Lithuanian Political Heavy-weights Clash over Shale Tender

A long brewing disagreement on shale gas development between two leaders of the ruling Justice and Order Party and MEP colleagues, is flaring in Lithuania. 

Rolandas Paksas, Justice and Order Party chairman, and Valentinas Mazuronis, the former Lithuanian Environment minister and the party’s first deputy chairman, are in the midst of a nasty spat, triggered by the different takes on the country’s shale gas future, a hot issue in the Baltic nation

“Lithuania should not rush with a new tender”

Following party leader Paksas' public statement that Lithuanian Environment Ministry “should not be hurrying with a repeated shale gas exploration and mining tender”, former minister Mazuronis lashed out at his party boss and now a European Parliament counterpart, accusing him of being involved in activity detrimental to Lithuania and beneficial to the hostile countries within the reach of hand. Few doubted that Mazuronis, a staunch supporter of unconventional energy resources, had Russia in mind.

“Exploration of shale gas resources in Lithuania is a bid to secure as many alternative energy resources as possible, so that we could feel maximally safe in our own country from Russia’s political decisions on the matter…The position that is further defending Rolandas Paksas is useless to the state of Lithuania, and plays into the hands…I don’t you whose, but I have my guesses in that regard,” the pro-hydrocarbons MEP posted on his Facebook page.

The Justice and Order Party chairman, stripped of the presidential powers over perjury of oath back in the early 1990s through impeachment, has proposed to postpone the shale gas exploration bid for five years.

“The prospects of shale gas mining are pretty opaque because of the limited infrastructure, rapidly growing technical challenges and the harmful impact for our environment. Besides, the international interest in expanding hydrocarbons markets is altering. If we continue speeding up the competition, it can end up with failure and discrediting of our institutions. I believe that today we have to announce moratorium for shale gas exploration until 2020 rather than a new competition,” Paksas insisted.

“Party leader plays into the hands of Russia”

Exasperated, Mazuronis called his party chairman’s proposals “preposterous.”

“The logic is incomprehensible. It is as if saying: “Hey, let’s don’t do anything in that regards, let’s not produce anything just because someone might not like it or may not like it. This is preposterous, if not even worse,” the deputy chairman bristled.

Speaking to the Lithuanian news site Delfi.lt, he clarified that Paksas’ stance plays into the hands of countries that trade gas and oil.

“For us, the nearest country from which we are importing the resources is Russia…Oil and has exporters, definitely, do not want any competitors in the market,” Mazuronis said.

Some experts believe the Order and Justice Party leader exerts to press down on the incumbent Environment Minister, Kęstutis Trečiokas, who is said to have some reservations over the hydrocarbons bid in the country.

“I believe that such a statement by Paksas is as if a behest to the party’s delegated minister (not to pursue with the bid), and I believe that the order is unuseful to Lithuania,” the former Lithuanian Environment minister is convinced.

Valentinas Mazuronis, a heavy-weight player in the Lithuanian politics, is expected to leave the party amid a range of disagreements with the party leader on the country’s core issues, one of which is the take on shale bid.

“I really cannot deem Paksas a team man. In fact, I am not working with him now,” Mazuronis told, but stayed short of saying he is to leave the party embroiled currently in a graft scandal.

“The hydrocarbons situation is new”

Meanwhile, Paksas insists he cannot comprehend his vice-chairman’s approach towards hydrocarbons.

“Look, the situation has entirely changed now. The price of crude oil has fallen. Many shale companies are simply going bankrupt. To keep differentiating all politicians according to the take on hydrocarbons in pro-Western and pro-Russian politicians – that is what really preposterous. Today the shale extraction technology is too precarious for a land like ours. This is my stance,” Paksas counter-argued in defense.

He insisted he can tolerate various opinions within the party ranks, but rebuked the party deputy chairman for not sticking with the party’s “collective line” on the issue.

Paksas revealed he has spoken to the incumbent Environment Minister and shared his concerns over the prospects of hydrocarbons in the country, but denied it had anything to do with “any pressure.”

