The Nord Stream 2 gas pipeline widens the struggle between Russia and the West

The most controversial gas pipeline for global geopolitics runs through the icy waters of the Baltic.

In this brackish inland sea near the Danish island of Bornholm, the Russian pipe-laying ship

Fortuna is working

to finish the construction of the Nord Stream 2 trunk line. Only 138 kilometers remain to be completed;

6% of the total.

But the controversy continues.

The macro-project, which will bring Russian gas to Germany, continues to divide the European Union, where Eastern countries fear it will become another tentacle of Moscow's influence.

Meanwhile, the idea of ​​new sanctions by the United States, which also has its own strategic and commercial interests, against the companies that participate in the gas pipeline is hovering.

This new flow of Russian gas under the Baltic fuels three great battles.

In the first place, geopolitics, about the course to follow in the West's relations with an increasingly assertive Russia, and about cooperation with the Kremlin on strategic issues.

Also energy, with the debate on the future of the use of gas compared to other less polluting sources.

And a third commercial, with the struggle between Washington and Moscow - which are going through the worst moment in their relations - to try to place their gas in the European market.

The project has been highly controversial since its inception, in 2015, when the Russian state-controlled gas giant Gazprom and five European energy companies signed a consortium to build a new gas pipeline to replace the Nord Stream 1 —with lower capacity— in the Baltic bed.

The Nord Stream 2, at a cost of 9.5 billion euros (half financed by Gazprom and the other half by European investors), was forged when the Social Democrat Gerhard Schröder left the German Chancellery and became an advisor to Gazprom.

The new gas pipeline will now allow the Russian giant to deliver 55,000 million cubic meters of gas to Europe each year through 2,460 kilometers of pipes that cover the more than 1,200 kilometers from Russia's Ust-Luga to Lubmin - a small town very close to the city ​​of Greifswald—, in Germany.

It should have ended by the end of 2019. But the political debate, first, and the sanctions that the United States imposed in December of that year on the companies participating in the works caused a huge delay.

Also multimillion-dollar losses for Gazprom and the indignation of the Kremlin, which firmly defends the viability of the gas pipeline.

The poisoning last August that nearly cost opposition leader Alexei Navalni his life and after which the West sees the Kremlin's hand has once again heated the issue.

And the voices that demand the total stoppage of Nord Stream 2 have once again been heard, with the recent and controversial sentence for an old case to more than three years in prison to the opponent, who is already serving his sentence in a severe Russian penal colony.

Pressure on Germany

Pressure for Germany to withdraw its support for the project has mounted in recent weeks.

The European Parliament has called for its suspension.

But Chancellor Angela Merkel is standing firm.

He assures that Nord Stream 2 is a private business and insists on separating it from the right of the European Union to continue imposing sanctions on Russian individuals in response to the

Navalni case

and the harsh repression of peaceful demonstrations in Russia.

It would not be easy for Germany to abandon the gas pipeline either, nor would it be cheap, recalls Jürgen Trittin, a parliamentarian for the Greens in the Bundestag and a member of the Foreign Affairs committee.

“You would have to pay a lot of money in compensation to companies;

it has been calculated at around 10 billion euros ”, he assures.

The Greens, who are emerging as the decisive party in Germany after the September elections, do not like the project: “It is bad for the EU's climate goals.

If you are serious about the

green deal

, reaching zero emissions by 2050, you can't build a new fossil fuel infrastructure, ”says Trittin.

But legally, he acknowledges, it could not be paralyzed without compensating Gazprom and the rest of the hundred investors with billions, among which are the French Engie, the Austrian OMV, the Dutch Shell and the German Winteshall DEA and Uniper.

In addition, the deputy describes the argument of Russia's energy dependence as “nonsense”: “Europe can get gas anywhere.

Russia is much more dependent on us because if it stopped sending us gas, its economy would suffer a lot.

The main problem with the gas pipeline is that as Europeans we prolong our dependence on fossil fuels ”, he reiterates.

Russia also defines the project as “purely economic,” as Russian President Vladimir Putin, who personally directs energy policy, one of its great geostrategic instruments, highlighted last December.

The Russian economy is heavily based on hydrocarbons, which account for 62% of exports.

However, geopolitics is of even greater importance to the Kremlin.

And this has been shown frequently by betting on projects of doubtful short-term viability, such as the Power of Siberia gas pipeline, between Russia and China, which "will hardly be profitable," says energy expert Mikhail Krutijin, but that is a way to consolidate the turn from Moscow to Beijing.

Or TurkStream, which flows through Turkey and will face stiff competition, but is another tool of the "Kremlin's political ambitions" to expand its influence while preventing its gas from flowing through Ukraine, Krutijin says.

