Dutch-Russian Political Relations Could Hit Gas
The Netherlands has made clear that it holds Russia responsible for its part in the downing of Malaysia Airlines flight MH17 as it flew over eastern Ukraine on its way to Kuala Lumpur in 2014.
The Dutch government made this view public May 25 avoiding the usual diplomatic terminology, displeasing Russia which continued to deny its involvement. This so-far verbal clash may affect the two countries’ commercial and political relations.
An independent investigation into liability for the incident lasted almost four years. In the UN Security Council, Russia had backed resolution 2166, which obliged all countries to collaborate in the investigation.
Dutch foreign affairs minister Stef Blok (conservative liberal party VVD) used a meeting of the Security Council to give this decision a wider forum. The Dutch king, William Alexander, even spoke about an "open wound" in Dutch society.
A possible next step is to present the case to an international court or organisation for its judgment. This kind of approach is not traditional in Dutch diplomacy which almost always puts trade first. The risk of sanctions from Russia is as high as the risk of Dutch or EU-sanctions, perhaps explaining the decision by Dutch prime minister, Mark Rutte, that the government will handle the case one step at a time.
State owned companies involved
Several Dutch energy companies have or want to have business relations with Russia. Anglo-Dutch major Shell for example is already is present on Sakhalin and studies have been done to expand this project. It is also financially backing Nord Stream 2. Four Shell employees were on the flight.
Gas transport operator Gasunie has been collaborating since 2013 with Gazprom on LNG and GasTerra (25% Shell, 25% ExxonMobil) is an importer of Russian natural gas. It is owned half by the Dutch government, which owns all of Gasunie. The Dutch gas companies show a large reluctance to comment on the situation. "We don’t want to speculate," is Shell's reaction. "We don't talk about geopolitics," said Gazprom. "Our actions will always fit within the Dutch and the European legislation, also in case of economic sanctions. Until now, we have not received a signal in this direction."
"It is not a secret we are buying natural gas from Gazprom," says GasTerra. "This contract was signed several years ago and will run for several more. Today, we don't sign long term contracts any more. And at this point we don’t expect to extend existing contracts or start negotiations about new contracts when the existing ones are running towards their end date. We always act within the mandate of our shareholders, the Dutch state, Shell and ExxonMobil and within the gridlines of the Dutch and the European policy and laws. Until now, in conflicts with Russia, oil and gas were no part of political sanctions. As for the existing contract, the new political situation doesn't change anything about that. Its existing juridical implications and obligations retain their value."
Dutch media not united
The Dutch media is divided on the matter, with some calling for an uncompromising attitude towards Russia and others trying to fit the incident into a broader perspective. In a free opinion article in the leading Dutch newspaper NRC, political geographer Tom Nierop made the point that MH17 was not shot down deliberately. He asked why every aspect of the case gets framed into a political struggle between the 'free' western world and 'aggressive' Russia. He also wrote it is correct to trace those responsible for the incident, but pleads for a proportionate approach. "In wartime situations deplorable accidents happen, also caused by groups supported and armed by western nations. The current reaction against Russia is disproportionate and inconsistent." He remarks that the Dutch government makes no reference to Ukraine’s failure to close down its unsafe airspace.
Nierop's contribution in NRC was soon followed by a reaction from Ko Colijn, an international security expert at the Clingendael Institute. But compare MH17 with the shooting down of an Iranian civil airplane by the US navy in 1988. At that time, American vice-president George H.W. Bush repeated several times there was no reason for American apologies.
The involved navy commander and his crew even received an award for their meritorious conduct, despite having told lies during the investigation. But finally – in 1996 – the US paid a large compensation to Iran and the victims and expressed its regret, but without an apology.
"Part of Dutch public opinion is traumatised by the downing of MH17, emotions which have been strongly directed against Russia," observes David Criekemans, assistant professor in international politics and security at University College Roosevelt in Middelburg. "This allows the Dutch politicians and Dutch diplomats only limited diplomatic manoeuvring room in international diplomacy. But especially after Blok's intervention in the UN Security Council, it has also become difficult for the Russian federation to move on this issue. This leads to a certain stalemate for now."
Russia applies the brakes
"Generally, Dutch-Russian political relations had already cooled down since the annexation of the Crimea peninsula by the Russian federation and the possible Russian meddling in the US presidential elections," says Criekemans. "But today it looks like Russia could passively use its economic ties to influence its political relations with the Netherlands. Russia could slow down negotiations for new projects, for instance." Criekemans thinks the negotiations won't be stopped completely though. But I foresee no progress will be made during the next year."
One of these potential new projects could be any westward extension of the Nordstream 2 gas pipeline to the UK, crossing Dutch territory. "Parallel with the delaying by the Russians there is also the new Dutch vision on natural gas. Dutch policy makers currently give the impression that the Netherlands will decrease natural gas as a percentage of its national energy mix. This somewhat ignores the fact that gas can play an important role in the energy transition as a kind of 'bridge' fuel, in combination with and towards more renewable sources."
Out of the 298 victims of the crash, 193 were Dutch, 43 (including the whole crew) were Malaysians and 27 were Australians. Australia strongly supports the Dutch claim, but Malaysia is keeping a lower profile. All EU members have expressed their support for the Netherlands. "At the moment this is only lip service," Criekemans says. "I'm sure the Russians understand that many other EU-countries have different opinions on the issue and come to a different evaluation.”
One illustration of this is Austria’s welcome to Russian president Vladimir Putin this week and the extension by OMV of its long-term gas contract with Gazprom to 2040, together with 50th anniversary celebration last week of Austria becoming the first western European country to agree to import Russian gas.
And discussion of the tragedy is largely limited to the Netherlands. Among other EU states, the UK lost ten citizens, while Germany and Belgium each had four victims. The current Dutch stance on natural gas in its national energy mix and the damaged relationship with Russia could in the end benefit Belgium and the Belgian company Fluxys in its ambition to become the 'gas hub' of western Europe."