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Explaining Nord Stream 2, the planned Russian pipeline to Germany

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When German officials headed to the Nato summit in Brussels, they were already prepared for what they considered to be an inevitable attack by US President Donald Trump over their low defence spending, reported South China Morning Post (Hong Kong).

But, Trump took aim at the Germans for a very different reason: a 1,300km-long, planned pipeline beneath the Baltic Sea. The German government has been pursuing its Nord Stream 2 project for years, despite criticism from the United States and some Eastern European nations.

Trump renewed the long-standing US criticism of the project, and doubled down by tying it to the future of Nato. “Germany, as far as I’m concerned, is captive to Russia because it’s getting so much of its energy from Russia,” Trump told Nato Secretary General Jens Stoltenberg, speaking on camera. “We have to talk about the billions and billions of dollars that’s being paid to the country we’re supposed to be protecting you against.”

Germany is indeed Russia’s biggest export market in Europe for gas, with a dependency that may grow further once Nord Stream 2 is finished. The project would roughly double Russia’s export volume via the Baltic route that goes through the original Nord Stream pipeline.

Over the next few decades, Europe’s own gas resources – which accounted for about a third of its supplies in 2016 – are expected to gradually disappear. (Britain, Norway and the Netherlands are Western and Northern Europe’s biggest producers, primarily relying on natural gas fields in the North Sea.)

As Europe’s own supplies are running out, the United States is hoping to gain access to a profitable market with growing demand.

But US economic interests only partially explain why the pipeline conflict is now emerging as a key point of contention.

Nations such as Poland and Ukraine also fear that Russia may be diversifying its gas routes into Europe to be able to exploit its grid for political reasons. In June 2014, amid the fallout over the Russian annexation of Crimea months earlier, Russia cut off Ukraine’s gas supplies for weeks in what Kiev said was an attempt to blackmail Ukraine. EU pressure on Russia helped to eventually solve the conflict, as powerful member states in Western Europe grew concerned that the supply disruption might have ripple effects across the continent.

Ukraine and parts of eastern Europe fear their partners to the west may be much less vocal next time if they receive their natural gas through a different set of pipelines, allowing Russia to cut off its unruly neighbours with impunity.

German Chancellor Angela Merkel has not shown any willingness to halt the controversial pipeline project, but at times she has indicated at least some scepticism, acknowledging that the project was not an entirely economic one but also of political significance. That already stood in strong contrast to her predecessor, Gerhard Schroeder of the Social Democrats, who long championed the gas connection.

At the time, the German government said it was pursuing the offshore pipeline between Russia and Germany to cut energy costs and establish a reliable supply route.

But in the years since, doubts have arisen whether the official arguments fully explain Berlin’s decision-making process at the time. In 2005, Russian President Vladimir Putin’s friend Schroeder hastily signed the deal just as he was departing the office from which he had been voted out days earlier. Within weeks, he started to oversee the project implementation himself, leading the Nord Stream AG’s shareholder committee.

Schroeder went on to become a board member of several consortiums in which Russian government-controlled energy company Gazprom is at least the majority shareholder. Most recently, he became chairman of Rosneft, which is Russia’s largest oil company and controlled by the Kremlin.

Schroeder’s post-chancellorship business dealings have long raised suspicions among Germans over his political legacy, but many are still willing to defend his now-most controversial project. Nord Stream 2 always also reflected a willingness among many Germans on the left and right of the political spectrum to engage Russia, rather than to provoke it. The plans were drawn up at a time when Russia appeared eager to engage with the West – and many Germans still see Russia more positively than other countries do. The Germans’ hope on that front may also be based on their long dealings with the Soviet Union throughout the cold war, when open hostility and more low-key cooperation went hand in hand.

While gas supplies are now raising concerns over the risks they may pose to international security, they were actually seen as a way to prevent conflicts during the cold war. “Long-term energy diplomacy became a carefully built link which guaranteed cooperation even during political crises,” argued German historian Frank Bösch, who analysed West German government records. “Natural gas pipelines implied mutual trust within a stable relationship, which led to further collaborations, including cooperation in nuclear power,” he explained.

Germany’s cold war legacy may help explain why Berlin is so vehement on making itself more dependent on a nation that has annexed foreign territories and cut off energy supplies in the past.

So far, however, Nord Stream 2 has only had one real impact: driving a wedge between Germany and other Western nations.

In response to Trump’s accusations that Germany was captive to Russia, Merkel – who grew up in East Germany –cautioned the president that she may be in a better position to judge her country’s dependence. “I’ve experienced myself a part of Germany controlled by the Soviet Union, and I’m very happy today that we are united in freedom,” Merkel said.

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Reporter: Denes Osvalt
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Category: Politics, Business
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