ISSN 2330-717X

Nord Stream 2: To Gain Or To Refrain? – OpEd

By

Why Germany Refuses to Bend under Sanctions Pressure

The chances of the sanctions war around Nord Stream 2 to rage on after the construction of the pipeline is finally over seem to be high. That said, we have to admit, with regret or with joy, that it will be completed, and for the following reasons:

Germany, like any other European country, has set itself the task of abandoning coal and nuclear energy within the next few decades. In reality, however, there is no alternative to coal and nuclear energy. Simultaneously forsaking gasoline and diesel cars, which is something Europe dreams about, will inevitably increase the EU’s demand for electricity. However, green energy is unlikely to satisfy Europe’s energy needs any time soon. Hopes for cheap thermonuclear energy are unlikely to come true until 2050 at best. Therefore, in the coming decades, natural gas, Russian and other, will obviously remain the most convenient and cheapest fuel. At the same time, regardless of where the pipelines run, Russian natural gas will account for a significant share of the European and world markets. This is not politics – just a simple economic reality.

Despite the attributed environmental benefits of Nord Stream 2 and the Russian natural gas, the positive impact of replacing coal with natural gas remains largely unclear as it depends on the volume of methane leaking from the processes of gas extraction and transportation. Nonetheless, Nord Stream 2 presents itself as an attractive alternative for the EU as it would help decrease gas prices because Russia will be able to supply the EU with higher amounts of gas, thus, decreasing demand for expensive imported liquified natural gas (LNG).

Nord Stream 2, although a privately-financed commercial project, has political implications. Politics and economics are too closely intertwined, and in the short term at that. The abandonment of Nord Stream 2 will hardly weaken Russia and force the Kremlin to introduce democratic reforms. This will only result in Europe losing a good opportunity to effectively ensure its energy independence, as well as that of its Baltic and Eastern European allies, many of whom, unable to fully integrate themselves into European energy systems, continue to buy electricity from Russia.

At the same time, Nord Stream 2 will help make Germany a guarantor of the EU’s energy security. More and more people now feel that the sanctions against the Russian-German project are essentially meant to undermine Germany’s growing influence. However, even this abnormally cold winter has shown that political problems and competition for influence in the EU are taking a back seat to energy security issues. The disruption in LNG supplies from the United States has only underscored Europe’s need for the Nord Stream. Besides, when completed and controlled by Germany, Nord Stream 2 could be used as a means of pressure against Russia and Russian supplies which is exactly what Brussels and Washington want. 

Yet, the United States continues to oppose the Nord Stream 2 project and, thus, trans-Atlantic tensions between Germany and the United States are on the rise. Like the Obama and Trump Administrations which opposed Nord Stream 2 and introduced tangible steps to halt its progress, the Biden Administration is too faced with a lot of pressure by American lobbyists and members of the Congress in order to push back and halt Nord Stream 2 progress and efforts. However, until this very day, US President Biden and his administration did not sanction the project, which could be understood in lights of Biden’s struggling efforts to repair relations with Germany after the Trump Administration’s accusations towards and troop withdrawals from Germany. Thus, although the current administration under Biden still opposes Nord Stream 2, it is reluctant to impose any sanctions because its priorities lie with repairing US-German ties in the Post-Trump era. 

The United States is not the only opposing International player to Nord Stream 2, but even many Eastern European countries, including Slovakia, Ukraine and Poland are against the pipeline project in fear of geo-economic insecurity. For instance, it is believed that Nord Stream 2 would cost Ukraine approximately $2 to $3 billion in losses as the transit volumes shift from Ukraine to Nord Stream 2. Another argument put forth by European opposition to Nord Stream 2 is that it would undermine the EU’s energy solidarity or even a potential “Energy Union”; however, Germany and supporters of Nord Stream 2 often highlight that the imported Russian gas would not only benefit Germany, but rather all of Europe. The pipeline is expected upon completion to be able to transport 55 billion cubic meters of Russian Natural Gas to Germany and other clients in Europe! 

Despite oppositions, threats of sanctioning and the earlier construction halt in December 2019, it seems that the Gazprom-Pipeline Nord Stream 2 will be completed and will go online soon as the Biden Administration continues to refrain from imposing sanctions. 

About Author: IVANA LIMA, Research fellow from the Rio-based Universidade Candido Mendes. Ms. Lima is attached to the BRICS Chamber of Commerce and Industry (Brazil Chapter Executive). She also liaisons with the UK’s Foreign, Commonwealth and Development Office.

