Siberia Pipeline

by Eugene Simonov and Jennifer Castner,
Ukraine War Environmental Consequences Work Group

Over the last several decades, Russia has sought to expand its customer base for natural gas exports, efforts which necessitate the construction of pipelines from fossil fuel deposits in Russia’s north to Europe and China. At the same time, fossil fuel exports are a valuable tool for Russia’s geopolitical influence. Since the start of the war in Ukraine in 2014 and the full-scale invasion in 2022, the economic and political stakes have skyrocketed. Russia’s national and regional green movements have played a vital role in decision-making about pipeline routes and negotiations in parallel. In the last few years, however, their activity has attracted increasingly harsh scrutiny from the Russian government, which has seen a growing number of organizations branded “undesirable” or declared “foreign agents.”

Reducing gas dependency
Since the mid-1970s, the economic prosperity of the USSR and then Russia has been based on the export of oil and gas to the West. After Vladimir Putin came to power, Russia acquired the status of an “energy superpower,” and Moscow began to actively use energy exports as a lever of pressure to achieve its geopolitical goals.

Perhaps no country has suffered as much from Russia’s gas export ambitions as Ukraine. Several pipelines to Europe ran across the country, which frequently led to blackmail and mutual threats between Kyiv and Moscow over transit conditions. Seeking to circumvent its stubborn neighbor, Russia laid several new gas pipelines across the Black Sea and the Baltic, encouraged by NATO countries that had an interest in Russian gas and its resale potential. Neither mantras about climate obligations, nor the annexation of Crimea, nor transparent attempts at applying political pressure to consumers, succeeded in convincing Turkey, Germany, and even Ukraine itself to abandon Russian gas.

The full-scale invasion was a sobering moment for Europe, which decided to rid itself of this dependency and has largely succeeded. Imports of pipeline gas from Russia to the European Union in January-June 2023 were just a quarter of the previous year, at 11.7 billion cubic meters.

In comparison with the pre-war period in 2021, in 2023 natural gas deliveries from Russia to Europe have fallen by 85%, and Gazprom has been forced to reduce gas extraction by almosta quarter. Budget revenues from taxes and export duties on gas have almost halved, to 710 billion rubles in January-May 2023.

Today alternative sales markets for hydrocarbons are more important than ever for the survival of the Russian economy, but such markets require large volumes to be pumped through pipelines that have not yet been built.

The export of hydrocarbons has been a fundamental “cornerstone of the state” since the late Soviet era, and under Putin this dependence has only increased. One of the interesting features of the Russian environmental movement during the Putin era is its failure to wage campaigns aimed overtly at demolishing the state’s oil and gas export model.

Those who campaigned against the development of deposits in vulnerable areas, such as the Arctic shelf, often encountered the “repressive talents” of the Russian state. The persecutionof environmentalists shifted into a new gear with the punishment of all those who in 2013 expressed support for the arrested crew of the Greenpeace vessel Arctic Sunrise, seized by Russian special forces in response to protesters on an oil platform in the Arctic.

The most peaceful and successful campaigns were those in which environmentalists tried to protect vulnerable natural areas from the laying of oil and gas pipelines by redirecting them toward other potential routes. It is possible that the state and big business were more open to dialogue in these cases, since the focus was on finding alternative ways to export hydrocarbons, rather than preventing this export outright.

Pipes of victory
The first double victory to unite the environmental movement in Russia, from Moscow to Perevoznaya Bay in the Russian Far East, was won at Lake Baikal in 2001-2006. Buryatenvironmentalists initially resisted pressure from the YUKOS oil company, which was eager to build the Angarsk-Datsin oil pipeline to China via Tunkinsky National Park (which partly overlaps with Baikal Nature Territory). A feasibility study for the project was rejected by a state environmental review.

To the great relief of local environmentalists, the privately-owned YUKOS and its CEO Mikhail Khodorkovsky soon fell victim to state repression, but the rival state-owned Transneft then proposed an alternative oil pipeline project, Eastern Siberia—Pacific Ocean (ESPO), the route of which passed just 800 meters from the shore of Lake Baikal.

Literally all of the country’s large environmental organizations joined the struggle to save the lake, a water body containing 20% of the planet’s fresh water. Their collective triumph was marked by an intervention (which today seems grotesque) from Vladimir Putin himself, who at a conference in Tomsk sketched an alternative route bypassing Baikal 500 kilometers to the north.

