Project “Ukraine”: The Tale of Gas and Democracy

Russian Political Analyst, Dmitry Drobnitsky, explains why Joe Biden is so opposed to the second line of the Nord Stream. 

The original text in Russian can be found here; Edited by Desi Tzoneva

Last week, Joe Biden made his – likely to be last – big international journey as US Vice President. He visited Latvia, where he calmed down Eastern European members of NATO, who were frightened by Donald Trump’s threats of abandoning the US allies in case they did not make any efforts to reform the North Atlantic alliance.

He also conducted very tough negotiations with the Turkish Prime Minister and the President of the country. Ankara had felt insulted, as the US did not express much concern for Turkey during the recent coup attempt. Some Turkish officials even suspected that the US might have been involved in the coup or, at least, had information about the conspiracy, but had not forwarded it to the Turkish President. Besides this, Turkey has demanded the extradition of Fethullah Gülen, who is suspected of being involved in planning the coup attempt.

Thereafter, Joe Biden travelled to Sweden, where he appealed to EU states to cancel the construction of the second line of the Nord Stream. Sweden was the key country for Biden to convince because of its unique right to cancel the project – Sweden has access to the Baltic Sea, where the largest part of the gas pipe is located. The US Vice President claimed that Nord Stream 2 was a fundamentally bad deal. Biden also mentioned that Europe’s dependence on Russian gas destabilises Ukraine. “Europe needs to diversify the gas sources,” he said.

What did Biden mean by that?

A third of all gas consumed by the European Union comes from Russia. After the second line of the Nord Stream is complete, more than 80% of this gas could be delivered through the bottom of the Baltic Sea. In such circumstances, Ukraine will lose its role as a key transit country. This may make all Ukrainian gas transportation infrastructure fade in importance and, obviously, become unprofitable. Thus, Ukraine will have to abandon them, especially with low gas prices and constant payment delays.

Ukraine may find itself in a very complicated situation. It may lose all levers of pressure on Gazprom since it will no longer control the gas transit route. Moreover, the entire gas transportation system in Europe may change and there may be no place left for Ukraine.

But why does Biden care so much about European energy contracts and gas pipes in the Old World?

The reason is that Biden has a personal interest in the Ukrainian gas transit industry. Soon after the Euro-Maidan events in 2014, his son, Hunter Biden, became a member of the board of directors of Burisma Holdings, the largest gas company in Ukraine. This corporation – whose real owners are unknown, while its formal ones are registered in Cyprus – began to trample all Ukrainian gas assets, even during Yanukovich’s reign. The new regime, however, made Burisma Holdings a monopoly in the industry.

Burisma plans to mine not only natural gas, but to also deal with shale gas. In addition to this, the company intends to build a network of sea terminals and pipelines to receive liquefied natural gas (LNG).

In Stockholm, Biden offered to deliver LNG directly from the US to Europe. Several European countries already have an opportunity to receive this type of gas; however, the terminals have quite a poor connection with the gas transportation system based on the Russian pipelines. The idea of connecting the terminals with the existing pipeline, therefore, is fairly logical, unless the idea is buried, of course.

At the present, due to the low level of oil prices, both shale and liquefied gas are not very popular in Europe. However, the prices will not be low forever. Besides this, shale gas technologies keep forging ahead, which will make the Ukrainian gas business profitable in the future, unless it is overrun by Nord Stream 2. This is why Biden called the second pipeline “a destabilising factor.”

In today’s Ukraine, not a single serious decision is made without two people – the Assistant Secretary of State for European and Eurasian Affairs, Victoria Nuland, and the US Vice President, Joe Biden. The coup in Ukraine was guided by the neo-conservative forces led by Nuland – this was discovered during a journalistic investigation in 2014. Since Joe Biden was a co-sponsor of the Euro-Maidan project, he claimed a share in the Ukrainian gas business.

The “democratisation” process in Ukraine was also forced by the National Democratic Institute (NDI), of which Biden Junior is a member of the board of directors. The NDI is an affiliate of the US Democratic Party. The main aim of this institute is to “help build democracy” in different countries around the world. The chairperson of the NDI board of directors is Madeleine Albright. Whether or not Albright took part in the “Ukraine: Gas and Democracy” project, remains unknown. However, the interesting fact is that the board of directors of Burisma Holdings includes Devon Archer, who is Hunter Biden’s partner in US-based investment trust company, Rosemont Seneca Partners. Archer is also John Kerry’s friend and he runs a property fund founded by Kerry’s wife, Teresa Heinz Kerry.

Therefore, so-called “friends of the Ukrainian democracy” have been inspired not only by their political views, but also by certain business interests. It was thus not Europe that Biden was protecting from Russian gas aggression during his visit in Sweden; he was protecting his investments.