Belarus On the Russian Energy Needle
This year, Russia agreed to supply Belarus with discounted oil only for the next six months, rather than for the whole year.
The size and conditions for further shipments will depend on Belarus’ participation in specific integration projects and the sale of several companies to Russia. All of this shows how the Kremlin uses Belarus' energy dependence to get what it wants.
Energy remains an area in which Russia has a very strong position in Belarus. Russia dominates the nation's gas infrastructure, oversees the work of its oil refineries and has significant influence on its electrical industry.
Although the building of a nuclear power plant looks economically beneficial, Russia`s control over the project, combined with Belarus' doubtful ability to repay the accompanying $9bn loan, raises many questions.
Currently, Russia is not using all of its energy potential to blackmail Belarus. Kremlin has possibilities to bankrupt not only individual Belarusian enterprises, but also the entire country. The Russian energy needle will remain a significant factor in the geopolitical choice of Belarus today and even after Lukashenka`s reign.
Gas Weapon
Russia almost completely controls the gas infrastructure of Belarus. Gazprom is the sole supplier of gas to Belarus, a Russian monopoly has controlled the Yamal transit pipeline since its inception, and after the acquisition of Beltransgaz, Gazprom owns almost all the pipeline in Belarus. Beltopgas, a small state-owned enterprise, which is primarily engaged in the production of peat, remains in charge of small gas supplies.
Gas trunklines in Republic of Belarus
Source: gazprom.com.
Although Gazprom became a monopoly in Belarus, it is not pushing prices higher. Belarus receives natural gas cheaper than any other country in Europe. In 2014 Belarus pays only $ 167 per thousand m3.
Russia at present does not use its full control over the gas infrastructure for political or economic blackmail, although it remains possible in the future. Under the current conditions, Gazprom can arbitrarily change the prices, which could force some enterprises to go bankrupt or perhaps even the whole country. The Russian monopoly has its finger on the gas artery of Belarus and at any moment can click on it to implement Russian interests in Belarus.
| Country | Gas Price |
| Belarus | $167 |
| Ukraine | $268.5 |
| Poland | about $500 |
| Lithuania | about $500 |
Sources: Official documents and mass media publications
Gazprom remains the pioneer of Russian big business in Belarus. The Russian monopoly has been steadily upgrading the Belarusian gas transportation system, investing in the banking sector, raising the salaries of Belarusian employees. The corporation conveys a simple message from the Russian government to Belarusian society: selling Belarusian enterprises leads to better welfare.
Black Gold Influence
Belarus' dependence on Russia in the oil industry remains less significant that in case of natural gas. Although Russia is the only supplier of oil to Belarus right now, the oil infrastructure belongs predominantly to Belarus. As in the case of gas, Russia decides how much and at what price to deliver raw materials to Belarus depending on the state of their relations.
The Belarusian state independently controls the Navapolatsk refinery and has a majority stake in a refinery in Mazyr. Russian company Slavneft, controlled by GazpromNeft and Rosneft, owns 42.58% of the shares of the Mazyr refinery. Part of the Druzhba pipeline, which goes through the territory of Belarus, remains under control of the Belarusian authorities.
Annually, Russia delivers enormous volumes of oil to Belarus. In the first half of 2014, Russia will supply 11.5 million tonnes of crude oil to Belarusian refineries. At the moment the parties have not announced the price of oil, but certainly this price will be sufficient to ensure the functioning of the most profitable Belarusian companies in 2013 – Mazyr and Navapolatsk plants.
The Kremlin wants to achieve the same position in the oil industry as in gas – to take control of the entire oil infrastructure of Belarus. It is a rather straightforward position to hold as only Russian shipments to Belarusian refineries remain economically meaningful. In 2010-2012 Belarus bought oil from Venezuela, though it was not very economically feasible nor did it make economic sense, even though it became a big challenge for Russia.
Small Opportunities for Energy Independence
In 2010, the period of dialogue with the West and during its strained relations with Russia, the Belarusian authorities adopted a strategy for developing the energy potential of the Republic of Belarus. This strategy aimed at modernising the antiquated energy sector and diversify its energy supply away from Russia. However, the strategy proved to lack any economic commonsense, and therefore the authorities refused to implement it.
