Problems ahead for Nord Stream II
A new gas pipeline might not seem like a flashpoint of controversy, but Nord Stream 2 is an unusual and special case. The new pipeline is designed to bring 55 billion cubic metres of gas from Russia to Greifswald in Germany where it will then be distributed to the European gas market – and it has a lot of people worried.
Its predecessor, Nord Stream 1, has been in operation since 2012 and did not generate anywhere near as much controversy, making the outcry over this second pipeline interesting; after all, what is one more pipeline?
The misgivings seem to be centred on two related areas – the political realities of Russia and the possible decrease in European energy security.
The political scene has changed in Russia since the first pipeline was planned, designed and built. In the early 2000s there was hope that Russia was undergoing a process of modernisation and market liberalisation which set European minds at something approaching ease. One of the theories behind free market capitalism says that the more open countries are to globalised trade the less likely they are to engage in conflict. In that context it is easy to see why Nord Stream 1 passed without significant incident.
When you compare that idea to the situation now the difference is stark. Under the current version of Vladimir Putin, Russia has absolutely no interest in modernising or reform, and this changing context raises questions across Europe as to the intentions behind the pipeline. Is the country which annexed Crimea in the face of an international outcry suddenly building a new pipeline out of the goodness of its heart? This seems unlikely, and so questions are being asked.
This then leads to worries about the future of European energy security. Nord Stream 1 was not such an issue in this regard as it increased the diversity of routes by which fuel could reach the continent, thereby arguably increasing security. In contrast, Nord Stream 2 will cause a significant reduction in route diversity as its very size dictates how much future gas will pass onto the European market. Nord Stream 2 will, if built, eventually carry 70% of all gas into Europe.
Past evidence shows that we should not rely on Putin and Russia to act in a benign fashion. In January 2009 Russia turned off nearly all gas exports to Europe as part of an ongoing price dispute with the neighbouring Ukraine. Immediate shortages and falls in gas pressure were reported across the continent, from France to Turkey and Finland to Italy. Europe shivered.
Russia once again threatened to cut off the gas supply to Ukraine in February 2015 and it does not take a genius to imagine similar threats being issued in the future – the effects could well be severe. If the tap was turned off in Russia then much of Eastern Europe would go dark overnight with countries like the Czech Republic, Finland, Slovakia, Lithuania and Estonia being close to 100% reliant on Russian gas. Nearly 30% of gas used in Germany comes from Russia and it is estimated that Italy could only last for just over two weeks without Russian fuel.
What government would or could leave its people shivering and maybe dying in the depths of winter to make a political stand against Russian aggression? From the outside it seems clear that Nord Stream 2 represents a real threat to the energy security of Europe, and the decisions made over the next few weeks on whether the pipeline will be allowed to proceed are worth keeping an eye on.
