"Russian Gas Pipeline Could Pose Danger to Europe," CIA Warning from 40 Years Ago

[Asia Economy Reporter Byunghee Park] "The 3,500-mile gas pipeline stretching from Siberia to Germany poses a direct threat to Western Europe. The pipeline will cause Europe to become dangerously dependent on Russian gas, leading to adverse effects."

The Central Intelligence Agency (CIA) of the United States reportedly briefed then-President Ronald Reagan on this over 40 years ago, according to a recent report by The New York Times (NYT). Ultimately, the NYT reported that the pipeline warned against by the CIA became a source of funding for Russia's war in Ukraine.

In 1981, President Reagan imposed sanctions to prevent American companies from participating in the construction of the Russian gas pipeline. The situation in Europe was complex. In December of that year, martial law was declared in Poland. Wojciech Jaruzelski, then Prime Minister and Defense Minister of Poland, warned of the risk of a Russian invasion and declared Solidarity, the first free labor union in Eastern Europe, an illegal organization. Thousands of Solidarity members, including Lech Wał?sa who later became Poland's president, were arrested. On Christmas Eve, President Reagan announced economic sanctions against Poland, noting that 10 million of Poland's 36 million people were members of Solidarity.

Reagan's efforts to block the Russian gas pipeline ended in failure. Both Russia and European countries immediately opposed the sanctions. At the time, the effects of the 1970s oil shock had not yet dissipated, and European countries desperately needed Russia's cheap natural gas.

Within the United States, oil and gas companies seeking profits from Russian gas opposed the sanctions. Wolfgang Oehmer, chairman of an ExxonMobil subsidiary holding shares in the pipeline, argued that "there is no reason for Reagan to ban the pipeline project." U.S. Secretary of State George Shultz warned that the U.S. government would face difficulties handling the Polish crisis, but the House Foreign Affairs Committee voted to lift the sanctions. Ultimately, President Reagan lifted the sanctions in 1982, and the Russian gas pipeline was completed two years later. The NYT pointed out that oil and gas companies prioritizing corporate profits over national security, environmental, and human rights issues played a decisive role in opening the Russian oil and gas market.

Former U.S. President Ronald Reagan (left) and former Soviet President Mikhail Gorbachev are shaking hands during a meeting in Geneva, Switzerland, on November 19, 1985.
Photo by AP Yonhap News

As the CIA warned, Europe became excessively dependent on Russian gas, which provided the backdrop for Russia's invasion of Ukraine. Europe imports 40% of its consumed gas from Russia. In Germany, this proportion reaches 55%. German Chancellor Olaf Scholz stated his opposition to banning imports of Russian fossil fuels ahead of the EU summit on the 24th and 25th. High dependence on Russia complicates Europe's response to Russia's invasion of Ukraine and affects Europe's carbon neutrality plans.

Agina Grigas, senior fellow at the Atlantic Council, a U.S. think tank, said, "Russia is a superpower that emerged by exporting oil and gas, and nothing has changed."

When Russia annexed Crimea in 2014, the Obama administration imposed sanctions on Russia. However, ExxonMobil opposed the sanctions and continued to pursue deals with Russian oil and gas company Rosneft. The U.S. State Department fined ExxonMobil $2 million, but ExxonMobil filed a lawsuit and avoided the fine. Just before the Crimea invasion in 2013, Russian President Vladimir Putin awarded Rex Tillerson, then CEO of ExxonMobil, the Order of Friendship, the highest honor given by the Russian government to foreigners. ExxonMobil invested in gas projects in Sakhalin in the 1990s and has recently increased its stake in Russian oil and gas ventures. It also secured a $500 billion investment contract with Rosneft.

Until Russia deployed large-scale troops near the Ukraine border this year, the American Petroleum Institute (API) opposed strong sanctions. API emphasized that sanctions should target specific entities to avoid damaging U.S. competitiveness. After Russia's brutal invasion of Ukraine, ExxonMobil's stance shifted somewhat. ExxonMobil stated, "We neither support nor oppose sanctions" and pledged to "provide information on the impact on energy markets and investments while maintaining communication with the government."

BP and Shell also announced they would halt ongoing projects and new investments in Russia. BP declared it would divest its 20% stake in Rosneft. One-third of BP's oil and gas production comes from joint ventures with Rosneft. Shell has joint ventures with Gazprom and Russia's largest natural gas plant and recently invested in the Nord Stream 2 pipeline, which Germany refused to approve.

Oleh Ustenko, chief advisor to Ukrainian President Volodymyr Zelensky, said, "Oil and gas companies have cooperated with Russia solely for monetary gain. They have turned a blind eye to morality, and now we are paying the price."

The EU aims to completely stop oil and gas imports from Russia by 2027 and has decided to reduce gas imports by two-thirds this year. However, Margarita Balmaceda, a professor at Seton Hall University in New Jersey, USA, said, "The EU could have done the same earlier."

This content was produced with the assistance of AI translation services.