“Chosen by the Times”

Less than two months have passed since Viktor Chernomyrdin’s death. He was both spectacular and influential as a politician, statesman, and administrator. He spent eight years as Russia’s Ambassador to Ukraine and the Russian president’s special adviser on economic cooperation with CIS countries in his twilight years.

His memoirs Chosen by the Times will be put out by Moscow’s Khudozhestvennaya Literatura Publishers toward the end of December. It is a collection of dialogs with Yevgeny BELOGLAZOV (Ph.D. in History, Chernomyrdin’s long-term trusted aide) and Petr KATERINICHEV (writer, deputy editor-in-chief, Raduga magazine).

Writing the book was easier said than done. Chernomyrdin didn’t like interviews. His schedule was tight and he could hardly find the time for such conversations… At times our discussions started in the evening and ended late at night. He told us about his childhood, youth, the establishment of the USSR and then today’s Russia as a powerful state. He was brief and to the point at first, but later he enlarged on the subjects, adding interesting stories in his special, vivid and precise style.

Chernomyrdin was a self-made man. He was born to a big Cossack family in Chernyi Otrog, a backwater Russian village; he worked as a director of Europe’s largest gas-processing facility, then as a minister of the Soviet Union, and later as the head of the government of the Russian Federation.

Chernomyrdin is the main author of this book, as a skilled and interesting interlocutor. This can be seen in the following excerpts from the book, kindly supplied by Yevgeny Beloglazov.

PERESTROIKA

“Perestroika, gospriyemka (government standards of accepting end products), uskoreniye (accelerated development rate), glasnost, and pluralism are all slogans dating back to the Gorbachev period, with many young people knowing them only from history textbooks. Therefore, we consider it our duty to remind the reader of their background. The actual result of the perestroika campaign was the collapse of a very big, economically powerful country. Whatever all those ‘theoreticians’ have to say about all empires falling apart, sooner or later, this used to be our powerful country. Its fiasco was a tragedy for millions, the result of mistakes, miscalculations, perhaps treacherous acts on the part of some individuals…

“The dry law [imposed by Gorbachev’s administration] cut [Soviet budget] revenues by about one-third, with the lion’s share being spent on space exploration, while the Americans outsmarted us, by luring us into the Star Wars game that cost us a fortune; we had to spent billions on the Buran project, an analog to the US Shuttle… with what’s left of Buran rusting, exposed to the elements…

“Americans dealt another heavy blow to the USSR in 1988, by making a deal with the OPEC countries, so that the price of a barrel of oil dropped from 30 to 12 to 8 dollars, breaking the Mingazprom [i.e., the Soviet Ministry of Gas and Oil Industry] perhaps the only source of hard currency, and forcing the USSR to start selling its gold reserves…

“Then came the time of overall short supplies in the economic sphere, including cigarettes, soap, detergents, other basic consumer goods. Empty shelves in all stores. Followed August 1991…”

What did Viktor Chernomyrdin do in what was then described as a “fateful period?” More on this in our long conversations.

* * *

“I was appointed Minister of Gas Industry of the USSR in February 1985. Mikhail Gorbachev became General Secretary of the CC CPSU, in March.

“By the mid-1980s, it was clear to one and all that something had to be done to raise the living standards. How? It was also clear that people in the ‘stagnating West’ lived in a different, better way. The Iron Curtain was still there, seemingly solid, yet [people on the Soviet side] began hearing and seeing things, making comparisons. While the [Soviet] living standard appeared to be raising — and it was, compared to the 1950s and 1960s — the big question was: Compared to what standard? People could watch French and Italian movies, they saw the difference between the living standards, and they discussed them…

“I might as well mention that I heard such questions not on a train but at the CC CPSU, in the mid 1980s. Life itself demanded changes for the better. It was then that Gorbachev appeared. Once again, after Kosygin, we started hearing about restructuring, economic growth, its effectiveness in raising the living standard for the working people. That was when the people were looking forward to a new political leader who would make changes for the better and lead them on the path to progress.

“I readily admit that Gorbachev enchanted the masses at first. He walked the streets, spoke without reading; he cut an arrestingly cultured figure. He was the youngest member of the geriatric Politburo (with most members being past 70). But then we started paying closer attention to what he was saying: non-stop rhetoric! Repeated hot-air sessions!”

Did you meet with Gorbachev in his new capacity?

