Poland was right. Today you are a model for others

You didn’t go along with the groupthink. Instead, you were able to adjust to changes and spot the warning signs in time. That is true leadership. And that is why Poland and its brave leaders are a worthy role model for Central and Eastern Europe, writes Jeffrey SONNENFELD

.In Greek mythology, Cassandra was a Trojan princess who uttered true prophecies of impending disaster but was never believed until it was too late.

This analogy is apt since in hindsight, Poland’s early warnings to the rest of Europe on the dangers of depending on Russian gas were not believed until it was too late. Now, Poland has proven incredibly prescient in the 18 months since the invasion of Ukraine, but fortunately, it is not too late for the rest of Central and Eastern Europe to change course and take a page out of Poland’s playbook moving forward. The challenge is one which is vital, as every day that European countries continue to depend on Russian piped gas is another day that Putin funds his coffers to wage war in Ukraine.

Just months before the invasion, energy experts, and political commentators were still ridiculously criticizing Polish leaders for their warnings on Russian gas. One prominent expert wrote, „opposition to Nord Stream 2 makes no sense,” and that „the notion that the interests of Ukraine or Poland, with its increasingly nationalist politics, should take precedence over Germany’s is hard to accept. Without German leadership, the EU will find it hard to remain committed to its founding values, including protecting Ukraine and Poland. Undercutting Germany…over a pipeline whose significance is vastly exaggerated makes little strategic sense.”

But now who is laughing? Russian-friendly German leaders, such as former Chancellor Gerhard Schroder who served on the board of Rosneft and actively lobbied for Nord Stream, have been humiliated, with their countries having paid the price for depending on Russian gas for too long. In contrast, Poland has not only been vindicated, but now represents a model for the rest of Central Europe in how to completely sever any and all economic dependence on Russian gas.

Just consider the economic near-miracle Poland has pulled off.  Different CEE countries are at different stages of moving away from Russian gas, and while most have reduced their dependence on Russian gas since the invasion, many continue to remain disproportionately dependent on Russian gas. Countries like Austria, Hungary, and Slovakia continue to depend on Russia for ~60% of their gas supply. In contrast, Poland has almost completely eliminated all dependence on Russian piped gas with a near 0% dependence. 

How Poland made this happen is a story with many transferable lessons, as the LNG Terminal at Swinoujscie, the floating FSRU terminal at Gdansk, and the Baltic Pipe are transforming Poland into a gas hub for LNG imports, particularly from US LNG. Combined with Poland’s status as a key transit country geographically, with gas pipelines connecting to neighboring countries, the transformative investments of the last few years mean that LNG is soon to fully replace Russian gas once and for all.

The most important takeaway ought to be that the challenge of European dependence on Russian energy is a challenge of political willpower, not technical constraints, supply limitations, or esoteric geology. In other words, it comes down to the willingness of political leaders to lead. Poland’s pivot towards gas sovereignty was wrought by several leaders who had the courage to make unpopular and even controversial decisions that have proven prescient in hindsight.

The idea of diversifying Poland’s gas supply leading to a break from dependence on the Russian monopoly was first initiated by the late President Lech Kaczynski over a decade ago. Polish gas operator GAZ-SYSTEM has been involved in implementing this strategy over the years and executing the late President Kaczynski’s vision. In 2016, the Swinoujscie LNG Terminal, today named after the late President, was put into operation. In turn, six years later, gas from the Norwegian shelf flowed into our country thanks to the Baltic Pipe pipeline.

But of course, GAZ-SYSTEM was far from alone in helping make President Kaczynski’s original vision a reality. Other leaders who had the courage to stand alone and move towards Polish energy sovereignty even when others criticized them include Minister Piotr Naimski and the continuators of the process, the plenipotentiaries for strategic energy infrastructure: Mateusz Berger and now Anna Lukaszewska-Trzeciakowska, and GAZ-SYSTEM president Marcin Chludzinski. These courageous leaders pushed through LNG projects to replace Russian gas in record time, showing that yes, despite the slings and arrows of critics, it is possible for every CEE country to pivot away from Russian gas – even when experts doubted them. Nevertheless they persevered, and the lesson ought to be that as Poland shows, the technical, financial, and geographic obstacles to replacing Russian gas are not as insurmountable as many experts would have you believe – and that Russian gas can be fully replaced once and for all far faster than experts previously thought possible.

Just last week, I gave a detailed speech on this topic at the Karpacz Economic Forum. An excerpt from my speech, as re-printed below, captures the importance of Poland as a model for the rest of CEE in ending Russian energy hegemony: 

„It turned out that Russia needs Europe more than Europe needs Russia. Outside of agriculture and commodities, Russia has nothing else. It’s like an old feudal system that merely brings goods to the table of the global market. How many of you reading these words drive a Russian car? How many use a Russian smartphone or computer?

