UKR-TAZ

As U.S. media have been softening their critical tool-kits under fear of retribution from the Trump administration, the lead in critical reporting seems to have been taken by a mix of individual bloggers (some of which I list here) and formerly secondary publications like Wired and Rolling Stone. The former has been doing brilliant reporting on the Musk-Trump axis. Now Rolling Stone has published an excellent cover story by Antonia Juhasz on the proposed U.S.-Ukraine “Minerals Deal.”

In “Is Trump’s ‘Minerals Deal’ a Fossil Fuel Shakedown?” Juhasz probes the details of the deal and interviews some well positioned experts — including the Brookings Institution’s Samantha Gross, who calls the deal “extortionist,” Maria Popova, author of Russia and Ukraine: Engangled Histories, Diverging States, and Ukrainian environmental lawyer and climate campaigner Svitlana Romanko. The article is paywalled, but Juhasz urges her readers in Facebook to “Please read, share, and act!”, so my sharing of large parts of it is an honoring of her request.

In that Facebook post, Juhasz notes that “Zelensky is on his way to Saudi Arabia next week, being forced into a corner by the unholy alliance of Putin and Trump and to sign an “extortionist” “neocolonial plundering” of Ukraine’s vast natural resource riches, giving Trump and Putin unprecedented control of fossil fuels and minerals.”

In the article, she writes:

The deal would cut open Ukraine’s natural resource veins, and could leave the majority of its key resources — including fossil fuels — under Russian control. Fifty percent of Ukraine’s future earnings from its remaining natural resource wealth would go into a new fund under U.S. direction into which the United States would contribute nothing. The deal could benefit American and other Western companies but would provide few economic and no security guarantees to Ukraine.

It’s a steep price to pay for peace, but Ukraine may be forced to accept the deal given how closely aligned the Trump regime has become with Russian President Vladimir Putin. Trump is also laying the groundwork for the full reentry of Russia into the global economy, opening the door to a return of U.S. fossil fuel giants into one of the largest pools of oil and gas in the world.

The article provides a useful historical perspective on Ukraine’s evolving energy policies and the role of energy in the conflict. Juhasz writes:

With support from the global community, Ukraine has made significant renewable energy progress in recent years to reduce dependency on fossil fuels and enhance energy security, adopting a National Energy and Climate Plan and National Renewable Energy Action Plan in 2024. Part of this plan is the development of its critical minerals used in the production of renewable energy technology, including batteries for energy storage and solar panels.

Today, Ukraine produces critical minerals such as titanium (used in construction, airplanes, and other things) and is one of the world’s leading producers of graphite (used in steel manufacturing and electric motors). It has large potential reserves of lithium (used in batteries, including electric vehicles), uranium (used in nuclear power plants and nuclear weapons), and may have substantial reserves of “rare earth minerals” — a group of more than a dozen metals used in many high-tech sectors, including in solar panels and electronics. There is, however, very limited data on these elements in Ukraine and it has not produced any to date.

Ukraine also has a century-long history of extensive fossil fuel operations, as it possesses substantial reserves of oil, gas, and coal. Prior to the 2022 invasion, Ukraine transited more gas than any other nation in the world, via an expansive pipeline network from Russia. After Russia, it has Europe’s largest gas storage capacity.

In 2012, under the Moscow-friendly President Viktor Yanukovych, ExxonMobil and Royal Dutch Shell planned to develop Ukraine’s deepwater offshore gas fields in the Black Sea. The following year, Chevron and Shell signed contracts valued at $10 billion a piece to develop Ukraine’s onshore gas fracking fields. After Yanukovych’s ouster, Chevron exited Ukraine, reportedly motivated by a new administration’s “unfriendly tax environment.”

In 2014, Russia annexed Crimea, much of the rest of Ukraine’s Black Sea coast, and much of Ukraine’s industrial heartland in the eastern Donbas region — areas that also correspond with the bulk of Ukraine’s fossil fuels, ports, and many other natural resource deposits. Exxon and Shell soon exited Ukraine, too. With Russia’s 2022 invasion, Putin captured even more vital natural resources, including a large swath of Ukraine’s rare earth deposits.

The U.S.-Ukraine “Minerals Agreement” may have begun with a focus on rare earth minerals, but that is not where it ended. It covers all of Ukraine’s natural resources and related infrastructure, and requires that half of all of Ukraine’s revenues from the “future monetization” of these resources be put into a Reconstruction Investment Fund jointly managed by the U.S. and Ukraine. The U.S. has made no financial obligation to the fund, which Trump views as “payback” for money the U.S. has already spent on Ukraine.

The U.S. could end up exercising a great deal of sway over the fund. The U.S. government holds “the maximum percentage of ownership of the fund’s equity and financial interests,” and “the decision-making authority” of the U.S. government “will be to the extent permissible under applicable United States laws” — though it’s not clear what level of control that means. The fund will also reinvest an undetermined percentage of its revenues in Ukraine to attract further investment.

