Illustration: Ragni svensson

Features Natural Gas. Makes Russia Stronger

In the Baltic countries, there is a great need for energy. The Nord Stream project is a power game in which Russia may come to strengthen its role.

Published in the printed edition of Baltic Worlds page 40-44, Vol II:III-IV, 2009
Published on on februari 19, 2010

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For nearly 45 years, the Baltic was a divided sea. Estonia, Latvia, and Lithuania were incorporated into the Soviet Union. Poland and East Germany were nominally independent states, but were essentially governed from Moscow. Finland had throughout its history enjoyed limited freedom of action, especially when it came to foreign and security policies. This bit of modern history, which ended less than twenty years ago, still influences cooperation and integration within the Baltic Sea area.

The former Baltic Soviet republics were soon integrated into the European Union and the Western defense alliance NATO. The U.S. and Western Europe accomplished this in an almost coup-like manner. It was a question of acting while Russia was in a weakened state. East Germany was reunited with West Germany and was thus pulled into both the EU and NATO. Following the Baltic States’ example, Poland quickly let itself be incorporated into the West’s economic and military structures. A resurrected but weakened Russia viewed this development with disapproval and bitterness. The Russian prime minister Vladimir Putin has called the dissolution of the Soviet Union a geopolitical catastrophe.

The integration has run into a series of difficulties. Russia has not been particularly helpful. For the EU, which has so many member states with “difficult” backgrounds in the area, the development of a strategy and program for the Baltic Sea has long held high priority.

This is particularly the case when it comes to issues of energy and the environment.

In June 2009, the EU Commission presented a proposal for a strategy and action plan for the entire region — in accordance with a decision to produce such a strategy, which the EU Parliament had reached in 2006. Immediately thereafter, the European Council gave the Commission the task of formulating what was, for the EU, a unique proposal. The EU had never before developed strategies applying to specific geographical areas within the Union. The Baltic Sea strategy is a pilot project and may come to be followed by similar projects for other areas. During the latter half of 2009, under Sweden’s EU presidency, the project, parts of which had been initiated earlier, was launched. The project is extensive, if somewhat vague, and affects almost 100 million people living in eight EU countries around the Baltic Sea. The strategy has its roots in concern over the lack of coordination that has characterized the region for so long, and which is primarily caused by the region’s sharp division during the Cold War. The principle problems are: the seriously worsened state of the environment throughout almost the entire Baltic Sea, inadequate transportation infrastructure, trade barriers, and uncertainty surrounding energy sources.

The Baltic Sea strategy entails a new way of working and cooperating within the Union. New laws or institutions are not really essential to future progress. What is essential is that the governments show willingness to find new ways of cooperating effectively. The countries’ economies must be coordinated. Today, trade with countries that are immediate neighbors predominates. The development in the Baltic Sea region has been hindered by the great distances within the area, but also the distances to the rest of the EU countries. It takes 36 hours to get from Warsaw to Tallinn by train. Latvia, Estonia, and Lithuania are isolated when it comes to energy supplies.

Lately, the Russian-German energy project Nord Stream has added to tensions in the Baltic region. As in the case of a similar project, South Stream, which runs under the Black Sea, Russia has managed to get a firm grip on Europe’s future energy supply. In a number of countries, fear is spreading, a fear rooted in previous experience. This is not just a matter of Russia securing the export of its large gas reserves, or of meeting Western Europe’s great energy requirements. No, say many: in the background, a broad and ambitious political agenda is unfolding, designed by an ever-more authoritarian Russia that wishes to regain a position of power in international society — the position that was lost with the fall of Communism and the dissolution of the Soviet Union.
Today, Russian natural gas flows through land-based pipelines that traverse Belarus, Ukraine, Poland, Estonia, Latvia, and Lithuania. It has caused concern in the recipient countries in West Europe, and in particular Germany, that Russia has occasionally broken off deliveries for political reasons — in order to punish countries, as has occasionally happened with Ukraine — as well as technical reasons. The new pipeline under the Baltic Sea will deprive the transit countries of large revenues. Furthermore, the new pipeline is constructed in such a manner that Russia can break off supplies to those countries that for whatever reason fall into disfavor.

