Wednesday, February 24, 2021

Russia Putin – what will happen to Nord Stream 2 – latest news / NV


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Nord Stream 2 will probably just rot at the bottom of the Baltic Sea, becoming a monument to greed and stupidity

The point of Nord Stream 2, the almost-built gas pipeline that will directly connect Russia and Germany, is not really about securing the supply of cheap natural gas. Its meaning lies in personal gain and in the national interests of the two countries.

A gas pipeline running along the bottom of the Baltic Sea is damaging Germany’s relations with the United States and the European Union and reinforcing the chorus of critics of Chancellor Angela Merkel at home. If the question were only in gas molecules, this project would never have come to light. But why did this happen?

Let’s go back to 2005, when Gerhard Schroeder and Russian President Vladimir Putin signed an agreement on this gas pipeline, and exactly on the eve of Schroeder’s departure from the post of chancellor. Shortly after Schroeder handed power to Merkel, Russian energy giant Gazprom, effectively a division of the Kremlin, appointed him chairman of the Nord Stream AG shareholder committee. And in 2016, Schroeder took over the Nord Stream 2 project, in which Gazprom is the sole shareholder.

Since then, Schroeder has become a tireless defender of Putin. And he never gets tired of repeating: “I am doing this for the good of Germany, because this project covers the problem of energy security at a convenient price.”

In reality, Germany and Western Europe do not need Nord Stream 2. The oil price has more than doubled from its peak in 2008. And as more and more new gas fields are being commissioned (especially in the Mediterranean, not to mention North America), gas prices fell by almost 80% over the same period. Such an abundance of gas is unlikely to be temporary as the presence of renewable energy expands in the market.

In reality, Germany and Western Europe do not need Nord Stream 2

Today there are already 13 pipelines from Russia to Europe, through which about 250 billion cubic meters of gas are supplied. Nord Stream 2 will increase dependence on Russia, but in reality the stakes are much higher because it is a pipeline bypassing Ukraine and Poland. Putin believes that Ukraine, a former Soviet republic, is part of the Motherland, and he has already chopped off two pieces from it: Crimea and Donbass. And he is sure that Poland, a former satrapy, should be included in the sphere of Russia’s interests.

Nord Stream 2 gives Putin the opportunity to weaken both of these countries by depriving them of their gas transit fees, as well as removing Ukraine’s control over the gas tap. In 2020, Ukraine earned $ 3 billion from fees for the transportation of approximately 50 billion m3 of gas. The Nord Stream 2 gas pipeline will be able to pump about the same amount of gas – a pure coincidence, of course. Schroeder’s Gazprom gambit will allow Putin to squeeze Ukraine (and Poland), and exactly at the moment when the government in Kiev is desperate to resist Russian pressure on the already weak Ukrainian economy.

In reality, Schroeder did not think about Germany or Europe when, thanks to his friend Putin, he increased the Chancellor’s modest pension. (it is 93 thousand euros per year). But the real mystery is Merkel. When former US President Donald Trump told her, “You must stop buying gas from Putin,” she disobeyed. At the same time, an unnamed German official promised: “We will do everything possible to complete the construction of this gas pipeline.”

It can be assumed that the issue of energy supplies is not the most important for Merkel. It is not a matter of the “low politics” of gas and money, but of the “high politics” of states striving to increase their influence and positions. No matter how often Germans and Russians took each other by the throat, there is a long-standing reflex dating back to the time of Bismarck, who gave the famous advice: “Never break ties with St. Petersburg.” In other words, keep the peace with the giant on the eastern flank of Germany.

Although the Federal Republic is now under the cover of NATO, it honors Bismarck by pursuing a policy of appeasement or at least benevolent neutrality. With a keen sense of power, Merkel does not tremble over Russian gas, but adheres to the classic rule of German diplomacy.

Even during the Cold War, West Germany challenged three American presidents (Nixon, Carter and Reagan), bartering steel pipes for Soviet energy resources. But what made economic sense during the global oil shocks of the 1970s can now only be explained by Bismarck’s exhortations – don’t make the Russians angry.

Today, Merkel is operating in a new environment, and it is not only a surplus of supply and a drop in demand caused by the transition of the industrial world to solar and wind energy, as well as an increase in its energy efficiency. Suddenly, Merkel found herself «home alone. ” Not only the US, the UK and nervous Eastern Europe want to scrap Nord Stream 2. Even the French are now opposed to this deal.

Nuclear-powered France does not need Russian gas. She’s more worried about «special relations ”of Germany, as well as the lengthening of the Russian shadow over Europe. More recently, Russian Foreign Minister Sergei Lavrov threatened to sever relations with the European Union if it imposed new sanctions.

Merkel is facing unprecedented resistance on her own soil. Her prominent CDU party comrades, as well as pacifist-minded «green. ” As well as some of the liberal press, which is usually focused on criticizing imperialist America.

Why? Two words: Alexey Navalny. Putin faced the most dangerous rival and played too. The Kremlin’s attempt to assassinate Navalny, and now the lengthy prison sentence imposed on him, shocked Germany’s political class. Moral condemnation is stronger in democracies «real politics “ (realpolitik) in the Merkel style.

Merkel has driven Germany to isolation. But it would be reasonable to assume that the construction of Nord Stream 2 will still be completed. There are only about 150 km to build, so it is hard to imagine that the € 10 billion project would simply be buried under the Baltic sands. The Germans will not go into conflict with the Russians, and US President Joe Biden will be softer with Germany than Trump.

The games have already started. Germany is waving sweet cakes in front of Biden, promising to increase subsidies for the construction of terminals in the country that will accept liquefied natural gas (LNG) from America. She also promises to actively work on new rules that guarantee the preservation of gas transit through Ukraine. And Poland will receive funds for the construction of LNG terminals. Finally, there is talk that Germany will shut down Nord Stream 2 if Russia begins to violate international law and human rights. Please, President Biden, just lift the sanctions.

An agreement will be reached. But who will «negotiate ”with the energy market? The final verdict of the supply and demand court is that another gas pipeline is not needed. This means that Nord Stream 2 will probably just rot at the bottom of the Baltic Sea, becoming a monument to greed and stupidity.

HB has the exclusive rights to translate and publish the Project Syndicate columns. Republishing the full text is prohibited.

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Copyright: Project Syndicate, 2021

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