“I was a member of the Central Committee. I used to make notes during plenary meetings, to single out the important issues; I was given documents… Then I would summon the board of the ministry to set the tasks in view of the newly formulated guidelines — only to discover that there were none whatsoever; nothing but slogans and rhetoric, although every such plenary meeting would be described by the [Soviet media] as ‘historic.’

“I remember Gorbachev’s long trip to Western Siberia in the fall of 1985. First, to Tyumen, then to Novy Urengoi, and the final conference in Surgut. Needless to say, all Soviet and Party authorities were in attendance…”

What about the gas industry after you became minister?

“It started registering an unprecedented growth rate… In the late 1980s it had become in vogue to describe the previous years as marked by stagnation, with no progress whatsoever… I can tell you for sure that there was no stagnation in the gas industry. On the contrary, we developed a huge, internationally unprecedented system. In fact, it is still unmatched. We built gas-processing facilities, among them the Orenburg-Zapadnaya-granitsa, Urengoi-Zapadnaya-granitsa networks that supplied gas on a large scale to Western Europe and Soviet regions.”

We know that the industry started developing after the Second World War.

“That’s true. The first 332-mm-diameter Saratov-Moscow Pipeline was built in 1946, stretching for 843 kilometers. It was welded and placed in a record time of 225 workdays. This project was a giant joint effort, involving collective farmers from Saratov, Penza, Ryazan, and Moscow oblasts, workers from Moscow, former Red Army men captured by the Nazis, then interned in the USSR, German prisoners of war. The trenches for the pipeline were dug manually, and Moscow started receiving gas on June 11, 1946.

“Gas fields were discovered in Ukraine soon afterward. The Dashava-Kyiv Pipeline was built, this one with a larger diameter: 529 mm, using upgraded technologies.

“Let me stress the role Ukraine has played in the formation and development of the gas industry of our single country, the USSR. Ukrhazprom was the largest organization department of the Ministry of Gas Industry of the USSR. I knew its first head, Oleksandr Tumanov, Hero of Socialist Labor, we often met during board meetings.

Ukrhazprom was followed by Orenburggazprom and Tyumengazprom, but these were of different scale. The first, longest and ramified gas supply networks were in Ukraine, although not all regions of Ukraine — and Russia, for that matter — received this gas. It was supplied to the largest industrial centers, to meet the needs of the local production facilities, but then we started paying more attention to gas supplies to the population — primarily in Ukraine and the European part of Russia. There was no gas extraction in the Urals and the eastern parts of the USSR. In the 1950s and 1960s, Uzbekistan, Ukraine, and Saratov oblast (Russia) were the main gas suppliers.

“How and when Gazprom was formed? In 1989, as a government-run concern, under a resolution of the Council of Ministers of the USSR. This was preceded by a huge amount of preparatory work. A huge effort was — and is still — being made to upgrade it.

“Mingazprom existed until 1989, with capacious branch facilities in Ukraine, Central Asia, Transcaucasia, the Volga region, Western Siberia, the Urals… with thousands of people on payroll, with their [ethnic] traditions and long history.”

Under a Decree of the President of the Russian Federation (November 5, 1992) and a Resolution of the Council of Ministers and Government of the Russian Federation (February 17, 1993 signed, among others, by Chernomyrdin), the government-run concern Gazprom was reorganized as Russia’s public corporation under the same name. In 2010, it is a far cry from what it used to be two decades ago, let alone earlier.

“Gazprom was created after WW II, through a huge time- and energy-consuming effort on the part of tens of thousands of rank-and-file Soviet citizens, among them Russians, Ukrainians, Tatars, Bashkirs, Armenians… Today, as previously, the Gazprom leadership is working hard to implement the official policy aimed at protecting national interests.”

For us modern people, there is no question about the importance of gas supply, as this spells progress in production and daily life. Our next question was well to be expected, but his answer left us in suspense.

Gas supplies replacing coal. A step forward, isn’t it?

“Even when gas started being supplied, not all of the local administrators wanted it. I remember V.I. Khalatin, one of Gazprom’s energetic departmental heads. He visited regions and tried to talk the local managers to switch to gas supply, only to be confronted by objections, along the lines of ‘you want to blow us up!’ He kept talking but they wouldn’t listen. Even the thermal power stations objected to gas supplies; they simply didn’t realize the benefit. There were other objections. Nikolai Tikhonov, the future Chairman of the Soviet of Ministers of the USSR, then chairman of the Dnipropetrovsk regional economic council, said at one of the sessions: ‘OK, we switch to gas now, but are we sure we’ll have enough? We aren’t.’

