The Malignancy that is Nord Stream

The real reason that Russia wants to build Nord Stream, which is more expensive than the existing gas pipeline network, is that it will enable Russia to interrupt gas supplies to EU member countries like Poland, the Baltic states and Ukraine, while keeping its German and other West European customers snug and warm.

Uffe Ellemann-Jensen, a former foreign minister of Denmark, writing in the Moscow Times:

As winter approaches, many people in Central and Eastern Europe remember the chill caused last winter by Russia’s deliberate cutoff of gas supplies. That shutdown was a harsh reminder that gas is now the Kremlin’s primary political instrument as it seeks to re-establish its privileged sphere of interest in what it thinks of as Russia’s “near-abroad.” If Russia is allowed to continue imposing Moscow’s rules on Europe’s energy supplies, the result will be costly — not only for Europe, but for Russia as well.

So it is past time that the European Union stop treating energy as a bilateral issue, with some of the larger member states trying to protect their own narrow interests at the expense of the common European good. The EU urgently needs to build a common energy policy and a single market for natural gas. Until both are established, there is a grave risk that Russia will use new blockades to continue the kind of divide-and-rule policy that the world has witnessed since Vladimir Putin came to power.

The planned Nord Stream gas pipeline on the bottom of the Baltic Sea is a good example of the problems that everyone in Europe is facing. The pipeline has been established as a Russian-German-Dutch consortium, but it is Gazprom that is in the driver’s seat with 51 percent of the shares. Nord Stream will enable Russia to deliver natural gas directly to Germany without using the existing land-based connections.

At first glance, there seems to be no problem. But the real reason that Russia wants to build Nord Stream, which is more expensive than the existing gas pipeline network, is that it will enable Russia to interrupt gas supplies to EU member countries like Poland, the Baltic states and Ukraine, while keeping its German and other West European customers snug and warm.

Countries that have good reason to fear a Russian manufactured chill have loudly proclaimed that Nord Stream is politically rather than economically motivated. After all, it would be much cheaper to expand existing land pipelines than to build new ones under the sea. Moreover, Russia’s ability to meet future gas demand from commercially viable reserves suggests that Nord Stream could be used to cut off gas sales to unfavored clients.

Yet these concerns have been pushed aside by the powerful pro-Nord Stream lobby, led by former German Chancellor Gerhard Schröder, who, having approved Nord Stream while in office, was quickly hired by Gazprom after he left it. In most democracies, such a move would have quickly received prosecutorial attention. But no serious investigation of the propriety of Schröder’s dealings was ever initiated, perhaps because of the scale and importance of German-Russian economic ties.

In November, Nord Stream was given a surprising go-ahead by three Scandinavian countries that will lend their seabed to the project: Denmark, Sweden and Finland. They seem to regard the case as a “technical issue” and are now satisfied because environmental guarantees have been given.

But Nord Stream is no “technical issue.” The concerns of countries that fear being left out in the cold must be addressed, which is why it is necessary to establish a single EU market for natural gas. That way, no one would be left exposed to Russian pressure.

Europe undoubtedly needs Russian gas, but fears that this gives the Kremlin a monopolistic stranglehold over Europe are exaggerated. Russia’s share of total EU gas imports is just above 40 percent today, compared with 80 percent in 1980. Moreover, Russian gas represents only 6 percent to 7 percent of the EU’s total primary energy supply.

So, in general, dependence on Russian gas should not be feared. The problem is that some countries in the eastern part of the EU are much more dependent on Russian gas than the average figures suggest. Thus, they must be guaranteed the kind of solidarity that is fundamental to EU membership.

Last year’s experience with interrupted gas supplies did have one benefit: a new push for alternative routes, like the Nabucco pipeline that is intended to bring Azeri gas to Europe through Turkey. An early warning system on potential supply cuts has also been agreed between Russia and the EU. And it looks like Ukrainian Prime Minister Yulia Tymoshenko has charmed Putin into concluding a new gas deal. Yet anxiety remains high in the countries most exposed to new supply cuts.

It is in Moscow’s own interest that the EU deal with it as a united entity. Continued fear and uncertainty about Russian gas supplies would undoubtedly lead the most-exposed EU countries to seek to protect themselves by blocking EU-Russian negotiations on new partnership and cooperation agreements.

In his state-of-the-nation speech in November, President Dmitry Medvedev stressed the need to modernize the Russian economy. Closer cooperation with the EU is the most obvious way to make this possible. But, so long as Russia is perceived as an energy blackmailer and not a partner, such cooperation will be impossible.

10 responses to “The Malignancy that is Nord Stream

  1. Germany, Italy and France are all collaborating with Russia to make Europe entirely dependent on Russian gas and to oppress Eastern Europe. Russia would not be able to achieve its objective of divide and rule if there weren’t willing accomplices such as Merkel, Sarkozy and Berlusconi.

