How Europe Got Hooked on Russian Gas Despite Reagan’s Warnings

The C.I.A. memo said that the gas line from Siberia to Germany was a threat to the future of Western Europe.

The agency didn't give President Biden a briefing today. More than four decades ago, it was advising Reagan.

The memo was correct. The start of Europe's dependence on Russian natural gas was marked by the subject of a bitter fight during the Reagan administration. Despite worldwide condemnation of the attacks and efforts to punish Russia financially, those gas purchases help fund Putin's war machine.

Reagan imposed sanctions in 1981 to try to prevent the Soviets from building a huge fuel line to Europe. He faced stiff opposition from both the Kremlin and European nations that were eager for a cheap source of gas, as well as from a powerful lobby close to home.

Lobbyists and industry executives fought the sanctions in a public-relations and lobbying campaign that played out across newspaper opinion pages.

Some of the world's largest oil and gas companies played a critical role in opening up Russia's reserves by opposing sanctions and advocating for business interests over national security, human rights or environmental concerns.

Europe's dependence on Russia's gas has put it in a compromising position, as they transfer enormous sums of money to Moscow to fund a Russian invasion that they oppose.

Europe's attempts to tackle climate change are being hampered by Reagan's attempt to block the natural gas line decades ago. Even as natural gas has helped to replace dirtier coal, the infrastructure that followed have effectively committed Europe to a reliance on gas that is hard to break even in a moment of global unity against Russian aggression.

The Soviet Union emerged as a power due to its oil and gas exports, according to a senior fellow at the Atlantic Council.

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Reagan reversed the sanctions that had stopped American companies from supplying or participating in the project in the face of opposition both at home and abroad. Two years later, the Siberia to West Germany line opened.

The industry continues to lobby.

Exxon met with White House officials when the Obama administration imposed sanctions against Russia.

As Russia massed troops on the Ukrainian border, the American Petroleum Institute, the powerful industry group, was lobbying against harsher sanctions in order to limit potential harm to the competitiveness of U.S. companies.

In the wake of Russia's invasion of Ukraine, Shell, Exxon, and BP have decided to end their Russian operations.

Exxon does not advocate for or against sanctions, but has communicated with the U.S. government to provide information about the potential impacts on energy markets and investments.

Ensuring retaliatory measures are clearly written to reduce any room for uncertainty and ensure maximum compliance is what the American Petroleum Institute has done.

John Murphy is the senior vice president for international policy at the U.S. Chamber of Commerce. The Chamber of Commerce, Exxon, and the American Petroleum Institute all condemned Russia's invasion. Both Shell and BP did not make a comment.

Four decades ago, there were concerns raised about the Reagan administration. Germany relied on Russia for 55 percent of its gas before Russia launched its attack on Ukraine.

The companies that have been working with the Russian regime were driven by pure financial interest, according to an adviser to the Ukrainian president.

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Millions of Poles woke up to find their country under martial law in 1981. The condemnation of the Polish authorities and their backers in the Kremlin was swift.

The fate of a proud and ancient nation hangs in the balance after the Reagan administration banned American companies from helping to build a gas line to Western Europe.

The European allies of America ire the measure because it promised a stable source of gas at a time when nations were still reeling from the oil shocks of the 1970s. The oil and gas lobby fought back.

The U.S. Chamber of Commerce warned the White House that the sanctions would hurt our international reputation for commercial reliability. Richard Lesher, the group's president, told The Washington Post that the pipeline would give Western Europe a degree of leverage over the Soviets.

The House Foreign Affairs Committee voted to lift the sanctions despite warnings from the Secretary of State.

The start of a huge build-out of gas infrastructure in Europe was marked by that battle four decades ago. 40 percent of the gas in Europe is supplied by an extensive network of pipes from Russia.

Moscow has gained leverage over its European neighbors. Tens of thousands of homes were without heat in 2009, when Russia and Ukraine were involved in a diplomatic dispute. More than a dozen people froze to death in Poland before Russia reopened its pipelines.

Europe's efforts to tackle climate change were slowed by an abundant flow of gas from Russia. The European Union wants to reduce its gas imports by two-thirds and increase its use of wind, solar and other forms of renewable energy.

They could have done that before, but there was no incentive to do it. She said that access to Russia's gas had slowed the move toward renewable energy.

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The early involvement of fossil fuel companies in the Siberia line was the beginning of a courting of a region with some of the world's largest reserves of oil, natural gas and other commodities. After the fall of the Soviet Union, the U.S. administrations traded their vigilance for a warm embrace of Moscow. In 2001, President George W. Bush said he had looked at Mr. Putin and got a sense of his soul.

Fossil fuel companies pursued joint ventures with Russia's state-controlled oil and gas giants because of a thaw in East-West relations. The Russian oil giant, which accounted for a third of the oil and gas production of the British company, was taken over by them. Russia's first liquefied natural gas plant, as well as investments in the Nordstream 2 gas line, were among the projects Shell worked on with the state-owned gas company.

Both companies say they are leaving those projects.

In the 1990s, Exxon invested in a gas project near the Pacific island of Sakhalin, and in recent years it has pursued a bigger stake in Russian oil and gas production. In 2012 a video was produced by Rosneft showing the wide-ranging nature of their partnership: joint headquarters in St. Petersburg and Houston, Exxon's operations in the Texas and Gulf of Mexico, and sharing of drilling technology.

Mr. Putin gave the Exxon chief executive, Rex Tillerson, one of the highest honors Russia gives to foreign citizens.

Exxon was forced to stall the deal because of the aftermath of Russia's annexation of the peninsula. After the United States adopted sanctions, Exxon signed legal documents with the chairman of the state-owned company. The Treasury Department fined Exxon $2 million for demonstrating reckless disregard for U.S. sanctions requirements.

Exxon said that the U.S. sanctions only covered Mr. Sechin's personal affairs, not the company he presided over. The judge in Texas ruled in favor of Exxon.

The lobbying disclosures show that Exxon worked to get Congress to pass sanctions against Russia.

The former Exxon lobbyist said that they had to explain to Congress how the sanctions were hurting businesses.

As recently as January 2022, the American Petroleum Institute was lobbying for sanctions against Russia to be softened in order to limit potential harm to the competitiveness of U.S. companies.

At his confirmation hearing to become Secretary of State, Mr. Tillerson stated that he had never lobby against sanctions personally.

The Republican Senator from Tennessee who was chairman of the Senate Foreign Relations Committee at the time, interrupted, "I think you called me at the time."

The two men talked on the phone a lot, Mr. Corker said.