Under the agreement, Ukraine’s natural resource assets are expansively defined as “deposits of minerals, hydrocarbons, oil, natural gas, and other extractable materials, and other infrastructure relevant to natural resource assets (such as liquified natural gas terminals and port infrastructure).”

There are, as we know, no security guarantees for Ukraine in the proposed agreement — which is the most glaring sign that the Trump administration cares little for Ukraine’s future and only wants its resources. At the same time, it is in the process of making deals with Russia, so whether those resources are on Ukrainian-controlled land or Russian-controlled land is presumably immaterial to U.S. interests.  

Juhasz continues:

There has never been an agreement like this before, potentially ceding unprecedented control over Ukraine’s economy and vital natural resources to the Trump administration and by proxy to Putin. While a great deal about the agreement remains unclear, there’s enough for Samantha Gross, Director of the Energy Security and Climate Initiative at the Brookings Institution, to describe the agreement as “extortionist.”

“We are taking from the Ukrainians without intending to give them anything back,” she says, shock filling her voice. “If we’re not willing to give them a security guarantee, it just seems crazy,” Gross tells me. “If we want to invest in Ukraine, then we ought to do this contract by contract, like you would normally when you invest in a country.”

Popova, of McGill University, says that Zelensky “probably didn’t expect the situation that we have right now, which is that it seems that the Trump administration thinks that they can have their cake and eat it too — they can restore and reset friendly relationships with Russia and at the same time take advantage of investing in Ukraine.”

Just last year, the International Energy Agency noted that “The biggest legacy of the global energy crisis triggered by Russia’s invasion of Ukraine may be that it accelerates the end of the fossil fuel era.” “Trump and Putin,” Juhasz writes, “have a very different agenda,” one that’s become visible in the meeting between U.S., Russian, and Saudi Arabian representatives on February, which infamously took place without any Ukrainian participation. “Maybe that should have been enough of a clue,” Juhasz notes, “about what this whole mess is really all about.”

Combined, these three nations alone produce nearly half of the world’s daily supply of oil, and the U.S. and Russia produce 35 percent of its methane gas. Saudi Arabia has the world’s second largest reserves of oil, while Russia has the largest gas reserves. There is very little that could undercut the individual power and influence of Putin and Saudi Arabia’s Mohammed bin Salman more than a world turned aggressively against fossil fuels.

Trump has built up close ties to Saudi Arabia and Russia both in and out of office, bringing the United States firmly into an alliance with the world’s most dominant fossil fuel autocracies. He’s implemented a radical agenda to bolster U.S. commitments to fossil fuels and undermine the global commitment to the green energy transition.

Following Trump’s conversation with Putin on February 12, Secretary Rubio and Russian Foreign Minister Sergei Lavrov laid the groundwork for “historic economic and investment opportunities” resulting from “the end to the conflict in Ukraine,” according to the State Department. Ahead of the talks, Russian Direct Investment Fund chief Kirill Dmitriev told reporters that the return of oil companies to Russia is inevitable.

On March 3, the White House directed the State and Treasury departments to draft a list of sanctions that could be eased for U.S. officials to discuss with Russian representatives, according to Reuters.

As a result of sanctions and the aggressive efforts by many nations to reduce demand for fossil fuels, particularly from Russia, Russia’s total revenue from all fossil fuel exports in 2024 were about half of those from 2022. Russia still produces and exports large amounts of fossil fuels — shifting much of its market to China and India — but is receiving far less money in return. With 40 percent of Russia’s federal budget from oil and gas prior to the war, the toll on the economy has been significant.

Public opinion, combined with sanctions, largely shut U.S. and other Western oil companies out of Russia and its vast oil and gas reserves. One boon of the rapprochement between the U.S. and Russia will be to Big Oil’s bottom line. ExxonMobil may be the largest beneficiary from reentry into Russia, and the company most in need of a return. It retains some of its largest Russian assets today. The company was forced to abandon its stake in the Russian Arctic offshore Sakhalin-1 project after sanctions hit, yet Moscow has twice extended the deadline for the sale, now pushing it to 2026.

Rex Tillerson, the CEO of ExxonMobil and later Secretary of State in Trump’s first administration, carefully built up a close relationship with Putin, ultimately establishing 10 joint ventures between Exxon and Russia’s state-controlled oil company, Rosneft, by 2013. In 2014, “Russia was going to be Exxon’s next mega-area. And the list of mega-areas in the world is very short,” reported the Financial Times. As a result of these deals, Exxon Mobil’s 63.7 million-acre Russian holdings were nearly five times larger than its second-largest holdings — its 14 million acres in the United States. With the imposition of sanctions in 2014, Exxon was largely shut out of these operations, and then fully shut out as result of the 2022 invasion.

And so we see who will be the ultimate victors of the war: Putin, Trump, and the fossil fuel industry they both support and are supported by.

The piece ends with environmental lawyer Romanko’s observation that “when fossil fuels — not just metaphorically, but literally — try to eliminate you from the planet, not just by climate destruction, but a very brutal and violent torturing way, people know that we must get rid of fossil fuels.”

The entire article is recommended and can be read here.