Alexey V. Mikhalev
mihalew80@mail.ru
Doctor of Science (in Political sciences), Associative research fellow in Sociological Institute of Russian Academy of Science (Saint Petersburg).
Introduction
In 2021, the energy crisis gained breadth, and it was caused by both the pandemic consequences and environmental problems. An important consequence of the crisis was an increase in demand for gas, and there was a widespread concern not only in Europe but also in China. The local scale of coal consumption, not only in China but also in neighbouring Mongolia, has led to the emergence of a whole range of environmental problems that affect both the quality of life of the population and the international reputation of those countries. For a long time, Beijing and Ulaanbaatar have alternately ranked among the world’s dirtiest capitals. At long last, China has announced its ambition to achieve carbon neutrality, or zero emissions, by 2060 (Wang Wen, 2021). This led to a reduction in coal consumption here and coal replacement by gas as a more environmentally friendly fuel. But the transition to carbon neutrality is not just an economic task; it is a political challenge associated with moving towards a new energy sector, and at the same time, towards a new landscape of power in the region.
The Geopolitics of Gas: East Asia
The Russian corporation Gazprom is one of the largest gas suppliers in the world. “Green Transition” gives new meaning to Russian gas pipeline network expansion projects. On 8 May 2015, Gazprom and the Chinese corporation CNPC agreed on a decision to build the Soyuz Vostok, a strategic branch of the Power of Siberia-2 Russian gas pipeline. This is of great importance for China since it will increase the volume of Russian gas supplies to 50 billion cubic metres per year (The feasibility, 2021).
Soyuz Vostok is supposed to transport gas from the Yamal field to the central regions of China through Mongolia, which has become a key project participant. Since the Russian-Mongolian memorandum of readiness for construction was drawn up in August 2020, work to ensure it has not been discontinued. Throughout 2021, a feasibility study and a gas pipeline route were coordinated. To ensure construction, it was decided to engage foreign labour in Mongolia. In June 2021, Minister of Foreign Affairs of Mongolia B. Battsetseg noted: “I am pleased that despite the conditions of the pandemic, research on the project of a gas pipeline from Russia to China through Mongolia is well in progress. We are ready to continue to provide all kinds of support to the activities of the special purpose company Gas Pipeline Soyuz Vostok” (Work, 2021). By the autumn of 2021, most of the technical documentation and environmental nuances regarding the construction of the gas pipeline between Russia and Mongolia had been agreed. At the same time, in Mongolia, this project was supported by both the former leader of the country represented by President H. Battulgi and U. Khurelsukh who took over from him in June (Mikhalev and Lukin, 2021). When speaking at the Eastern Economic Forum in Vladivostok in September 2021, President Khurelsukh said: “Active work to develop a feasibility study for the construction of a gas pipeline through Mongolia is underway; and this will become a large and/or largest creative project in the Far Eastern region” (Kharelsukh, 2021).
This support is due to the fact that the gas pipeline is so essential for Mongolia itself. It is designed to provide it with more energy resources necessary against the backdrop of the mining boom (Muller, 2019). The specially created company Gas Pipeline Soyuz Vostok promises to develop a feasibility study for the construction project by the end of 2021, including a detailed calculation of investment and operating costs. In October 2021, an official message was published on the Gazprom telegram channel: “The Government of Mongolia has already taken measures of state support for the project, as well as a fundamental decision to reserve land plots for the placement of gas pipeline facilities” (The feasibility, 2021). As for approvals from China, they were quite clearly enshrined as early as the 2015 agreement.
Detailed coordination of technical documentation with Mongolia is largely due to the fact that for the first time in history, this country is included in a network of gas consumers, while China is an old and stable partner of Russia in this industry. In the context of the constant politicisation of Russian gas supplies to Europe, cooperation with China looks more attractive. Over the past 30 years, at the level of official rhetoric, they have never tried to interpret Russian supplies in the spirit of expansion. As a result, the purchases of Russian gas by China are steadily increasing.
The name “Soyuz Vostok” is full of symbolism; it manifests a broad range of political meanings that Russia and China are promoting at the level of the futurological agenda. The feasibility study of the project was approved on the day of the celebration of the sixtieth anniversary of space exploration, but the name refers to not only the era of space exploration but also Putin’s policy of “turning to the East”. It is just the first step in climate diplomacy to build a carbon-neutral economy here that is gaining popularity in Asia.
The general context for what is happening is gas prices, which are rapidly growing and have already reached levels in excess of a thousand dollars per thousand cubic metres. Against the backdrop of ever-growing demand, the Russian Power of Siberia-2 gas pipeline is steadily breaking records for increasing supplies to China, but some Chinese corporations, such as Sinopec, have begun purchasing liquefied natural gas from the United States. In other words, Asian markets are becoming more attractive and calling the attention of most world powers. In these conditions, the already politicised energy trade is assuming greater geopolitical importance.
In November 2021, Mongolian Deputy Prime Minister S. Amarsaikhan announced the date for the start of the gas pipeline construction for the first time – in 2024. Construction may take another four to five years, that is, the first gas will go no earlier than 2028-2030.
Conclusion
The expansion of the Russian gas pipeline network creates a new geopolitical configuration in the region by providing China with an essential resource for shaping the image of an environmentally responsible world power. Both switching to gas and relying on green energy lay the foundation for the Chinese image of the future, which can provide the ideological basis for a new regional order, as experts in the field of regional relations in East Asia have repeatedly written about. In turn, Russia is significantly increasing its status in the region as an energy superpower capable of addressing major infrastructural challenges in a pandemic.
However, if we ignore the purely political aspects, then the need to restore and restructure the economy in the face of the ongoing pandemic comes to the front. The second year of the pandemic has had a significant impact on the energy priorities of the East Asian states. It became clear that the carbon foundation of the economy carries more risks than benefits. The former infrastructure built on the Soviet industrial model and focused on coal consumption needs to be gradually replaced with an alternative. However, today, only China has a clear concept of such a transition (Zhang and Barr, 2013), and to which resources from Russian Siberia are exported. This pattern of relations, which makes it possible to combine Chinese innovations and Russian resources, is capable of creating a new paradigm for the region’s future.
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