2 thoughts on “Nord Stream 2: To Gain Or To Refrain? – OpEd

  • May 9, 2021 at 2:49 pm
    Permalink

    In the aftermath of WWII, the Atlantic Community and the NATO Alliance were built for two reasons: First, to contain the Soviet Union and purge the power of the various communist parties of Western Europe; and second, to divide Germany and (for the sake of the rest of the AC) keep it dependent on US power. But after the fall of the Soviet Union, and the end of the division of Germany in 1989, a new role for NATO needed to be invented. The original question of an independent and united German power-center once again reminded the rest of Europe of the three horrible decades which ensued from 1914 to the end of WWII. But without a menacing Soviet Union and with the demise of communism on the continent, why would the continuation of NATO be needed? The answer was: Russia couldn’t be trusted; the Kremlin wasn’t a true democracy; and NATO needed to be expanded to protect Eastern Europe from Moscow. And, although the US had promised Gorbachev, that a Soviet withdrawal from Germany and the other Warsaw Pact countries would not engender NATO expansion eastward, Washington’s promise became a lie. Hence with the fall of the Berlin Wall and in the so-called aftermath of the first Cold War, a newly united Germany remained militarily subservient to the US-led command system, and all the countries of Europe were protected from Russia. The only problem with the Washington solution was that the continent remained divided — albeit, so much closer to Russia’s borders. In fact, with the expansion of the Western Alliance eastward, NATO troops are now situated just sixty short miles from St. Petersburg. However, even with the expansion, Europe and Germany boosted their business with Moscow, and to this day, they remain dependent on Russian gas. But the geopolitical instability, caused by the expansion of NATO eastward, has meant that the European continent as a whole has morphed from a first Cold War into a budding Second. So much, for the “peace dividend” of the early 1990s. But how long can a Cold War environment last before it becomes politically untenable? Enter the Trump administration, 2017. Trump ran on a platform that a rich Germany, with a vast trade surplus visa the US, needed to pay and repay its present and past share of the NATO budget. And as US economic power waned within the process of globalization, Berlin’s economy remained buoyant and in surplus. This central economic issue has not gone away with America’s new leader, Joe Biden. In US politics, Republican and Democrats both vie for the same working class votes. And American military largess (toward Germany) has become a potent issue with both political parties. But unlike Trump, President Biden and the Congress are more like old-school Cold Warriors. Enter Nord-Stream 2, the new pipeline to bring Russian natural gas to Germany. Most Germans, and their current government, favor the project. Biden and Congress do not. But Biden wants to establish better relations with Berlin to keep them in NATO and to maintain a viable Atlantic Alliance. But in the aftermath of Trump, Germans don’t trust the US political system. They believe it is broken. And therefore, they are deeply uncertain about their own future. In a recent poll, if it came to a question of having to decide between Russia or the US, only 16% of Germans sided with the US. Never mind that only 8% sided with Russia, a whopping 66% opted for German neutrality in the face of such a scenario. No matter how the Biden administration decides to finesse the Nord-Stream 2 issue, the real issue is how to heal the division of Europe without causing a new (or third) imbalance. For Poland and the rest of Eastern Europe, the Russian question is real and needs amelioration. But for all of Europe, the German question still remains paramount. What would German neutrality look like? Would Berlin be drawn closer to the China-Russia entente (China is Germany’s number one trading partner)? How would neutrality affect the question of the current US nuclear umbrella? Would Berlin seek nuclear weapons? Finally, Is Europe’s ongoing tenuous balance of terror — established with the Soviet explosion of its first atomic weapon in 1949 — on the cusp of creating an era of nuclear proliferation? German neutrality could very easily become a Pandora’s box of even greater instability. Instead, it’s time to rethink the current NATO-led security architecture for a divided Europe, and establish a genuine structure of real peace. All the other alternatives are dangerous by comparison.

    Reply
  • May 10, 2021 at 12:31 am
    Permalink

    Ukraine is unstable and unpredictable because of its economy and military prospects. Ukraine might go to another war with Russian separatists despite Russia has warned it would react decisively. In such scenario, gas supply through Ukraine might be affected. Germany cannot afford gas supply being affected negatively. Germany needs Nord Stream 2 to finish asap. In fact, Germany was the brainchild of that pipeline, which would provide Germany energy security. Germany wants Nord Stream 2 just like Turkey wanted Nord Stream 1. Even if Ukraine has to lose much, Nord Stream 2 would only provide more energy supply to Europe. US did not oppose Nord Stream 1 the way it opposes Nord Stream 2. But it opposes Turkey acquiring S-400. Perhaps that indicates the tension between US and Russia is worsening but it cannot unite or control all NATO members. Probably, other NATO members only fear US because of expectable ‘regime change’ scenarios.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.