The new route allowed the pipeline to also carry oil from the rich deposits of Yakutia, thereby boosting the project’s profitability, but the environmentalists received no thanks for this.

This episode forced big business and government agencies to start establishing dialogue with environmentalists early in the planning process. In 2006 the company TNK-BP began working on a plan for an export gas pipeline from the Kovykta field to China, with one of the proposed routes passing through the same Tunkinsky National Park. But the company agreed on a procedure to work jointly with leading environmental organizations to evaluate alternative routes for a gas pipeline to China. Although TNK-BP abandoned the project as a result, the report probably helped to choose a route for the future Power of Siberia gas pipeline that caused the least environmental harm, essentially tracking the already built ESPO oil pipeline.

Unfortunately, there is little reliable information in the public sphere regarding Beijing’s preferences on the location of pipelines, but they were undoubtedly of great importance when choosing any of the export routes to China.

Altai – ‘Power of Siberia 2’ pipeline
The next pipeline scheme to require action from a coalition of environmental organizations was not long in coming. Russia’s central idea as an “energy superpower” was the creation of a gas transportation system that would allow gas to be supplied to both Europe and to China from the same fields. Fed up after the wrangles in Ukraine, Gazprom decided to avoid using transit states by running a pipeline directly to China, via the high-altitude Kanas pass in the Altai Mountains.

In early 2006, Russia and China jointly announced plans for a natural gas pipeline stretching from Russia’s Yamal Peninsula in the Arctic south through Siberia to the Altai Republic, a remote tourism hotspot in southern Siberia, before crossing directly into China just west of Mongolia. There, the pipeline was to cross the Ukok Plateau, part of the Golden Mountains of Altai UNESCO World Heritage Site and a sacred place for several Indigenous peoples in the larger region, before entering China’s remote Xinjiang-Uygur Autonomous Region, far from Chinese population and industrial centers. Both countries were motivated to eliminate intermediaries (such as Mongolia or Kazakhstan), but Russia had much more riding on potential profits and replacing lost European demand.

China, for its part, had not yet agreed on a price tag, and at the regional level, rumors persisted that China instead preferred to build a road or rail network and thus gain direct overland access to markets in Western Siberia and European Russia. On the other hand, it seems clear that China considered a number of different risks when considering its options, including civil unrest in the Xinjiang-Uygur Autonomous Region (which the pipeline would cross) and its concern that such an international corridor could make the border more permeable for “extremists.”

Despite Gazprom’s efforts to present a “shovel-ready” project to China, the environmental movement in Russia launched an effective and coordinated “Save Ukok” campaign, calling for consideration of alternative routes less fraught with the potential for environmental and cultural damage while also skewering Gazprom’s misleading marketing of the project’s supposed benefits to communities along the proposed route. The broad-based coalition included diverse stakeholders: local leaders and NGOs, environmentalists, scientists, the World Wildlife Fund, Greenpeace, UNESCO, and other international organizations.

Negotiations continued fruitlessly until Russia’s 2014 seizure of Crimea, when the need to redirect gas exports away from Europe into China dramatically increased. Not long after, in spring 2015, the media reported that the Altai gas pipeline would be built earlier than the Power of Siberia pipeline, but bearing a new name: Power of Siberia 2. In 2016, Gazprom moved the route further east (out of Altai), meaning that the Power of Siberia 2 would pass through Mongolia before reaching China.

The rebranding of Power of Siberia 2 and the attempt to change the route of the pipeline were closely linked to China’s new Belt and Road foreign policy initiative, which aims to connect China to its neighbors through a network of “economic corridors.”

To maximize the benefits of the Chinese initiative, in 2014 the Mongolian government launched the Steppe Route program, which involved the laying of linear communications from Russia to China across Mongolian territory. Russia was also looking for a formula to match up its political and economic ambitions with the Chinese initiative. As a result, the three parties announced the creation of a Chinese-Mongolian-Russian Economic Corridor which would also take potential pipeline routes through Mongolia into consideration. Although the idea remained largely on paper, Putin took the plunge and ordered a still-doubtful Gazprom to study a route through Mongolia.

Foreign agents come to nature’s rescue
The annexation of Crimea coincided with intensified suspicion and repression against non-governmental environmental organizations in Russia—especially those who questioned the feasibility of increasing the extraction and export of natural resources. From 2014 to late July 2023, around 40 non-governmental organizations engaged in environmental activity weredeclared “foreign agents.”