Belarus has several wind turbines and 49 hydropower plants throughout the country, but they do not play a significant role in the energy security of Belarus. Belarusian officials do not know how to talk to businessmen and this further increases Belarusian dependence on Russia.
German firm Enertrag planned to build a wind energy park near Minsk Park, an investment that would have been about € 360 million. When the firm had already spent about € 300 thousand, authorities abandoned the project, justifying backing out due to the potential barriers of a military radar that was located nearby.
Belarus has the necessary infrastructure to provide itself with electric power. However, Belarus creates electrical energy primarily by burning gas. This means that in this area Belarus' opportunities to achieve greater energy independence remain quite feeble.
Belarus imports a small portion of its electricity from Russia and other countries. In a bizarre incident, in 2009 the Russian authorities claimed that the unauthorised transit of the electricity produced in third-party countries for Belarus was going through the territory of Russia. Unfortunately, the Kremlin did not disclose any of the details of these cases and no more information has been made public.
Constructing a nuclear reactor using Russian specialists on Russian money still cannot help provide energy to all of Belarus, but at the moment remains the only chance Belarus has to diversify its energy supplies.
At the same time the results of the agreements signed by Russia and Belarus gave the Kremlin control over the export of energy created in the Astraviets Nuclear Power Plant. Energoconnect, the Belarusian-Russian joint venture, oversees the export of Belarusian electricity. Although the Belarusian economy remains interested in the construction of the nuclear power plant, the authorities still face a problem with repaying a $ 9bn loan that it has received from Russia for the construction of the plant.
The absence of energy independence has left Belarus in limbo. Even if pro-Western politicians come to power, they will be forced to reckon with their dependence on Russia in such a sensitive area as energy. There is no doubt that in case of the elites’ desire to bring Belarus closer to the EU, Russia will fully use its energy potential for blackmail. Belarus will have serious problems getting off of Russia's energy needle.
Most Popular Articles on Belarus Digest in 2013
In 2013 Belarus Digest published over 250 articles. We selected top ten most viewed articles published this year.
1. Getting A Belarusian Visa: Easier But More Expensive
Since 22 August 2013 all foreigners can get Belarusian visas through the Minsk National Airport just after their arrival. However, these and other measures to relax the visa regime on the eve of the 2014 Ice Hockey World Cup still remain incomplete. They leave a number of obstacles on the path to simplifying travel to Belarus and from Belarus which includes low number of no visa treaties with other countries and high visa costs.
Moreover, the government does not want to address the painful issue of the simplification of the visa regime with the EU for purely political reasons. Visa liberalisation will lead to potentially unpleasant consequences for Belarusian authorities such as brain drain and the impossibility to prohibit undesirable Western politicians and activists from entering Belarus.
2. Snow Storm Xavier Paralyses Belarus
Large parts of Belarus and the Belarusian capital Minsk have spent this weekend under exceptional circumstances. The cyclone Javier has paralysed large parts of the country for almost two days. While similar weather conditions in the USA would make it to the top news in Europe, there has been no mentioning of the storm in Belarus in Western media.
It started as simple snow fall on Friday morning, but approximately 20 cm of snow fell in the following 24 hours. The wind was 22 metres per second according to the Belarusian hydro-meteorological centre. Sight was limited to 100 metres in the Minsk region on Friday afternoon because of the heavy snow falls. Although the country is used to severe winters and well equipped to deal with large amount of snow, public life has come to a halt at this weekend.
3. Vilnius: The New Mecca For Belarusian Shoppers And Activists
On weekends, Vilnius looks like a Belarusian city. Cars with Belarusian registration plates, crowds of Belarusians carrying shopping bags, even bus schedules to Belarus from big shopping centres. In 2012, according to the Lithuanian State Department of Tourism, 400,000 Belarusian guests visited Lithuania. In politics, Lithuania maintains a critical position against Lukashenka's regime. A significant number of offices of foreign foundations and organisations which work with Belarusian civil society are located in Vilnius.
Lithuania, somewhat paradoxically, remains one of the few countries which profits from Belarus' isolation. Thanks to the protectionist practises of the Belarusian regime, it has become much cheaper for Belarusians to pay for visas and transportation expenses, and to buy many goods in Lithuania, than at home.