Stopping the project, insists the chairman of the Energy Committee of the Duma (lower house of the Russian Parliament), Pavel Zavalny, would be unjustified from an economic point of view.

The parliamentarian also defends that Nord Stream 2 is a good solution to shore up Europe's energy security and also part of a fruitful "strategic partnership" between Moscow and Berlin, especially in energy matters.

"That is why energy projects have been a target for third countries interested in weakening the economy and the international positions of both Germany and Russia," he says.

"The main beneficiary is the United States, as well as the European countries oriented towards Washington or that are losing the transit of Russian gas", remarks the deputy of United Russia (the government party).

Negotiations with the United States

The new US administration, headed by President Joe Biden, could be more reasonable than that of its predecessor, Donald Trump, when it comes to negotiating a solution to the conflict that will satisfy all parties.

According to the German weekly

Der Spiegel

, representatives of the US, Germany and the EU would be in talks on different proposals.

One of them would be to provide for an automatic shutdown of the gas supply in case Russia violates human rights or international law.

Brussels' official position on Nord Stream 2 is that it does not support it, but it cannot do anything to paralyze it either.

If the project complies with European legislation, and for now it is, you cannot intervene.

It is a national question, in this case a German one.

"It is not a project of common interest to Europe, it does not receive a European budget and it will not receive it," said the general director of Energy of the 27, Ditte Juul Jorgensen, last month.

Brussels has been very forceful when it comes to US sanctions.

That a third country imposes fines on European companies that do business in a legitimate way is against international law and constitutes a violation of European energy sovereignty, Germany also agrees.

For the president of the Commission, Ursula von der Leyen, it is “unacceptable”.

Josep Borrell, the highest representative of European diplomacy, has also rejected the "unilateral sanctions" of the United States against Nord Stream 2 companies. German President Frank-Walter Steinmeier said last February that after the progressive deterioration of the relations between Europe and Russia in recent years, energy companies are practically "the only bridge" that remains standing, and it is not smart to destroy it.

Poland and Slovakia, radically against

Nord Stream 2 "is a blow to Europe" in the service of Moscow's "aggressive politics", Polish Prime Minister Mateusz Morawiecki said: "Strengthen the power of Russia, help President Putin build military power and intimidate to other nations ”.

Poland, Slovakia (which would also lose revenue from transit rights) and the Baltic countries have led the opposition within the EU against Nord Stream 2, warning that the pipeline is an attempt by Putin to undermine European unity.

In front of those who affirm that it is only an economic project, they warn that the gas pipeline collides with the position of isolating Russia due to interference in other countries, annexing the Ukrainian peninsula of Crimea and participating in the Donbas conflict, where it supports militarily and politically to the pro-Russian rebels, for their involvement in Syria and for the poisoning not only of the opposition Navalni but also of the former Russian spy Sergei Skripal on British soil in 2018.

Pipes for the construction of Nord Stream 2, last January in the port of Sassnitz (Germany).

picture alliance / dpa / picture alliance via Getty I

Opponents of Nord Stream 2 also believe that the pipeline reinforces Russia's position as the Union's main gas supplier.

Russian gas already accounts for 40% of the total consumed in Europe.

And that will make Ukraine more vulnerable - through which several pipelines now pass and which would also face millionaire losses in what now enters through transit fees -, a geostrategic country for the EU and NATO, and Belarus, an ally and very dependent on Moscow .

In recent years, Moscow has diversified the export routes of Russian gas, especially after the so-called gas wars, which more than a decade ago affected the European supply of this hydrocarbon due to the crises between Russia and Ukraine, where the majority of the gas flowed at that time. part of the Russian gas.

Now Moscow partly avoids the Ukrainian territory to the north, with the Nord Stream 1, and to the south, with the TurkStream, which runs along the bed of the Black Sea and carries the gas through two branches, one to Turkey, and the other to southern and southeastern European countries, such as Bulgaria.

Washington focuses its - bipartisan - opposition to the project on defending Ukraine's position and arguing that the pipeline will increase Europe's dependence on Russian gas and expand the influence of the Kremlin.

But there are not a few analysts who point out that the United States also defends its own interests in the sale of its gas from hydraulic fracturing (

fracking

) to Europe.

"Freedom gas" came to call Trump.

This year, Washington has also expanded its sanctions policy for insurers, certifiers and any company that carries out "pipe laying activities."

The US goal to "torpedo" Nord Stream 2, considers Alexander Simonov, professor of economics at the University of Friendship of the Peoples of Russia, is "purely economic."