Nord Stream, as it is envisioned, will constitute a corridor 1,200 kilometers long and 2 kilometers wide. It will run along the bottom of the Baltic Sea from the town of Vyborg near St. Petersburg to Lubmin, a town in the vicinity of Greifswald. Two parallel gas pipelines will be constructed, each with a width of 1.2 meters. The excavation of the sea bed, which is yet to begin, would affect a corridor about 150 meters broad. The installation would have an impact on a zone ten times that large. On its way from Vyborg to Greifswald, the gas line would pass through the economic zones of five countries: Finland, Sweden, and Denmark and, of course, the two owner countries Russia and Germany. About 40 percent of the gas line will be laid through the Swedish zone east of Gotland; it will then proceed east of Danish Bornholm and finally end up in Germany.

At present, it seems that a service platform, which was to be established northeast of Gotland at a depth of 50 to 90 meters, will not in fact be built.

If everything goes according to plan, one of the two lines, with a capacity of 27.5 billion cubic meters, will be ready to start operating in 2010. The second line, with the same capacity, would be ready in 2012.

Nord Stream would transport gas originating in western Siberia and the large fields in the Barents Sea. Construction has already begun on the Russian, land-based part of the project, which is controlled by state-owned Russian Gazprom. Construction on the part based on German land has not yet begun, but it will, when finished, reach areas near Bremen and areas near Olbernhau, close to the Czech border.

EU’s annual gas consumption is today somewhere around 90 billion cubic meters, which is equivalent to more than 25 percent of Germany’s total energy consumption. More than 80 percent of the gas is imported, to a large extent from Russia. EU’s projected gas consumption for 2015 is estimated at 680 billion cubic meters and the need for imported gas at just over 500 billion cubic meters — in other words, a large increase. The world’s greatest gas reserves are located in Russia, which owns close to 30 percent of the total — as compared to Norway’s 1.3 percent. For Germany, Denmark, the Netherlands, and Great Britain, Nord Stream is of vital importance. This is not the case for Sweden, however. In Sweden, gas has, so far, constituted less than 2 percent of the total energy supply. These prognoses do not, however, take into account what will happen if the world’s nations reach an agreement to reduce the emission of carbon dioxide radically. This would drastically reduce the need for gas — according to the International Energy Agency (IEA). Increased use of wind power and nuclear power together with more effective energy utilization would reduce the use of gas by 5 percent up until 2015 and by 17 percent up until 2030. If this forecast proves realistic, the future need for Russian gas will be significantly smaller than today’s estimates.

A variety of different objections were raised against Nord Stream. The construction of the pipeline may, for instance, lead to environmental problems. These specific misgivings have delayed the start of the project. During and after World War II, large amounts of ammunition, chemical weapons and mines were dumped in the areas through which Nord Stream is to pass. Two German mines, containing about 200 kilograms of explosives, were recently found. One was northeast of Gotland, seven meters from where the pipeline will be located. The risk of heavy metals, phosphates, and organic toxins being released is thought to be great. In addition, the German-Russian gas line would go against the Swedish policy of reducing future dependence on fossil fuel.

The underlying argument, however, concerns security policies. The Swedish Energy Agency has expressed itself unusually clearly on this issue. It has, indeed, been remarkably outspoken, given its location in a militarily neutral country which has been particularly cautious when it comes to statements that might provoke Russia. According to the Swedish Energy Agency, there is much evidence suggesting that Russia has, in the past, used its energy resources as a means of achieving political goals — for instance when Moscow used the gas tap as a weapon during a 2006 conflict with Ukraine — and that it will continue to do so in the future. There is definite unease within the EU about becoming too dependent on Russia for its future energy needs.

The main stockholder in Nord Stream, Gazprom — of which former German Chancellor Gerhard Schröder is chairman — is, not surprisingly, of the opinion that Nord Stream can scarcely be held to be contrary to broad European objectives. As early as 2000, both the EU Commission and the EU Parliament expressed their support for the project, and re-affirmed their support in 2006. Here, then, a number of European countries are torn between their need for energy, and their fear that Russia will use its energy resources to regain influence over the areas that once made up the Soviet Union, including those countries which once were members of the Communist empire’s Warsaw Pact. In an open letter to President Obama this spring, 23 former heads of state and a number of Central European intellectuals pointed out that Russia, after the invasion of Georgia, had proclaimed a “sphere of privileged interests” which might very likely include their countries as well. “Pipeline politics is a Russian tactic”, said the authors of the letter, two of which were Václav Hável and Lech Walesa.