    Despite all the media hype about Merkel being an Atlanticist, pro-American and being suspicious of Russia due to her East German background. Angela Merkel from 2005 to 2009, has pursued a pro-Russian or Russian friendly foreign policy, some may argue that was because Merkel was in a coalition with Schroeder’s SPD. But even after the recent election, removal of the SPD and replacement by the FDP. Germany continues to view Russia, as a “Strategic Partner”. The new German Foreign Minister first foreign trip was to Moscow were he reaffirmed the “special relationship”.

    Italy has shamelessly collaborated with Russia, Berlusconi has made no secret of his “friendship” with Putin, Berlusconi once proudly declared he was Russia’s lobby in Europe. And that Berlusconi was in favour of Russia joining the European Union. Berluconi has repeated voiced support for Russia’s new “European Security Architecture” plan.

    France with Putin’s recent visit has shown again how fickle and ridiculous the French are. French gas companies have join the South Stream project, along with Italy’s ENI. To add insult to injury France will be selling Mistral ships to Russia, the first ever a NATO state has sold sophisticated equipment and technology to Russia. This untreatably has caused tremendous concern in the Baltic states and Georgia. Sarkozy for all his haughtiness and posturing, is a fraud when it comes to Russia and the Afghan war.

    Western Europe has sold out Eastern Europe to Russia for gas and oil. If the United States is serious about confronting Russian aggression, the US should cease wasting time with venal hypocrites of France, Germany and Italy. And concentrate in forming a coalition with Britain, Poland, Czech Republic, Hungary, Romania, Baltic states, pro-Western Ukraine and Georgia. Seeking to accommodate Franco-German/Italian appeasement policies is a waste of time for the US and the West.

  2. Gazprom is a Russian instrument to subjugate Europe to Russian dominion. Europe consumes Russian natural gas and sleepwalks into Russian slavery… The Molotov-Ribbentrop Pipeline provides Russia a disguise to re-militarize the Baltic Sea, and under pretext of “guarding” and “protecting” the pipeline, attack Baltic States or Poland. That’s why Russia intends to acquire French Mistral amphibious assault ships. Russia has similar plans on the Black Sea with the South Stream pipeline, the “twin brother” of the Molotov-Ribbentrop Pipeline. Controlling European hydrocarbon supplies, Russia controls European policy and economy. In fact, Europe becomes a Russian colony, and Russia can again enlarge her territory. Please say NO to Nord Stream pipeline!

  3. There is the “spot market” this is where consumers in Europe can buy Liquid gas. Russia has seen a 5% dip in market share in the EU over the last 12 months. Russia tried to force customers to pay at 2008 prices and even threatened to “fine” customers for not taking contracted gas, the Russians did not take the recession into consideration. Many in Europe then went to the spot market where liquid gas was cheaper. Qatar over the last 12 months has seen a 66% increase in sales of its liquid gas into Europe

    Now you would think that this is the solution to European dependency on Russian gas but for one fact the major gas producers have now formed a cartel like OPEC this will control the market and a Russia has been voted to lead it. No doubt he will use this position to protect Russian gas interests.

    I agree with Warren Italy, Germany and France are putting their own bi-lateral relations with Russia above the needs of EU member states for example the Baltic’s and Poland. Germany has been dependant on Russian gas for 40 years Nord stream is being built to keep the gas flowing to them. Italy will be the main recipients of the south stream pipe line so it’s in their interests to keep Moscow sweet. But as for the French ,only god knows what goes on in Sakozys small brain. I would describe him as a political “whore”, when Obama was elected he did all he could to ingratiate himself. Sarkozy offered to bring France back into the NATO command structure and announced a new partnership with the USA, Sarkozy wanted Obama’s full attention he reminded me of a spoilt French brat.Sarkozy really stooped to an all time low in June of this year when he decided not to invite her majesty the Queen to the D day commemorations. He thought inviting the Queen would be a distraction and get in the way of the new relationship he was trying to form with Obama This snub to the Queen angered the veterans from Britain Canada and the US.

    Sarkozy did not get the response he hoped for from the new US administration, so almost out of spite he is now sucking up to the Putin regime, another weird European Politician with no honour or self respect
    The only powerful nation in Europe that is prepared to meet the Russian threat head on is the UK. Where there is no “reset”

  4. R John

    Totally agree, with regard to Sarko, this pretentious venal French twat is indeed a political whore. The ceasefire agreement he signed when he was EU President during the August 2008 Russian attack on Georgia was entirely favourable to Russia, his Sarko along with Red Merkel vetoed Georgia and Ukraine’s entry into NATO at the April 2008 Bucharest Summit & December Brussels summit. France along with Germany repeatedly shirk responsibility for the Afghan War, France and Germany refuse to send sufficient number of troops or deploy their forces to fight in the South where the US, UK, and Canadians have incurred casualties. Just 3 months after Russia’s aggression against Georgia, Sarko comes out saying he is in favour of Russia new “European Security Architecture” . Which is intended to exclude the United States, and allow Russia to dictate.

