Speculation is rife about a nuclear accident in Russia’s north

The Bell

Hello! This week we try to separate fact from fiction in the mysterious nuclear accident just off Russia’s Arctic coast. We also look at how one of Putin’s best friends is in line to receive billions of dollars from Russia’s sovereign wealth fund, why Russia will lag behind the world in rolling out 5G, whether Moscow’s protest movement is falling apart and tell the story of how one Russian pilot saved 226 lives in a miraculous crash-landing.   

Speculation is rife about a nuclear accident in Russia’s north

The most disquieting news this week was the accident at a military training ground in Russia’s northern Arkhangelsk region. There is almost no official information about what happened, but there are few doubts it was a nuclear accident that occurred while testing a new weapon. The secrecy fuelled panic in Russia and in the West about a new Chernobyl. The Bell has filtered through what little information there is to piece together what happened.

What do we know?

  • On August 8, a nuclear accident took place on a platform in the White Sea during testing of what was almost certainly some kind of high tech weapon.
  • Onshore radiation levels rose quickly, although they never actually reached dangerous levels. The highest radiation readings in the port city of Severodvinsk exceeded normal levels by up to 16 times, according to officials. This is not catastrophically high.
  • Five people died in the accident. They were all employees of Russia’s premier atomic research center, located in the closed city of Sarov, which is owned and operated by state nuclear corporation Rosatom.
  • The tests had been planned in advance but something “unforeseen” took place, according to managers at the Sarov-based center.
  • It is unclear if there is any truth to Donald Trump’s claim that the accident happened during tests of the nuclear-powered cruise missile Burevestnik (SSC-X-9 Skyfall).
  • When speaking about the accident, Russian officials have tried to avoid using the word “reactor”. But the phrasing of Rosatom’s statement, which mentions “isotopic power sources in liquid propulsion systems”, suggests a reactor was indeed involved.

A new Chernobyl?

  • It seems likely there was no release of the most dangerous isotopes: in any case, no spike in radiation levels has been registered in neighboring Finland.
  • If there had been major nuclear fallout, it would have been detected all over the world by now. This was exactly what happened with a release of ruthenium-106 in 2017: Western scientists have now concluded that the source of the ruthenium-106 cloud that spread across Europe was a leak from Russia’s Mayak factory near the Ural mountains.
  • All this means that a Chernobyl-type accident can be ruled out.
  • We still do not know what exactly exploded. The level of secrecy is significantly higher than that around another of this summer’s catastrophes: in July, a fire on board Russia’s deepwater nuclear submarine Losharik led to the deaths of 14 sailors.

What was being tested?

  • Burevestnik: While experts have questioned why five scientists would be standing next to a missile being launched from a sea platform, a Burevestnik test has been the most widely-discussed version. The Burevestnik is a nuclear-powered missile unveiled by President Vladimir Putin to much fanfare last year: it has an unlimited range and is able to bypass enemy air defense systems. NATO believes there has not yet been a single successful test of such a missile, and experts say that it is prohibitively expensive and technically very challenging to build.
  • Skif or Tsirkon: If Rosatom is to be believed, it may have been a test of a ‘doomsday’ missile: either the Tsirkon, or the Skif (Scythian), both of which may use nuclear propulsion in the early stages of launch. Tsirkon is a hypersonic missile and Skif is a missile deployed from the seafloor.
  • Poseidon: Others have suggested (Rus) that it could have been a test of the driverless nuclear submarine Poseidon, which Putin also talked about for the first time last year.

Why the world should care

Even given Russia’s significant industrial disaster record, the summer of 2019 is the first time that two accidents involving secret nuclear objects have occurred within two months of each other. Given the Kremlin’s nuclear ambitions and the current level of corruption and bureaucratic irresponsibility, there is potential for many more similar accidents.

Putin’s sanctions-hit friend wants billions from Russia’s sovereign wealth fund

As economists in the Russian government argue over how to spend the surplus money in Russia’s sovereign wealth fund, The Bell has discovered that one of the leading contenders for the cash is Putin’s personal friend, billionaire Arkady Rotenberg.

  • In July, Russia’s sovereign wealth fund contained over $120 billion. According to Russian budgetary rules, once the fund’s holdings are equivalent to a certain proportion of GDP, the surplus may be spent by the government. In 2020, this surplus is forecast to be $60 billion.
  • The Bell has discovered that one project in line to receive the funds is closely tied to billionaire Rotenberg, Putin’s former judo sparring partner who was sanctioned by the U.S. in 2014. The project in question is a giant gas and chemical complex in Ust-Luga, outside of St. Petersburg, which will cost an estimated $35 billion. The price tag for the technical documentation alone is estimated to be $2.2 billion.
  • Half the project is owned by gas giant Gazprom, and the other half is owned by Rusgazdobycha, which was formerly co-owned by Rotenberg. Now, some of the company’s shares are held by a manager in a bank owned by Rotenberg, and others are held by mutual funds with undisclosed ownership structures. Rotenberg’s spokesperson said that he does not have any link to the company.
  • At first, Gazprom’s partner in the project was supposed to be international oil major Shell. But earlier this, Shell backed out. “One of the reasons for the breakdown of the partnership was the supposed participation in the project of companies close to a person on the sanctions list,” said a person close to Gazprom. After Shell’s exit, the secretive Rusgazdobycha stepped in.
  • According to a plan seen by The Bell, state-owned development bank Vnesheconombank will provide the funds in the form of a 5-year bridge loan, which it would pay back using money from the sovereign wealth fund. Gazprom would be expected to come up with half of the financing for the project.
  • The new gas and chemical plant may also receive other subsidies. The Bell has seen a letter written by Gazprom CEO Aleksei Miller to Prime Minister Dmitry Medvedev asking for “project of national significance” status. This would mean the project is exempt from customs duties and would receive tax benefits, but, most importantly, an official told The Bell that the government would provide a guarantee that the project was risk-free.