“Even the top-level political leadership wasn’t sure. The situation essentially changed after Alexei Kosygin became Chairman of the Soviet [Council] of Ministers of the USSR. It was thanks to him that a big breakthrough was made in the oil, gas, and power engineering industries. This should be remembered.

“This was a matter of energy security, the crucial matter of economic development in the USSR. Without the energy base we would get nowhere. That was how Kosygin formulated the problem and went about solving it with his inherent determination, energy, using every possibility he had as head of government. Let me tell you again: I thank my stars for having worked under his command. He was an outstanding and hard-working person, a remarkably clever and farsighted administrator. Communicating with him was a postgraduate course in responsible, strategic managerial thinking.

“Kosygin set a number of tasks and monitored their implementation. To repeat myself, the construction of the Orenburg gas complex was his idea. The USSR’s energy base issue could then be partially resolved using the Orenburg and Medvezhye gas fields, with all equipment being bought with hard currency.

“The initial gas fields that used domestic equipment were markedly unreliable; there were frequent explosions. The complex gas treatment facility exploded in Orenburg and the gas pipeline feeding the Zayinskaya Thermal Power Plant in [what is currently] Tatarstan often exploded.

“This damage to equipment and pipelines was due to massive corrosion caused by hydrogen sulfide and an otherwise aggressive environment. The [Soviet] government decided to buy all the equipment for the Orenburg complex from France. At the time, the industry of the country [i.e., the USSR] lacked the experience; besides, there was no need to manufacture this kind of equipment for acid and [otherwise] aggressive environments. At the time such high-hydrogen-sulfide-level gas fields were only being developed in France and Canada.

“Kosygin personally solved all problems relating to hard currency payments. Huge material-technical and finance resources were involved in the creation of this gas transportation system. Gas fields were developed in the south of the country, specifically in the Stavropol and Krasnodar regions, as well as in Ukraine (Shebelinka gas field) and in Uzbekistan (Gazli gas field), while prospecting for discovering large deposits in Turkmenistan.

“Serious attention was being paid to the new industry, but the problem was that the country didn’t produce most of the required gas and oil extraction equipment and lacked relevant experience. This industry lacked large diameter tubes, gas compressor units, reliable high pressure valves, so all this had to be purchased abroad, which was easier said than done.

“Now I can say that the government at the time was torn by turf wars, between the factions battling over finance and other resources, each seeking its selfish, bureaucratic benefit in the defense, agrarian, machine-building, space exploration, and other sectors. Besides, they [in the West] weren’t overenthusiastic about selling the kind of equipment we needed. Then they imposed an embargo on trade with the Soviet Union, listing a number of affected commodities.

“The Americans had done their job well and it happened precisely when the gas transportation system was at the peak of the construction effort. All this forced us to master the output of the equipment we needed using domestic production facilities. We had to build and launch high-rate transportation pipelines and gas-pumping plants. A steelworks was built in Chelyabinsk within a short period of time and a 1,420-mm-diameter pipe plant started being built in Ukraine (it was also designed to manufacture smaller-diameter tubes for the oil industry).

“At this point, I wish to express my gratitude to our scientists. Our research centers worked out all of the projects that were implemented in our gas industry. We had never invited any [expert from abroad] because there was no need. It is true that we bought ‘hardware’ (to use the gas industry parlance), but only until we mastered our own manufacturing techniques. All of the projects were developed by our research centers, among them Moscow’s VNIIgaz, Leningrad’s Giprospetsgaz, Kyiv’s VNIPIgazdobycha, and Donetsk’s YuzhNIIgiprorgaz. These were the main research centers that took part in the development of all the projects for the gas transportation facilities in the south of the Soviet Union, as well as in the north, in the permafrost territories, including the shelf projects. Needless to say, academic institutes [specializing] in other industries, and prestigious academic chairs dealing with various sectors were directly involved.

“I spent many years in Ukraine, in my professional capacity, and often met with the scholar Borys Paton [head of the National Academy of Sciences of Ukraine – Ed.], both at the Academy and [his] Institute of Electric Welding. We discussed various issues, he often visited our embassy to attend various projects, and we would now and then remind each other of the past friendly experiences.

“Let me stress that Paton has done — and is still doing — a great job as the head of the National Academy of Sciences of Ukraine. He is still a full-fledged member of the Russian Academy of Sciences, and remains a good friend of my country.