Interestingly, 20% of those environmentalist “foreign agents” happen to be precisely those organizations that opposed the laying of a pipeline across the Ukok plateau and were engaged in protecting ecosystems and in environmental education in tiny Altai Republic. Admittedly, the Altai Mountains are one of the most important biodiversity hotspots in Russia, and therefore environmental NGO activity in the region was much higher than the Russian average, but this only partly explains such a high percentage.

According to the Eco-Crisis Group, seven Altai regional organizations have ceased their activities since 2015 as a result of being declared “foreign agents.” The first international environmental organization to be declared “undesirable” was Pacific Environment in 2018. The group had also been an active defender of Ukok, and faced a full ban on its activity in Russia. In 2023 other key defenders of the Altai were declared “undesirable” by the Russian prosecutor general: WWF, Greenpeace and The Altai Project—an American NGO run by Jennifer Castner (one of the co-authors of this text).

The longstanding successes of the Save Ukok campaign in the 2010s to reroute the pipeline seem to continue to irritate Russian officialdom. Today, the route through Altai is a sort of Cheshire Cat—winking in and out of sight as Russia’s priorities change. More was to come.

Gas, China and the war
The potential rerouting of the pipeline through Mongolia is a clear victory for its diplomacy. Nevertheless, Mongolian NGOs are extremely skeptical about the project, known in Mongolia as the Soyuz-Vostok pipeline.

“I do not think it wise for Mongolia to acquire another $4-8 billion of foreign debt to add dependence on Russian gas to existing painful dependence on energy and petroleum products,” says Sukhgerel Dugersuren, director of the NGO Rivers without Boundaries Mongolia. “Environmental and social costs are likely to be huge with plans to build pipelines as close to key consumers and/or shortest possible distance through densely populated areas.”

Mongolia does not really need Russian gas, since it can easily provide itself with solar and wind energy, and it has plenty of its own gas in coal seams. As for the political risks, Mongolia is carefully watching the fate of Ukraine (and Belarus), knowing full well that a common pipeline could create an irresistible desire among its two great neighbors to establish tight political control over the transit country.

For Russia, the new pipeline is steadily growing in importance. By launching its full-scale invasion of Ukraine in 2022, the “gas superpower” has lost European markets, making it imperative to complete Power of Siberia 2 in order to export the resulting gas surplus to China.

The trouble is that it appears China is afraid to invest in this project and is unwilling to determine the parameters of the deal. Beijing has little desire to increase its dependence on Russia while Moscow is bogged down in a war. According to Bloomberg, at a meeting in Moscow in March 2023, Xi Jinping refused to commit to increasing Russian gas imports, despite Vladimir Putin’s proclaimed intention to quadruple gas exports to China to 98 billion cubic meters per year by 2030. Since the war began, the only project Russia has agreed to with China was the creation of a small new gas pipeline from the Far East with a capacity of up to 10 billion cubic meters per year. There is a risk that this pipeline will violate valuable conservation zones, such as a specially protected natural area in the Ussuri River floodplain.

Instead of deepening cooperation with Russia and Mongolia, China has begun to show renewed interest in completing the fourth line of the Central Asian gas pipeline from Turkmenistan, where the weak economy urgently requires injections of external capital. It is highly likely that by placing the two countries in a situation where they are in fierce competition for the right to build an export pipeline, President Xi will win concessions from both sides. Russia’s opportunities to reduce the price are limited by the war and sanctions, as well as by the already prohibitively low price of supplies through the Power of Siberia pipeline, the cheapest gas currently imported by China. Beijing is in no rush now, as its post-COVID economy is growing at a very modest pace and there are many options for meeting the slow growth in gas consumption.

Worried about China’s position, Russia is also trying to diversify gas export routes. Gazprom had planned by July 2023 to complete a preliminary feasibility study into supplying gas to the northern and eastern regions of Kazakhstan. According to Kazakh energy minister Almasadam Satkaliyev, the project will cost more than $4 billion and have a projected annual capacity of 40 billion cubic meters. Since no more than a quarter of this volume can be used in Kazakhstan itself, the parties are looking into the possibility of extending the gas pipeline to China. Whether Beijing sees this as an attractive option, however, is unclear.