Why the world should care

Putin’s judo buddy is sanctioned and the whole country has to pay for it, in fact pay twice over: first by investing state money in his project, and second by suffering through the higher inflation that will result from such a huge cash injection into the economy.

Russia may fall years behind the rest of the world in building a 5G network

Russian officials are putting up obstacles to the development of new technologies even when there is no obvious security threat. This week, Putin approved a parliamentary ban on the transmission of 5G radio frequencies in the range used by the rest of the world.

  • Creation of 5G infrastructure is part of the national Digital Economy project on which the government will spend $20 billion. In most countries around the world, 5G will use the 3.4-3.8 GHz frequency bands as this is the most appropriate range.
  • Earlier this year, the Russian government duly asked Putin for the 3.4-3.8 GHz range. But now it turns out that this range has been allocated to the Ministry of Defense and state-owned space corporation Roscosmos. In other words, security officials refused to greenlight the handover of the frequencies.
  • It looks like the government will simply accept the substitute 4.4-4.99 GHz range for 5G in Russia. But it is not a fair swap: the entire world operates a different range and equipment for Russia’s chosen frequencies is not being mass produced. As a result, officials and mobile operators estimate Russia will lag up to five years behind the rest of the world in 5G roll-out.
  • “[Equipment] will appear in three to five years, but this will be too late. By then, 5G networks will be deployed even in the least developed countries of sub-Saharan Africa,” an official from the Ministry of Communications told (Rus) media outlet RBC.
  • One explanation is that the security officials involved may be looking to make some money. Something similar happened in the early 2010s when the range was determined for 4G. Then, the Ministry of Defense refused to give up the frequencies, instead creating a company that received them without a tender. The military partnered with businessman Vitaly Yusufov, who was close to then-President Dmitry Medvedev, to develop 4G but the project eventually fell apart.

Why the world should care

When you read about the Russian government’s plans to invest trillions in the digital economy and lead the world in artificial intelligence, be skeptical. Remember that security officials have a veto when it comes to any major high tech project — and they like to wield it.

Moscow’s protest movement looks to have hit a dead end

The protests over Moscow city legislature elections are now a month old and opposition leaders are facing difficult choices. Not only do street protests seem to have exhausted their usefulness, but independent candidates are still barred from the looming elections.

  • The most recent protest, on August 10, drew a crowd of between 50,000 and 60,000 people, but it is unlikely this can be replicated: the public’s interest will fade without visible results. Moreover, the security forces have a wealth of experience in breaking up unsanctioned protests, which fewer people attend anyway.
  • Opposition leader Aleksei Navalny, who is in jail until the end of August, appears to have anticipated the waning interest. On Wednesday, he said the most important thing now is not protests, but the elections to the Moscow legislature on September 8. As independent candidates have been barred, Navalny called on his supporters to vote for any candidate other than those backed by the government. This means voting for the “loyal opposition”: either the Communists or nationalists from the LDPR. Some of Navalny’s opponents in the protest movement are outraged: they think anything other than a boycott will just legitimize unfair elections.
  • Navalny argues this tactic has worked once before — in 2011. Then, he called on voters to vote for any party other than the ruling United Russia party, forcing the authorities to carry out mass electoral fraud and triggering the largest street protests in over a decade.
  • While the opposition is arguing over strategy, the authorities are pursuing controversial criminal charges against 13 people accused of organizing “mass riots” at previous protests. Those accused face up to eight years in prison if found guilty.
  • New protests are planned for this Saturday, August 17. The authorities have refused to issue a permit, meaning those who show up may be arrested on the spot.

Why the world should care

The impressive turnout at recent protests in Moscow has generated a wave of optimism among Russia’s opposition. But it now looks as if this fragile consensus could crumble.

In brief: the miracle in a corn field

There was a piece of good news that dominated headlines this week. The pilot of an Airbus A321 operated by Ural Airlines saved the lives of his 226 passengers Thursday when he crash-landed his plane in a corn field near Moscow’s Zhukovsky airport after both engines failed. The outcome was a miracle, but the cause was corruption and corner-cutting: seagulls attracted by garbage dumps near the runway flew into the engines during takeoff.

Support The Bell!

The Bell's Newsletter

An inside look at the Russian economy and politics. Exclusively in your inbox every week.