“Paton has made a tremendous contribution to the development of Soviet metallurgy, especially in regards to the powder and welding technologies that proved remarkably effective in various sectors of the national economy, including machine-building and space exploration, especially in what concerned large diameter oil and gas pipelines.

“Paton-controlled institutes [Soviet research centers] developed and then implemented the explosion pipe-welding technique. It was unique, something we’d never do without embarking on our 3,300-kilometer-per-year-gas-pipeline projects.

“Paton, a celebrated scientist, was conferred the highest awards of the Fatherland in recognition of his outstanding merits. He has two ‘Hero of Socialist Labor’ medals, and a ‘Hero of Ukraine’ Order [awarded after the USSR’s collapse, in independent Ukraine – Ed.]. He deserves all of them. He didn’t have to knock on all top-level office doors before they opened and was welcomed there.

“There were twists and turns in our relations. In the mid-1980s, we were building a number of large-diameter gas pipelines. At the time our domestic production facilities could not supply us with what we needed, so we had to buy it abroad, mostly from Mannesmann AG in Germany, but also in Japan, Italy, and elsewhere.

“Needless to say, each such purchase cost a lot in hard currency, but then Paton proposed to manufacture the kind of tubes we needed, using domestic metals, and make them three-layered, so they could endure high pressure.

“He talked Nikolai Baibakov and Boris Shcherbina into his project. We first agreed on a pilot project, so we could see how all this worked during field tests.

“We tested a 20-km pipeline in the north, in the vicinity of Nadym. The findings showed that the tubes were, of course, three times heavier [than those in Europe] and that transporting them and placing them in the trenches was very difficult; above all, that manufacturing such three-layer tubes and meeting all the technological requirements was practically impossible, that welding three-layer joints was easier said than done. Experts at the research centers were unanimous in saying that the project was a fiasco.

“Paton repeatedly visited Mingazprom, telling me that he had a reliable kind of pipeline, that the tubes could be made by domestic steelworks, that this would cost less and save a great deal of hard currency, which was needed for other sectors of the national economy. His reasoning sounded nice, his intentions were good, except that the tubes in question didn’t meet modern standards; they could not be repaired and their performance was unreliable.

“After long discussions at all [executive] levels, Nikolai Ryzhkov, Chairman of the Soviet of Ministers (Sovmin) of the USSR, placed the issue on the agenda of the Sovmin’s Presidium. The ensuing debate was stormy — which confirmed the need to debate at this level — with both sides substantially arguing their case.

“Mingazprom was responsible for reliable supplies of fuel and raw materials to the national economy, particularly in terms of fuel and raw materials for the chemical and oil-processing industries, fertilizers for the agrarian sector, the implementation of expensive contracts on fuel supplies to European countries, so we couldn’t agree to pipeline projects covering hundreds of thousands of kilometers, knowing that the tubes didn’t meet technological standards.

“For us, such tubes had to be reliable and enduring, made with one or several layers, even if made of timber, so long as they met technical and performance standards.

“It was then that the head of the government summed up the debate, saying that the Ukrainian Academy of Sciences, particularly the Institute of [Electric] Welding had done a great deal to help develop the oil and gas industries and implement progressive technologies, but that the pressing issue of manufacturing larger diameter tubes had to be revised.

“I remember Ryzhkov exclaim, after hearing a capital investments report during a Sovmin meeting, ‘What are we doing? We’re letting mind-boggling sums go down the drain!’ I told him there was an alternative, but then we wouldn’t have the same amount of gas and, consequently, hard currency.

“The oil industry consumes lots of money. Many of those who are discussing gas prices don’t understand this, or pretend not to.

“If only it were as simple as drilling and starting extraction. First, you have to prospect, develop, build an infrastructure, production/processing facilities, roads, rail tracks, and then keep them ticking. This takes billions [of rubles], for this also involves the construction of settlements alongside the pipeline, towns, and utilities, with an eye to the severe weather conditions.

“Let me repeat myself: there was no stagnation in the [Soviet] gas and oil industries. Back in the 1970s-1980s, we created a unique energy development, extraction, and transportation system.

“The ‘generation change,’ to use the current media parlance, set in after I headed the Ministry of Gas Industry of the USSR. It happened in 1985 and I found myself to be the youngest member of the Soviet Cabinet.

“This change took a smooth course, considering that the industries were supervised by experienced battle-hardened veterans, top-notch experts in the field…

“The peak of gas extraction and industry took place in the 1980s, when the annual gas yield amounted to 600 billion cubic meters, the world’s highest.”

To be continued in the next issue