the project.

As German vice chancellor Gabriel recently remarked, Russia has never failed to fulfill its contractual obligations with respect to energy deliveries, not even back when it was still the big bad Soviet Union. Why should it? After all, there is no mileage for it in not keeping its customers happy. It is quite different with Ukraine, which is already attempting to use its unique position as the main transit for Russian gas as a political lever:

“Ukraine threatened to block Russian oil and gas supplies to Europe in new sanctions against Vladimir Putin’s government, which it blames for a separatist uprising that has ravaged the country’s east.

Ukraine, which no longer receives any gas from Russia but acts as a conduit for its neighbor’s European customers, is considering a “complete or partial ban on the transit of all resources” across its territory, Prime Minister Arseniy Yatsenyuk told reporters today in Kiev. It may also ban Russian planes from its airspace and cut defense-industry cooperation.

“There’s no doubt that Russia will continue its course — started a decade ago — aimed at banning imports of Ukrainian goods, limiting cooperation with Ukraine, pressure and blackmail,” Yatsenyuk said. “In the most negative scenario for Ukraine, losses during the first year may reach $7 billion, not only because of sanctions but also because of the Kremlin’s aggressive policy.” The threat may signal that the government in Kiev calculates it has little to lose.”

Mr. Yatsenyuk may well have a legitimate gripe with Russia. Russia's government is indeed doing whatever it can to bring the Ukrainian economy to its knees, as things have increasingly spiraled out of control after the coup in Kiev. We don't want to discuss here which of these parties is more wrong.

The problem with this absurd idea is mainly that it will primarily hit European consumers. So for paying for the support of the coup by showering billions in money on the new government in Kiev and enduring a crippling of their economies due to the idiotic sanctions tit-for-tat with Russia, European citizens and tax payers are now supposed to freeze in winter just because “Kiev feels it has nothing to lose”? Huh??

Perhaps it is time Europe's leaders asked themselves what they have actually achieved when they decided to pursue Zbigniev Brzezinsky's old strategy on the behalf of the US. Is the further encircling of Russia by NATO really worth all this aggravation?

Obviously the obstacles erected against South Stream are to be seen through the same lens. It may make sense from the point of view of the US – the only party to the proceedings that really has very little to lose in this context and pursues its own geopolitical goals, but it makes precisely zero sense from Europe's point of view. Ensuring the security of Russian gas deliveries should be high on the agenda, and stopping the construction of South Stream is achieving the exact opposite. We was always clear that the Brussels bureaucrats are a pest of course, but this is really the height of stupidity. We understand also that former Eastern Bloc nations like Bulgaria have a strong desire to be part of Europe, but they are now finding out about the downside of having joined yet another putative socialist super-state.

Nuclear Waste Disposal Site?

A curious news item then appeared on August 11:

“It has been recently announced Bulgaria’s government led by former premier Plamen Oresharski greenlighted a last-minute deal with Toshiba's US nuclear engineering unit Westinghouse to build a new reactor at the country's Kozloduy nuclear power plant. The topic has been widely commented in the country.
”Did [former chair of the Bulgarian Socialist Party (BSP)] Sergey Stanishev meet with the bosses of Westinghouse and what did they agree on at the meeting?,” asked Rumen Petkov, member of the Executive Council of the ABV party and former interior minister, speaking before journalists in Veliko Tarnovo. He wants the BSP leadership to answer 2 questions of his connected with the agreement between Kozloduy NPP and the US company Westinghouse.

”Was there a lunch meeting at Pozitano [the BSP head office in the capital Sofia] between Senator McCain and his 2 other colleagues which [BSP Chairperson and former chairperson of the National Assembly] Mihail Mikov, [former defence minister] Angel Naydenov, [former foreign minister] Kristiyan Videnin and [BSP official] Yanaki Stoilov took part in and what engagements were undertaken?,” was the second question Petkov asked.

US Senator John McCain and two of his colleagues paid a visit to Bulgaria in June.”It is said in some media the engagement [over the building of a 7th unit at Kozloduy NPP] was undertaken there, that the 7th unit at Kozloduy NPP was to be made by the former government an irreversible project, the price of which we will all pay. As we have state guarantees concerned, as it is an engagement of Bulgaria in the face of Kozloduy NPP as in order for a loan to be drawn, the 5th and 6th units at Kozloduy NPP will be pledged, which is in essence making it the property of someone else,” Petkov said. Rumen Petkov also wanted to know if a nuclear waste storage depot would be built in Bulgaria under an engagement [former economy and energy minister] Dragomir Stoynev had undertaken.”

So as a side effect of Mr. McCain's visit, the Westinghouse contract was finally pushed through. See also our remarks on this topic in the next article that updates the recent banking scandal in Bulgaria.

Unfortunately the comment on nuclear waste was not further elaborated on. We do however know that all over Europe, nuclear waste is considered a huge problem. In many places a lot of it has been piling up in “temporary” storage facilities, as permanent disposal is technically and politically very difficult (due to NIMBY considerations, among other things).  So it would be interesting to know if this comment relates only to waste generated in Bulgaria itself, or if there are plans to make Bulgaria into a dumping ground for the nuclear waste of other countries. The waste has to go somewhere, right?

Is Bulgaria destined to become a dumping ground for nuclear waste?

Conclusion

The North Stream pipeline, which mainly supplies Germany, has already been finalized in 2011. Why was there no problem with building that pipeline? For many years, the US and a few EU nations have pushed a competing project to South Stream, the Nabucco pipeline, which was supposed to connect only to suppliers considered reliable US client states with the aim of circumventing Russia.

Again, the idea of “reducing Europe's dependence on Russian gas”, which is promoted by several European countries as well, is simply utterly nonsensical. Russia is a thousand times more reliable as a supplier than any of the countries that were planned to supply the Nabucco project. Since the main supplier of this particular pipeline was incidentally supposed to be Iraq (as incredible as that sounds – the others were by the way Egypt, Turkmenistan and Azerbaijan, all well known paragons of democracy, human rights and reliability!), we can safely assume that the project has died. So why the continued resistance against South Stream? It makes no economic sense and is completely illogical in every other respect as well. The EU's political leadership is acting as though Europe were a US protectorate, a mere vassal. However, no-one has asked the tax payers who keep this leadership in bread whether they agree with this approach.