"The only effective way for US industry to take over a significant part of the European market is to physically restrict the export capabilities of Russian companies," he says.

German experts also see an obvious commercial interest from Washington, as well as geopolitical, in its opposition to the project.

In a few years, the United States has become the world's leading producer of natural gas thanks to the

fracking

technique,

and it needs to export because it has enough for domestic consumption.

Without Nord Stream 2, says Carsten Brzeski, ING's chief economist in Germany, the US could place its liquefied natural gas - which arrives by ship and is regasified - on the European market more easily.

"We already saw it under the Trump presidency, when the United States lobbied in the framework of the trade war for Europe to buy more gas from it."

"Unnecessary, expensive and contradicts climate goals"

Criticisms of the project also abound in Germany from a purely economic and energy perspective.

Claudia Kemfert, the economist who heads the Energy department of the German Institute for Economic Research (DIW), points out that “the supply of natural gas in Germany and in Europe is assured without the second pipeline.

Nord Stream 2 is unnecessary, expensive and contradicts energy transition goals. "

The project, he adds, should never have been launched.

Kemfert has published several studies on the Nord Stream 2. “The demand for natural gas will fall because the Paris climate agreements have to be complied with;

the existing infrastructure is sufficient to guarantee supply ”, he insists.

Germany is a net importer of energy.

The gas it consumes comes from Russia, Norway and the Netherlands.

Brzeski acknowledges that without the gas pipeline there is enough energy, but adds that the project also aims to diversify German energy exports.

Its operation, or its paralysis, would influence the development of renewable energies: “On the one hand, it can keep prices low and thus support the energy transition.

On the other hand, if it is paralyzed, prices may rise, which would make the development of renewables more urgent ”.

• Russia flirts with the German far right

• Russian propaganda targets Germany

With Biden eager to restore good relations with the EU, the subject of Nord Stream 2 has not been a melon that he wanted to open immediately.

However, Washington does not lose focus and makes it clear that it has not abandoned the idea of ​​imposing new sanctions on the entire network that surrounds the gas pipeline “President Biden has been very clear in saying that the gas pipeline is a bad idea, bad for Europe "Bad for the United States," US Secretary of State Antony Blinken commented this month.

Among the experts in the Kremlin orbit, the sanctions on the gas pipeline are seen in a rather pragmatic way.

"There are consequences for Russia," says Yulia Gryzenkova, from the Government-dependent Financial University, "but not only negative, but also positive, such as the reactivation of Russian production or the emergence of technologies."

The chairman of the Duma Energy Committee also sees these measures as a "double-edged sword."

"What doesn't kill makes us stronger," says MP Pavel Zavalny.

The Russian pipe laying ship 'Fortuna', last September near Wismar (Germany) OLIVER DENZER / Reuters

Ukraine and European security

Ukraine, a key country for the stability of Europe, with part of its territory devoured by Russia and a war fueled in the East, is a central point in the Nord Stream 2 controversy. The EU and the United States have invested billions of dollars there. Euros in foreign aid - and Washington also in military equipment - since the 2014 overthrow of pro-Russian Victor Yanukovich by a pro-democracy and pro-European citizens' movement.

Now, with the new pipelines, which open other routes to Russian gas and bypass the eastern country, Ukraine would lose 2 billion dollars (about 1.7 billion euros) a year in gas transit rights.

And this, says its foreign minister, Dmytro Kuleba, would amount to "an economic blow" from Russia to Ukraine "in the course of its seven-year military, economic, political and hybrid war."

In 2019, 40% of Gazprom shipments to Europe passed through Ukrainian territory.

And that year, the Russian gas company agreed to pay Ukraine some 2.4 billion euros in transit fee arrears and maintain the supply through its channels of 40 billion cubic meters of gas.

Nord Stream 2, Minister Kuleba considers, is "a threat" to security.

Not just from Ukraine, but from all over Europe, he says.

“Something that prevented the Kremlin from expanding its military aggression against Ukraine in 2014 was the Ukrainian strategic oil pipeline.

Russian President Vladimir Putin realized that a large-scale war throughout Ukraine could endanger the transit of Russian gas to Europe, ”the minister told this newspaper, reiterating that the new gas pipeline is moreover, “totally unnecessary”.

“The goal of building the Nord Stream 2 has never had anything to do with the energy market.

It is a geopolitical project ”, remarks Kuleba.

The United States is pushing for shipments through Ukraine to continue.

In fact, one of the proposals that flies over is to park the sanctions and impose them on Gazprom if it fails to comply with the agreement between Brussels, Kiev and Moscow, negotiated by German Chancellor Angela Merkel, in 2019, to maintain part of the gas flow to across Ukraine for five years.