“I asked him straight whether he (minister) believes that now a right time is to announce a repeated tender for shale gas exploration. He told me that he did not think so, and that the notion had come from the Lithuanian Geology Service,” told Paksas.

Paksas supporters have come in defense of their leader, arguing the shale issue lacks scrutiny and insisted that Mazuronis’ combative mood is all about a crappy retaliation for the party’s refusal to propose Mazuronis’ son Andrius, a Lithuanian legislator, to take reigns of the country’s Ministry of Internal Affairs.

Both Mazuroniai have vehemently denied it.

“Lithuania needs to know what it has underneath”

Speaking to Natural Gas Europe, former minister  Mazuronis said that doubts of the kind that the Order and Justice Party chairman has could be “understandable” in lips of an ordinary man who does not have access to additional information on the issue.

“But now that the party chairman seemingly has not devoted any time to make any research on the issue, he cannot chair the party, I believe. But the case is not that, I am pretty sure. He definitely has enough information and can get it. I do believe that every politician, affirming that we do not need to find out whether we have any alternative energy resources, or, even theoretically, doubting the possibility, has his own interests. They can be related with the companies supplying Lithuania gas, or even entire states, where the companies are. Without doubt, I am talking about Russia,” the MEP commented.

He called bankruptcies, including those in hydrocarbons market, “a normal thing” which does not make any alteration to the gist -  Lithuania needs to know what it has underneath.

“I really would not like to exaggerate the fact that Chevron pull out from Ukraine. As much as I could learn about it, the withdrawal is exactly over the same reasons we had in Lithuania: opaque legislative basis, permanent changes of hydrocarbons legislation and taxation and absence of general politics on the issue. Ukraine had pledged to pass by the end of November all the necessary amendments to its laws and set out tax policies for the bid, but it has not done it. Sure, I do understand that Ukraine is at war and deals with some other grave problems, but such company as Chevron cannot wait long. In addition to the reasons, the resistance of local authorities- not communities’ like in Lithuania, notably - in the planned mining sites has also played a role. Besides, Ukraine deals with big corruption and the local authorities do not have any experience as to how work with that level players like Chevron. If paybacks still is prevalent there and the businessmen must slice off a piece of the fortune to various flunkies, be sure that Chevron would have never put up with that… I think that Lithuania has learnt its lessons from the mistakes and are in better shoes in terms of investing” Mazuronis told Natural Gas Europe.

“Should tender be put off, it will be the political will”

Mazuronis says there are no “objective reasons” not to announce a repeated shale tender now.

 “If, for some reason, it is not announced yet in this half-year, it then will be a matter of the political will, or rather the political impotence. It is childish to believe that there might be no participants in it. And if this happens, well, it’s not a big deal. We will know at least that we have disinterested investors of that kind, and that is a good thing to know, too…The argument and fear that no investor may come forward because of the fallen crude oil price is unsubstantiated, too. Just because the period from exploration to industrial mining, if it whenever happens, can last not a single year. No one can tell today what oil prices there will be in the market in four or six years from now,” Mazuronis told.

Lithuania’s Political Council has to weigh in

Meanwhile, Daiva Matoniene, deputy minister of Lithuanian Ministry of Environment, told Natural Gas Europe that she “is not sure” whether the Ministry will be in time in drawing up the conditions for a new shale tender in the country.

 “The work is still in the pipeline. It is too early to predict whether the Ministry-set Shale Commission will be able to complete it by the end of the month. Besides, the new geopolitical situation affecting the energy markets must be also taken into the consideration. Due to its nature I believe that the Lithuanian Parliament’s Political Council has to deliberate it first. But the tentative conditions will be ready for January 26,” the deputy minister told.

She hinted that “as far as she knows” there are “different positions” in the Council on the country’s new shale gas bid amid the rampant fall in gas prices.

 “There are opinions among others that now it is the best time for that kind of investment. Personally, I believe that the gas price fall will not last forever, so the shale gas competition must be given green light.”

Matoniene insisted that the spat between the two renowned Lithuanian politicians does not affect “in any way” the ministerial discussions on the issue.