So how has Putin survived all this? Where does he get the money for the ongoing war? He survives because he cannibalizes the leftovers, like those who keep the fire in the hearth by burning the furniture from the living room. He is trying to buy time in the hope of some kind of change in Western politics, such as the return of Trump, who favors him.

But Putin doesn’t have that much time left, the furniture will not burn forever. What happened in the energy industry leads the path on how to handle other areas.

According to the book A Man for All Seasons, before his death, St. Thomas More said that character is as fragile as having a liquid cupped in your hands, and that once you separate the fingers, it’s forever gone.

Poland, with the strength of character in the country and its people, always brings to mind this quote. What the rest of the world could learn from you is how to web those fingers together to preserve and fortify their character. Your country’s spirit shines through its development, its impressive buildings, the glory of Warsaw raised from the ruins of the Second World War, and, last but not least, your stunning landscapes. The beauty of Poland is breathtaking. I am honored to have seen it with my own eyes.”

In that same speech, I also detailed how energy experts often get their prognostications wrong more often than they like to admit, and how the cynicism of so-called „experts” should not discourage individual courageous leaders from making unpopular decisions when they have the conviction and principle to hold true to them. This was modeled by Poland’s pivot towards energy sovereignty starting with President Kaczynski, and even though energy analysts laughed at Poland at the time, now they are praising Poland for its foresight and prescience. 

„It must be made clear: many heads of state, government officials, and experts across various economic sectors were fooled by Russia’s propaganda. When we looked at the information Russia was providing, we found they were not making regular updates. Digging deeper, we came across data showing that the country’s economy is failing dramatically: retail is probably down over 60%, and most of the manufacturing sector, such as the automotive industry, has fallen by over 90-95%. This has, of course, severely weakened the country’s ability to wage war, although it is widely known that energy resources are the lifeblood of the Russian economy.

That’s what experts have always convinced us, anyway. But this is where it becomes very clear how many of them got it wrong, misjudging Russia’s ability to influence its political situation with energy resources.

Just two years ago, energy analysts, media commentators, and energy industry CEOs argued that Russia’s energy resources provided stability to the global energy industry and were crucial to Europe’s energy security. Poland was widely criticized when it opposed these claims and warned world leaders against dependence on Russian fuel. „Let’s be reasonable,” they said. „Nord Stream 1 and Nord Stream 2 are great projects that do not threaten our independence at all.” But by some miracle, Poland, and the Baltic states had limited confidence in these initiatives.

Some JP Morgan analysts claimed that Europe’s decision to stop using Russian oil would cause a $400 per barrel price hike. This, of course, never happened, even at times when prices were soaring.

Experts from Yale, Harvard, Stanford, Sorbonne, Oxford, and Cambridge spoke in similar terms. They believed Putin could shape global alliances and carry out a successful divide-and-conquer policy due to other nations’ reliance on his resources.

However, these analysts overlooked one small detail: gas is not interchangeable. Without the necessary infrastructure, sending it elsewhere is impossible. Piped gas requires pipelines to move, and Russian pipelines carrying gas towards Europe are hardly connected with its few pipelines moving toward Asia. In fact, Putin only has one gas pipeline carrying gas towards Asia at a fraction of the capability of the European pipelines. In other words, if Europe passes on Russian resources, it will deprive the country of important economic revenues, because without gas or oil pipelines – which are not built overnight – Russia cannot send them elsewhere.

The expert who noticed this was none other than a Pole, Michal Wyrębkowski, an analyst working in my team. It soon became apparent he was right. As were Poland and neighboring countries, which have extensive knowledge of Russian practices.

Erroneous expert opinions don’t cost them much. They can put their feet on the desk and think big thoughts, then go home with no accountability for their words. They can keep predicting without consequence. As the old saying goes, „If you can’t predict correctly, predict often”. But national leaders do not have the luxury of these false experts. They must make decisions and then take ownership of the consequences for themselves and their people. There is a cost to the kinds of opinions Poland had before the war in Ukraine when everyone around them believed differently, afraid of LNG and its potential price increase. But this technology is century old, even though it wasn’t commercialized until 2016 – at the exact time when Poland started to invest in it. And rightly so. Today, other European countries have followed your leadership, importing LNG from different directions.

Contrary to experts’ opinions and their predictions, Poland, and the Baltic were right to warn Europe and the world against becoming dependent on Russian oil gas. Poland got it right when the experts did not. And for this, Poland and its courageous leaders are worth celebrating as a model for CEE nations.

.You didn’t just go along with the groupthink and didn’t fall for the same old opinions and ideas repeated over and over again by the media. Instead, you were able to adjust to changes and spot the warning signs in time. This is what true leadership is all about.”

Jeffrey Sonnenfeld
Cooperation: Steven Tian