EU Foreign Policy

Why Germany should give up on the Nord Stream 2 project

From the smallest individual actions to the most marvellous and destructive natural phenomena, nothing could be possible without energy, the source  of any motion and chemical process in living beings and inanimated things; from an economic point of view, energy is what makes development a reality. In a world marked by resource scarcity then, it’ not surprising that it is one of the main objects of contention on the geopolitical arena, and it will surely remain such in the days to come.

In this regard, the claims by the Russian energy giant Gazprom that its Nord Stream 2 gas pipelines would just be a commercial project sound hardly believable: the Russian government is the major shareholder of the company (51%), and, as the past events have shown, it has no restraint in using its huge abundance of gas and its infrastructure as a leverage to gain geopolitical power.

 

FILE PHOTO: The logo of the Nord Stream 2 gas pipeline project is seen on a board at the St. Petersburg International Economic Forum 2017 (SPIEF 2017) in St. Petersburg, Russia June 1, 2017. REUTERS/Sergei Karpukhin/File Photo

What is Nord Stream 2?

 Nord Stream 2 is a gas pipeline project, a further development of the already existing Nord Stream 1 consisting of two pipelines that stretch from the Russian city of Vyborg to the port of Greifswald, in Northern Germany, through the Baltic Sea. The total cost of the new project, that would add two more gas pipelines, amounts to €9.5bn; its completion is expected in the end of 2019. The economic benefits that this would bring to Germany are clear: two of the five companies involved in the construction are German and the country would become a major transit-hub for the resource; moreover, the new flow would replace the decreasing gas supplies coming from the Netherlands and the UK.                                                                                                                                  

But many EU countries see this project unfavourably. While this solution may be cheaper for the Germans, it is considered a betrayal by some of the former Soviet republics, which rely almost entirely on Russian gas. On average, around 35% of the EU member states’ gas supplies are provided by Gazprom through its pipelines (mainly through the “Brotherhood pipeline” in Ukraine) and the construction of the Nord Stream 2 could bring the percentage to 40% over the next years; more dependence on Russian gas means more leverage for the Russian government, which could use the resource as a political weapon, especially against its neighbouring countries. It already happened in 2006 and 2009, and more recently in 2014 and 2015, when Gazprom interrupted the flow to Hungary, Slovakia and Poland because they provided Ukraine with their gas. Countries such as Poland and Lithuania already started building terminals to import Liquefied Natural Gas (LNG) to diversify their supplies.

Hot pipelines

The United States are among the fiercest opponents of Nord Stream 2. The Senate and the House of Representatives voted to tighten the sanctions against Russia this summer, but these were also aimed against two EU companies (German and Austrian) involved in the project. The former German Foreign minister Sigmar Gabriel and the Austrian Chancellor Christian Kern protested with a joint statement claiming that “Europe’s energy supply is a matter for Europe, not the United States“, heightening the tension between Berlin and the new US administration. But this is not simply a Europe vs USA issue: the project goes against the EU Commission Energy Security Strategy, which states that in the long term the European Union should “increase energy production in the EU and diversify supplier countries and routes.” What Germany is doing is the opposite, but Angela Merkel and Gerhard Schröder, former Chancellor and current chairman of the consortium behind the project, seem determined to shrug off negative criticism, arguing that this is not a matter concerning EU institutions. That’s not entirely true though, as in 2014 the European Commission inaugurated the concept of Energy Union, still not implemented to this day despite the shared competence on energy between member states and the EU stated in the treaties.

By sicurezzaenergetica.it

Critical voices have risen in the corridors of EU institutions as well. The President of the European Council Donald Tusk sent a letter to Juncker claiming that Nord Stream 2 “is not in Europe’s interest” and that the project would deprive Ukraine, a heavily indebted country, of the gas tranist fees paid by Gazprom that amount to $2bn. With two more gas pipelines in the Baltic Sea, Ukraine would basically have less revenues and would find itself more isolated and impotent in front of Russian blackmails. Within her ranks, Angela Merkel is countered by the head of the European People’s Party group (EPP) Manfred Weber who highlights the incompatibility of the project with the EU’s long term objectives.

Environmental concerns

Not any less important are the concerns raised by environmental groups. One of these, the Coalition Clean Baltic, claims that the project will have a negative impact on the territories involved in the construction: the pipelines start on the Kurgalsky natural reserve, despite it is forbidden to build in such areas according to Russian laws. But some even argue that the project is going to break international laws, like the 1992 Helsinki Conventions protecting the Baltic Sea and the 1971 Ramsar Convention protecting wetlands. Greenpeace Russia, which is also fighting to end the project, claimed that EU members ignored their warnings and that “the project is illegal, not according to just Russian legislation, but international law.

Issues are raised also on the environmental assessment, which was conducted by a scientific consultancy group directly financed by Gazprom: many ask themselves if such an assessment could be taken seriously. Anke Schmidt-Felzmann, an expert of the Baltic Sea region from the Swedish Institute of International Affairs, complains about the timing and the “big holes” present in the report; it was released on April and the governments involved had two months to provide a feedback, but works already began before Sweden and Finland could greenlight the project. “Once you take a closer look at the smaller details in the hundreds and hundreds of pages of filings, there are a lot of gaps and questionable assumptions in the documents”, said Schmidt-Felzmann.

 Not in the EU’s interest

Technicians walk beside pipes for the Nord Stream pipeline at a storage facility in Mukran on the Baltic sea island of Ruegen April 8, 2010. REUTERS/Christian Charisius (GERMANY – Tags: ENERGY) – RTR2CKIW

Some might argue that Germany is just acting in its interest as a sovereign state, by carrying out its plans in the most convenient and inexpensive way, but we should expect more geopolitical foresight from a country often regarded as the leading nation of the continent and the strongest proponent of European integration. The Trans-Adriatic Pipeline (TAP) currently under construction, will provide Europe with gas from Azerbaijan, showing that there are alternatives to the Russian one. European countries could also import more LNG or invest more on local energy sources.
Nord Stream 2 risks alienating Eastern European countries even more, already reluctant to accept “migrant quotas” which some of them deem illegitimate. It would be a major setback for Ukraine’s economy, would imply more dependence on Russian gas and would have a significant impact on the environment; but above all, it would show that not even the current “leader” of the European project is truly committed to the long term plans set by the European Commission on such an important matter as energy.

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Bruno Formicola (Tracer)

Graduate in Political Science and International Relations from the University of Naples "L'Orientale", co-founder of My Country? Europe and member of the Young European Federalists. Addicetd to information, memes and Autechre.

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3 Comments

  1. The actual reason for the pipeline is that the Ukraine is used to siphoning off gas intended for Europe. ***This is actually how Yuliya Tymoshenko became a billionaire!***

    But we’re not supposed to talk about that, because she’s a “liberal democrat”, amirite?

    1. Yes Robert, your statements are 100% percent correct/accurate and most folks in Western Europe knows this. Also keep in mind, there are very few avenues and/or opportunities for nord-stream-2 opponents to derail the project and a decade or so from its completion, western European nations will be thanking everyone but Russia/Gazprom for building such an indispensable pipeline. Why? Because kiev-ukraine is a lost cause, no matter what the US and EU does. Since the early 90s, Russia/Gazprom minimizing Ukraine as a transit route has always been an inevitability.

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