Nord Stream Leading To Continental Divide?

Courtesy of The New York Times, a report on the ambitious Nord Stream pipeline planned to run along the bed of the Baltic Sea, the Russian natural gas giant Gazprom is driving a political wedge between Eastern and Western Europe. As the article notes:

While the Russian-German pipeline offers clear energy benefits to Western Europe, Central and Eastern European leaders fear it could lead to a new era of gas-leveraged Russian domination of the former Soviet bloc. With its gas wealth and eyebrow-raising network of personal ties, Russia has divided members of the European Union that have vowed to act collectively to protect their security.

Currently, Russian gas has to be piped through Eastern Europe to reach Western Europe. If Russia shuts off the gas to pressure a neighbor in the east, it is felt in the more powerful, wealthier countries to the west, where it touches off loud protests.

The new Nord Stream pipeline will change that equation. By traveling more than 750 miles underwater, from Vyborg, Russia, to Greifswald, Germany, bypassing the former Soviet and satellite states, it will give Russia a separate supply line to the west.

As a result, many security experts and Eastern European officials say, Russia will be more likely to play pipeline politics with its neighbors.

“Yesterday tanks, today oil,” said Zbigniew Siemiatkowski, a former head of Poland’s security service.

That is not the way the Russians present it. Gazprom, which supplies Europe with 28 percent of its natural gas, says the $10.7 billion project is commercial, not strategic.

Matthias Warnig, Nord Stream’s chief executive and a former East German, said Eastern Europe’s fears were unfounded. “The wall broke down 20 years ago,” he said. Europe needs additional natural gas to compensate for declining output from the North Sea, he said, and Russia is the best place to get it.

European officials have portrayed the project as one that helps unite Europe and enhance its collective energy security. The European Commission and European Parliament endorsed the pipeline as early as 2000 and both reconfirmed their commitments as recently as 2006.

“As far as common energy policy exists, we are part of it on the highest priority level,” said Sebastian Sass, Nord Stream’s main representative to the European Union.

But officials in Central and Eastern Europe fear that while profits from the pipeline, a joint venture between Gazprom and a trio of German and Dutch companies, will flow to Russian suppliers and German utilities, the long trod-upon countries once under the Soviet umbrella will become more vulnerable to energy blackmail.

Such tactics are hardly without precedent. A Swedish Defense Ministry-affiliated research organization has identified 55 politically linked disruptions in the energy supply of Eastern Europe since the breakup of the Soviet Union.

Until now, Russia’s use of natural gas as a foreign policy tool has been limited to short embargoes, at least in part, analysts say, because it is so blunt a club.

Last January, for example, Russia shut down a pipeline that crossed Ukraine, ostensibly over a dispute with Ukraine on pricing and tariff fees.

The shutoff left hundreds of thousands of homes in southeastern Europe without heat and shuttered hundreds of factories for three weeks.

What had been a bilateral dispute spilled across the Continent, angering influential Western governments and costing Russia money.

The new pipeline and a similar project in southern Europe called South Stream, to run under the Black Sea, will insulate Western Europe from such actions and limit the political and financial costs to Russia.

The ability to shut off one pipeline or the other “depending on whim” makes shutoffs to Eastern Europe more likely, said Zbigniew Brzezinski, the national security adviser in the Carter administration. He called the pipelines a grand Russian initiative to “separate Central Europe from Western Europe insofar as dependence on Russian energy is concerned.”

“The Central Europeans, the former coerced members of the Soviet bloc, are the more worried,” he said.

For Eastern Europeans, the pipeline issue evokes deep memories of a darker era of occupation and collaboration, and has become a proxy debate over Russia’s intentions toward the lands it ruled from the end of World War II to the fall of the Berlin Wall.

In an open letter to President Obama last spring, 23 former Central European heads of state and intellectuals, including a former Czech president, Vaclav Havel, and a former Polish president, Lech Walesa, pointed out that after the war in Georgia last year Russia declared a “sphere of privileged interests” that could include their countries.

With the control of gas pipelines, they wrote, “Russia is back as a revisionist power pursuing a 19th-century agenda with 21st-century tactics.”

Radek Sikorski, the Polish foreign minister, has compared the pipeline deal between Russia and Germany to the 1939 Molotov-Ribbentrop Pact that divided Central Europe into spheres of German and Soviet influence. “Taking the decision first and consulting us later is not our idea of solidarity,” he said.

The din of alarm rising in the East has hardly been heard in the West, however, where Russia has pursued an effective policy of divide and conquer.

“Russia is one of the issues that divides the E.U. the most,” said Angela E. Stent, director of the Center for Eurasian, Russian and East European Studies at Georgetown University in Washington. “Russia and Gazprom go and deal very well with individual countries.”

A web of oil and gas interests in the West, as well as corporations and influential figures with ties to Russia, have greased the process of engagement with Russia.

Perhaps most visibly, a former German chancellor, Gerhard Schröder, has embraced commerce as a means to integrate Russia with Europe. Mr. Schröder was the deal’s “power broker,” says Zeyno Baran, an authority on Eurasian energy at the conservative Hudson Institute in New York. “Without him, it never would have gotten off the ground.”

Mr. Schröder’s government sealed the pipeline deal, including a $1.46 billion German loan guarantee for the project, scant weeks before he lost the 2005 election.

A few weeks later, he took a job as the chairman of Nord Stream. He has said he decided to take the job after leaving office and that he had not known of the loan guarantee.

Mr. Warnig, the project’s chief executive, served as a captain in the foreign intelligence directorate of the East German secret police, the Stasi, in the 1980s. At the time, Vladimir V. Putin, the future Russian president and prime minister, was a K.G.B. agent in Dresden, East Germany.

While his background has fueled speculation of murky cold-war-era ties underlying the project, Mr. Warnig said his spying career was irrelevant to the pipeline debate today.

Other links are more clear-cut. The former prime minister of Finland, Paavo Lipponen, was paid by Nord Stream to help secure permits. Mr. Sass, the Nord Stream liaison in Brussels, was an aide to Mr. Lipponen.

In 2008, Gazprom offered Romano Prodi, then the prime minister of Italy, the chairman’s job at South Stream; Mr. Prodi declined.

Now, with the pipeline looking inevitable, the French have decided to jump on the bandwagon as well, seeking to join the consortium through Gaz de France. Otherwise, they might have to buy gas from a German broker.

The French-German competition, analysts say, illustrates how securing coveted business with Russia has accentuated their rivalry for economic and political preeminence in Europe.

Ultimately, considerations of European unity, like the fears of Eastern Europe, are secondary in the raw struggle over resources by national and corporate interests.

It is a free-market capitalism that post-Communist Russia has cannily exploited, says Pierre Noël, a professor at Cambridge University and a fellow at the European Council on Foreign Relations.

“It is an open, competitive, capitalist economy,” he said. “People build the pipes they want to build.”

This entry was posted on Tuesday, October 13th, 2009 at 10:09 am and is filed under Gazprom, Russia.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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