    It is outrageous that Russia can or have the audacity to thin it can dictate to Europe, Russia’s dying population is a third of the EU, its awful economy is thirteen times smaller than the EU economy. The reason is because the EU refuses to force Russia to end the monopolistic parasite that is Gazprom. EU refuses to implement its own competition laws to force state and monopoly enterprises like EDF, GDF Suez, Total, Ruhrgas, E.ON, ENI, to allow for more competition. Because these state and private monopoly companies sign up to contracts with Gazprom, Rosneft and other Russian state enterprises. These western state and private monopoly enterprises force their governments in Germany, France, and Italy to take a pro-Russian stance and appease Russian demands. This inevitably will be at the expense of Eastern Europe an area of “privileged interest” to use Russian jargon.

    The UK is alone in Western Europe to see the danger Russia poses. The UK should co-ordinate its efforts with Poland, Czech Republic, Hungary, Baltic States and the US to push back Russian influence and aggression.

  5. Warren I believe that Germany France and Italy have joined Russia in either a spoken or unspoken conspiracy to force the Ukraine back under the yoke of Russian tyranny.

    Both Nord and south stream pipe lines are being built not to increase Russia’s overall gas supply into the EU but as an alternative to the Russian gas transited through the Ukraine, as we know 80% of Russian gas is currently transited through the Ukraine and this country desperately needs the transit fee it receives from Russia. Over the last few years Russia has engineered numerous confrontations with the Ukraine over gas the net result is that Russia has been able to convince many in Europe that the Ukraine is unstable and unreliable.

    I believe this is part of a long term strategy.

    Russia, Kazakhstan and Belarus have recently formed a new free trade block it’s a clone of the old common market. Russia see this as a catalyst for the formation of a Russian dominated political union similar to the EU it wants other CSI members to join for example kyrgyzstan.The stubbing block is that this country is a world trade member where as Russia and the other two block members are not . Russia wants Kyrgyzstan to re-negotiate its WTO membership so that it can join the new block. If this happens this will clear the way for Russia to go after its main target the Ukraine.

    Russia has already stated that the Ukraine should join the block they state that the Ukraine’s economy would grow by 20% in 5 years

    Belarus was forced to join this block through economic pressure placed on it by Russia, in recent years Russia refused to buy Belarusian milk and meat pointing to unacceptable standards when they agreed to join the block these problems disappeared. In the case of Ukraine the leverage Russia is trying to apply is the supply of gas in both the price the Ukraine has to pay and also the transit price it receives, the Ukraine is a WTO member but if Kyrgyzstan can negotiate a deal to join this block while still a WTO member this will clear the way for Ukraine to strike a similar deal.

    It will take the election of a more pro Russian government in the Ukraine for this strategy to work but I think it’s disgusting that Germany France and Italy are assisting in this sell out of the Ukraine. If both Nord and South stream had been turned down then Russia’s leverage would not exist the Ukraine would have the whip hand over gas transit.

    Putin wants his legacy to be the reformation of a new neo soviet union the Ukraine is the key and this newly formed trade block is the catalyst as you said Warren the USA, UK, Baltic states, Hungary Czech republic and Poland must act as one to aid and protect the Ukraine and see off this Russian threatened expansion

  6. Has anyone examined the implications of the new shale gas on the situation. The price of LPN has crashed in USA to the benefit of consumers. I personally know one inexperienced little guy who is going into the shale gas business. He has never drilled for anything except water in the past??? Exxon is getting involved in a big way so shale gas is very real.

  7. At least five oil companies are active in exploring for shale gas in Poland. I think the Russians stand to be big losers on Nord Stream. How can they win when shale gas crushes price???

  8. The amazing thing is that Europe seems completely ignorant on shale gas. They seem completely unaware of what has happened. Observers in USA say that shale gas just “fell out of the sky”.

  9. Go into “NO HOT AIR” for the shale gas story.

  10. Absolutely correct Warren and R John . The
    obvious , completely transparent intentions of
    the russians to use energy supplies to intimidate
    western Europe , must be obvious to all but the
    most ignorant .
    The Nord Stream designed to by pass Ukraine ,
    was masterminded by the moscovites and shame
    lessly marketed to western Europe and the
    Scandinavian countries , with the help of the
    than chancelor of Germany , that moscovite
    lap dog , Schroeder . While still at the head of
    his government , he was on Putin’s payrol . What
    a scumbag ! Here is someone the germans can
    really look up to with pride .
    In sharp contrast to this lowlife , Poland and It”s
    president Kaczynski , upon being approached by
    the moscovites to take part in that ” project “,
    told them if it means that it will economically
    hurt Ukraine , they are not interested . No
    amount of promised revenues swayed their
    decision . That is how HONORABLE allies act !
    Germany , weak sister France and regretably now , Italy , should take a close look at Poland ,
    to see how small they are in comparison .
    As for hoping that by appeasing the moscovite ,
    they secure their energy position , it only proves
    that they have not learned anything from past
    history .

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