{"id":1910,"date":"2025-03-09T02:40:31","date_gmt":"2025-03-09T06:40:31","guid":{"rendered":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/?p=1910"},"modified":"2025-03-09T02:44:32","modified_gmt":"2025-03-09T06:44:32","slug":"juhasz-on-trumps-fossil-fuel-shakedown-of-ukraine","status":"publish","type":"post","link":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/2025\/03\/09\/juhasz-on-trumps-fossil-fuel-shakedown-of-ukraine\/","title":{"rendered":"Juhasz on Trump’s fossil fuel shakedown of Ukraine"},"content":{"rendered":"\n

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<\/a>) and formerly secondary publications like Wired<\/em> and Rolling Stone<\/em>. The former has been doing brilliant reporting on the Musk-Trump axis<\/a>. Now Rolling Stone<\/em> has published an excellent cover story by Antonia Juhasz on the proposed U.S.-Ukraine “Minerals Deal.” <\/p>\n\n\n\n

In “Is Trump’s ‘Minerals Deal’ a Fossil Fuel Shakedown?<\/a>” 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<\/a><\/em>, and Ukrainian environmental lawyer and climate campaigner Svitlana Romanko<\/a>. 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. <\/p>\n\n\n\n

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.” <\/p>\n\n\n\n

In the article, she writes:<\/p>\n\n\n\n

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The deal would cut open Ukraine\u2019s natural resource veins, and could leave the majority of its key resources \u2014 including fossil fuels \u2014 under Russian control. Fifty percent of Ukraine\u2019s 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.<\/p>\n\n\n\n

It\u2019s 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.<\/p>\n\n\n\n\n\n\n\n

<\/p>\n<\/blockquote>\n\n\n\n

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

\n

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.<\/p>\n\n\n\n

Today, Ukraine produces critical minerals such as titanium (used in construction, airplanes, and other things) and is one of the world\u2019s 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 \u201crare earth minerals\u201d \u2014 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.<\/p>\n\n\n\n

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\u2019s largest gas storage capacity.<\/p>\n\n\n\n

In 2012, under the Moscow-friendly President Viktor Yanukovych, ExxonMobil and Royal Dutch Shell planned to develop Ukraine\u2019s 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\u2019s onshore gas fracking fields. After Yanukovych\u2019s ouster, Chevron exited Ukraine, reportedly motivated by a new administration\u2019s \u201cunfriendly tax environment.\u201d<\/p>\n\n\n\n

In 2014, Russia annexed Crimea, much of the rest of Ukraine\u2019s Black Sea coast, and much of Ukraine\u2019s industrial heartland in the eastern Donbas region \u2014 areas that also correspond with the bulk of Ukraine\u2019s fossil fuels, ports, and many other natural resource deposits. Exxon and Shell soon exited Ukraine, too. With Russia\u2019s 2022 invasion, Putin captured even more vital natural resources, including a large swath of Ukraine\u2019s rare earth deposits.<\/p>\n\n\n\n

The U.S.-Ukraine \u201cMinerals Agreement\u201d may have begun with a focus on rare earth minerals, but that is not where it ended. It covers all of Ukraine\u2019s natural resources and related infrastructure, and requires that half of all of Ukraine\u2019s revenues from the \u201cfuture monetization\u201d 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 \u201cpayback\u201d for money the U.S. has already spent on Ukraine.<\/p>\n\n\n\n

The U.S. could end up exercising a great deal of sway over the fund. The U.S. government holds \u201cthe maximum percentage of ownership of the fund\u2019s equity and financial interests,\u201d and \u201cthe decision-making authority\u201d of the U.S. government \u201cwill be to the extent permissible under applicable United States laws\u201d \u2014 though it\u2019s 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.<\/p>\n\n\n\n

Under the agreement, Ukraine\u2019s natural resource assets are expansively defined as \u201cdeposits 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).” <\/p>\n\n\n\n

