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The Nord Stream Question

Unlike a chameleon whose eyes can rotate 360 degrees to view the whole landscape around it simultaneously, human vision tends to focus our interest on the dangers immediately in front of us. The result is that while we are paying close and careful attention to an imminent security threat, we often overlook other significant factors operating on the sidelines or relegate that data to a secondary status to be dealt with at a later date. While it is true that Putin’s Russia stands immediately in front of our path and under our careful watch, it isn’t sufficient to view Moscow’s actions in isolation.

Russia is Waltzing along the sidelines with China and other adversarial nations who would benefit greatly from seeing the United States preoccupied and struggling with its international security environment. Kenneth Waltz, who published his seminal work Theory of International Politics the same year the US normalized relations with China, would argue that while the international world is composed of a system-wide structure of states we can analyze, we also need to consider the interacting units. Developments in the Nord Stream Two pipeline project may be on the sidelines as the world deals head on with the impact of Covid, Chinese aggression, cyber threats and other security-related issues, but pipeline issues and their impact in the Ukraine and the rest of Europe should not be ignored.

In a July 15 European General Court landmark decision concerning the Nord Stream Two pipeline, Germany lost its appeal to stop Gazprom’s unrestricted use of onshore OPAL (Ostsee-Pipeline-Anbingdungsleitung). This judgment, which now becomes the new cornerstone standard, gives us cause to revisit how energy decisions are made among the European Union (EU) states, Russia, and the United States, and their implications for future Russian natural gas projects on the European continent. This year the European Court went even further than its earlier ruling stating that the principle of energy security solidarity is binding on all institutions and bodies of the EU. 

Russian energy may now flow more freely to Eastern and Central Europe, but now the Ukraine and some West European states face the potential of a major gas shortage this winter. According to the Jamestown Foundation, European gas storage remains at under 60% capacity. Celsius Energy reports it is not expected to exceed 79% by the end of November. Gasprom-controlled underground storage facilities in Germany currently are at 13% and in Austria at only slightly higher at 14%.  Gas prices have more than doubled from the typical high wintertime pricing. 

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With the world looking in other directions, Biden lifted the US’ opposition to the Nord Stream 2 pipeline and Putin won his golden victory. Russia gets to supply Europe as its wishes; Ukraine will lose about $3 billion in gas transit fees; and Moscow will have geopolitical protection for gas transiting Europe via its territory, according to Paul Gregory, a research fellow at the Hoover Institution. As compensation Putin has offered the Ukraine between $50-$70 million in investment monies to offset the purchase cost of fewer than 100 windmills to produce green energy for Ukraine’s domestic use. 

Biden called his move to lift sanctions a goodwill gesture to improve German-American relations. German Chancellor Angela Merkel calls her nation’s energy moves a purely commercial undertaking. From the Ukraine’s perspective, these side deals bolster Russia, deliver empty promises of energy security from Merkel, and are a betrayal by Washington. No one dares address what will occur this winter if Russia’s Gasprom develops “maintenance problems” in its supply line of energy going to the Ukraine.  Already deliveries to that country are down by 50% this year. If Putin decides to annex additional territory, what nation will be willing to risk losing their monopolized, Russian energy supply? Putin, in addition to Ukraine, already has weaponized energy against the Baltic states and Eastern Europe. While the West keeps a watchful eye on China and the Middle East, Putin is running unimpeded down the sidelines, apparently, out of our line of sight. It may be a chilly winter in parts of Europe this year.

DARIA NOVAK served in the United States State Department during the Reagan Administration, and currently is on the Board of the American Analysis of News and Media Inc., which publishes usagovpolicy.com and the New York Analysis of Policy and Government.  Each Thursday, she presents key updates on Russia.

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