Curse of the Tunka shamans
Despite the uncertainty, work is underway to prepare the route of the Power of Siberia 2 gas pipeline. In 2023, despite protests from Greenpeace and other NGOs, a maintenance corridor for a pipeline to Mongolia was projected to cross Tunkinsky National Park as part of a new zoning policy. In one of the last responses sent to Greenpeace Russia before it was declaredundesirable, Irina Makanova, director of the Department of State Policy and Regulation in the Development of Specially Protected Natural Areas, wrote:

“Please note that the national park is located within the administrative boundaries of the Tunkinsky district of the Republic of Buryatia, which includes 35 settlements. Supplying them with gas does not contradict the special protection regime governing national parks.”

Yet it is clear that the corridor bisects uninhabited virgin lands and is not needed to supply gas to any settlements. The government agencies concerned told exactly the same lies about looking after the local population’s interests ten years ago when developing a route through the Altai for a gas pipeline.

Like Altai, Tunka is a remote highland area in Buryatia, where untouched mountain areas are dotted with traditional places of worship that are considered sacred by the local Indigenous population.

This is the third or fourth attempt to bisect Tunkinsky National Park with a pipeline. Everyone who has previously tried, starting with YUKOS CEO Mikhail Khodorkovsky, failed, and their companies were either taken apart or forced out of Russia. With little experience in politics, local residents attribute this to a curse placed by a gathering of powerful Tunka shamans on anyone who attempts to dismember or desecrate their sacred lands. Other sources claim that YUKOS merely changed its mind and altered the route of the pipeline, bypassing the sacred places.

As we know, there were clearly other reasons for the failures of previous attempts to route a pipeline through the national park, such as persistent efforts by NGOs to propose alternative routes. Now, however, the experiment is pure—of all the protective amulets, only the shamans’ spell remains.

At the same time, today it is absolutely clear that the route through Tunka is not the only possible one. In 2014, Mongolian officials proposed, as part of the Steppe Route program, a more westerly corridor through Tuva that would combine a new railroad, gas pipeline, and high-voltage power line. As in the case of the gas pipeline through the Altai, Gazprom did not bother to open the choice of a new route to public discussion.

In July 2023, UNESCO published a draft decision on the Golden Mountains of Altai World Heritage Site, where it noted with regret that Russia has not officially responded to requests from the World Heritage Center to clarify what alternative route it has chosen for the Power of Siberia gas pipeline in place of the route across the Ukok plateau. It is possible that Gazprom does not want to rule out any of the potential options at present because of the high overall uncertainty with the sales market.

The idea of running a pipeline through Altai is clearly still alive, as evidenced by the inclusion of this particular gas pipeline across the Ukok plateau in the relevant section of Russia’s Federal Transport Spatial Planning Scheme, last updated in August 2022. Tellingly, the promising route through Mongolia is not even mentioned in this scheme.

NGOs under fire
Assuming that the intelligence agencies that run Russia are driven by rational interests, the recent purge of Greenpeace, WWF and the Altai Project can partly be explained by the fact that they have all previously helped Russian NGOs protect particularly vulnerable natural areas from being used for pipeline export routes. This hypothesis is confirmed by the fact that the Russian NGOs that persistently advised Putin not to build a pipeline through a World Heritage site were declared foreign agents and forced to shut down in 2015-16, right when, after the annexation of Crimea, the Russian government saw the urgent creation of an alternative to Europe-bound gas pipelines as an acute priority.

Perhaps now, when the war has again made the creation of new export channels critical, environmentalists capable of influencing the choice of pipeline routes are especially undesirable for the Russian authorities. At this point, they have been completely excluded from any involvement in public affairs in Russia, making even communication with them a potential crime. In current conditions, the destruction of all NGOs that have ever participated in campaigns associated with gas pipelines is unlikely to accelerate the creation of new export channels (but will clearly reduce the safety of projects).

In any case, this pipeline saga, which has dragged on for 17 years, does not solve Russia’s current problem with finding customers willing to buy its gas while it is waging an inhuman war. Even if the parties agree this year on the construction of the Power of Siberia 2 pipeline and find a mutually beneficial formula for financing the project, gas will start flowing to China no earlier than 2030.

The way events are unfolding, it seems likely that either China will supply its energy needs from different sources, or Europe will once again return to large-scale gas imports from a post-Putinist Russia, or some other development will occur to render the next “only possible gas pipeline route” worthless.


Translated by Alastair Gill

This story first appeared Sept. 10 on the website of the Ukraine War Environmental Consequences Work Group.

Photo: Power of Siberia pipeline
Credit: Gazprom via Asia Times

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Reprinted by CounterVortex, Oct. 27, 2023