<\/p>\n<\/blockquote>\n\n\n\n

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.  <\/p>\n\n\n\n

Juhasz continues:<\/p>\n\n\n\n

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There has never been an agreement like this before, potentially ceding unprecedented control over Ukraine\u2019s economy and vital natural resources to the Trump administration and by proxy to Putin. While a great deal about the agreement remains unclear, there\u2019s enough for Samantha Gross, Director of the Energy Security and Climate Initiative at the Brookings Institution, to describe the agreement as \u201cextortionist.\u201d<\/p>\n\n\n\n

\u201cWe are taking from the Ukrainians without intending to give them anything back,\u201d she says, shock filling her voice. \u201cIf we\u2019re not willing to give them a security guarantee, it just seems crazy,\u201d Gross tells me. \u201cIf 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.\u201d<\/p>\n\n\n\n

Popova, of McGill University, says that Zelensky \u201cprobably didn\u2019t 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 \u2014 they can restore and reset friendly relationships with Russia and at the same time take advantage of investing in Ukraine.\u201d<\/p>\n\n\n\n

<\/p>\n<\/blockquote>\n\n\n\n

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.”<\/p>\n\n\n\n

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Combined, these three nations alone produce nearly half of the world\u2019s daily supply of oil, and the U.S. and Russia produce 35 percent of its methane gas. Saudi Arabia has the world\u2019s 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\u2019s Mohammed bin Salman more than a world turned aggressively against fossil fuels.<\/p>\n\n\n\n

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\u2019s most dominant fossil fuel autocracies. He\u2019s implemented a radical agenda to bolster U.S. commitments to fossil fuels and undermine the global commitment to the green energy transition.<\/p>\n\n\n\n

Following Trump\u2019s conversation with Putin on February 12, Secretary Rubio and Russian Foreign Minister Sergei Lavrov laid the groundwork for \u201chistoric economic and investment opportunities\u201d resulting from \u201cthe end to the conflict in Ukraine,\u201d 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.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

As a result of sanctions and the aggressive efforts by many nations to reduce demand for fossil fuels, particularly from Russia, Russia\u2019s 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 \u2014 shifting much of its market to China and India \u2014 but is receiving far less money in return. With 40 percent of Russia\u2019s federal budget from oil and gas prior to the war, the toll on the economy has been significant.<\/p>\n\n\n\n

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\u2019s 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.<\/p>\n\n\n\n

Rex Tillerson, the CEO of ExxonMobil and later Secretary of State in Trump\u2019s first administration, carefully built up a close relationship with Putin, ultimately establishing 10 joint ventures between Exxon and Russia\u2019s state-controlled oil company, Rosneft, by 2013. In 2014, \u201cRussia was going to be Exxon\u2019s next mega-area. And the list of mega-areas in the world is very short,\u201d reported the Financial Times. As a result of these deals, Exxon Mobil\u2019s 63.7 million-acre Russian holdings were nearly five times larger than its second-largest holdings \u2014 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.<\/p>\n<\/blockquote>\n\n\n\n

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.<\/p>\n\n\n\n

The piece ends with environmental lawyer Romanko’s observation that \u201cwhen fossil fuels \u2014 not just metaphorically, but literally \u2014 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.\u201d<\/p>\n\n\n\n

The entire article is recommended and can be read here.<\/a><\/p>\n\n\n\n

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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 […]<\/p>\n","protected":false},"author":99,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[],"class_list":["post-1910","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pdPO21-uO","_links":{"self":[{"href":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/wp-json\/wp\/v2\/posts\/1910","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/wp-json\/wp\/v2\/users\/99"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/wp-json\/wp\/v2\/comments?post=1910"}],"version-history":[{"count":17,"href":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/wp-json\/wp\/v2\/posts\/1910\/revisions"}],"predecessor-version":[{"id":1928,"href":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/wp-json\/wp\/v2\/posts\/1910\/revisions\/1928"}],"wp:attachment":[{"href":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/wp-json\/wp\/v2\/media?parent=1910"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/wp-json\/wp\/v2\/categories?post=1910"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.uvm.edu\/aivakhiv-ukrtaz\/wp-json\/wp\/v2\/tags?post=1910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}