4. Belarus And Russia Prepare For The West – 2013 Military Drill
The planned Belarusian-Russian joint military drill, “West 2013”, has stirred up NATO member countries. The armed forces of both countries will hold the drill in the autumn, while some Polish and Lithuanian politicians have already discussed the threat of war.
Alexander Lukashenka said on 21 February that “Belarus and Russia are not going to threaten anyone”. This time he is telling the truth. A war in the centre of Europe remains beyond contemporary perception of reality, while the mentioned military drills seem to be an attempt to satisfy Russia’s imperial complex. The Belarusian regime uses intensive military cooperation as a pretext for getting more financial aid from the Kremlin.
5. EHU: How Belarusian Is The Belarusian University In Exile?
The European Humanities University, also known as Belarus's university in exile, is struggling to find its identity. It is torn apart between being the Belarusian university in exile and a "normal" European university based in Lithuania. Some say, it has lost its Belarusian character and gave up on its original mission. Others say that moving away from the Belarusian language and Belarus-focused curriculum is a sign of a truly international university, which the EHU should be.
If the EHU is to remain loyal to its original mission as a Belarusian university, it should seriously think about offering what is not available in Belarus or at Western universities. In addition to greater academic freedom (which some say exists in Belarus too), it should keep Belarus-focused courses and language at the forefront of its activities.
6. Belarus Wants New Russian Fighter Jets But Without Russian Pilots
Last week, Russian defence minister Sergei Shoigu discussed with Alexander Lukashenka establishment of a Russian air force base in Belarus. A few days later, Lukashenka dismissed the claims that Russia will have a military base in Belarus. The news came as media of neighbouring countries continue to discuss the significance ofBelarus-Russian military drill West-2013 (Zapad-2013) scheduled for autumn.
Belarusian and Russian officials insist that the West-2013 drill does not threaten anyone, and remind that last year NATO conducted a dozen of drills of different scales in neighbouring countries. Despite various speculations in Belarusian and Western media, little evidence exists to support that is Belarus threatening anyone military, together with Russia or on its own.
7. Higher Education In Belarus: Burdened By Soviet Traditions
Belarusian Minister for Education Siarhei Maskevich on 28 January 2013 expressed his hope that students will convert the Belarusian science "into the main factor of socio-economic and mental development of the country". But does the government really foster the progress of students' education in Belarus?
The lack of academic freedoms, mandatory and old-fashioned study plans have become the main defects of the Belarusian higher education. While government makes certain steps to approach these issues, the progress is rather slow.
8. Four Western Myths About Belarusian Higher Education
The Minister of Education Syarhei Maskevich announced on 3 May 2013 that "Belarusian universities enjoy a high level of autonomy". Considering the fact that Belarus remains the only European state outside of Bologna process precisely because of its lack of academic freedoms, top Belarusian officials may not be completely honest.
However, many myths about Belarusian higher education exist in foreigners’ minds as well. For example, the government neither owns all the universities, nor educates people free of charge. Political expulsions happen only very rarely and usually students can travel abroad without any problems.
9. Minsk Police Cracks Down On Prostitution In Elite Clubs
On 20 August, a special police unit arrested two employees of the famous Shangri La Сasino. Investigators suspect them of organising a prostitution services to the casinos' VIP clients. A similar case happened in 2012, when employees of the elite entertainment centre Dankoff Club were arrested on the same accusations and soon the owner himself also appeared in jail.
Belarusian authorities officially consider prostitution a blatantly illegal activity. Yet despite the high capacity of the state, they are still unable to do away with the problem. The reason may be quite simple: such networks could exist under the "roof" of high officials who have direct or indirect interest in this business.
10. Do Belarusians Want To Join The EU?
On 2 March, the Belarusian Institute for Strategic Studies presented a report on geopolitical preferences of Belarusians. The media paid little attention to the document presented by an influential Belarusian think-tank, although the conclusions of this report could be important for Belarus.
Despite the crisis in Europe, the regime’s anti-European propaganda and the EU’s weak informational policy inside Belarus, the number of Belarusian euro-enthusiasts continues to grow, slowly, but still. At present moment, 17 % Belarusians consistently support the idea of European integration. Moreover, if we held a referendum on Belarus’ joining the EU tomorrow, 38,2% Belarusians would have said “yes”.
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