Radoslaw Sikorski, at present Poland’s foreign minister, went the furthest. During his term as defense minister, he compared the Russian-German agreement on the construction of the Nord Stream pipeline with the 1939 Molotov-Ribbentrop pact, which had de facto divided Central Europe into spheres of Russian and German influence.

Gerhard Schröder played an interesting role in the foundation of Nord Stream. It was while he was Federal Chancellor that Germany approved the project and, furthermore, provided an economical guarantee of 1.4 billion dollars. The deal between Russia and Germany was cemented a few weeks before Schröder left office after the election defeat of 2005. A few weeks later, he accepted the position of chairman of Nord Stream, which carries a yearly salary of 250,000 euros.

Schröder was not the only leading politician who found employment within Nord Stream. The former Finnish prime minister, Paavo Lipponen, has been active as an imbursed middleman. The former Italian prime minister and former chairman of the EU Commission, Romano Prodi, however, declined an offer to become chairman of South Stream. Matthias Warnig is CEO for Nord Stream. During the 1980s, he served as a major in the secret East German police Stasi, at the same time that Vladimir Putin, who was a colonel in the Russian intelligence service KGB, was stationed in Leipzig. Warnig, however, claims that the two never met and that his background in Stasi is irrelevant to the present pipeline debate.

The security concerns that have been voiced in connection with the construction of Nord Stream are primarily grounded in the fact that Russia has disappointed expectations when it comes to developing democracy, a market economy, and a state ruled by law. On the other side of the Baltic Sea, especially in the Baltic States and Poland, where memories of Russian hegemony are fresh, there is great suspicion of Russian intentions and Russia’s exercise of power.

Few claim that the Nord Stream project would entail a direct military threat. On the other hand, the project may give the Russian military occasion for expanding its presence in the middle of the Baltic Sea. A hypothetical terror threat would serve as an excellent excuse for Russia (and for Germany) to arrange for military supervision of the construction of Nord Stream, which would continue, perhaps, even after the pipeline has begun to function. In the future, Nord Stream will provide a significant proportion of the EU countries’ energy supply; it may fetter EU in its future dealings with Russia.

Nord Stream’s structures are expected to operate for about fifty years. If and when the Russian military presence in the area increases, it is not unreasonable to assume that other countries will also boost their military presence. The result will be increased tension, perhaps incidents that will require diplomatic intervention. Any terrorist threats leveled against the installation will be dealt with by Russian armed forces. A law passed fairly recently gives the Russian president the mandate to deploy Russian forces abroad without a parliamentary hearing. Another problem with the entire Nord Stream project is the lack of openness. Nord Stream itself is probably doing its best to explain and justify its plans. But Russian energy policy is secretive. Hidden contractual provisos are commonplace, as is corruption.

A seasoned expert on Russia who has previously held high positions within the Swedish intelligence service, Jan Leijonhielm, said in the daily Dagens Nyheter on October 20, 2009:

“It is unfortunate for the surrounding world that Russia is not developing towards democracy and that military ability is gradually being recovered, and that Russia is prepared to use it, as well as energy extortion, against neighboring countries. Russia is still, without comparison, the largest security policy actor in our immediate surroundings, and it is not the nation that I would choose to become economically dependent on.”

Collaborative projects of this sort usually lead to greater trust among the countries that participate in the projects. Greater trust may indeed develop here, as far as relations between Russia and Germany are concerned. But for a number of Baltic Sea nations, it seems that the opposite will be the case. Nord Stream will make Russia independent of the transit states.

There are other problems in connection with the gas line project which may have security policy consequences. A large proportion of Nord Stream’s gas will be difficult and expensive to produce. Russia is about to establish a gas OPEC together with Algeria, Iran, Qatar, and Venezuela. A rather pretty collection of countries, that is, as members of a producers’ cartel. The majority of the members are not at all unwilling to use their large energy resources for political purposes. Here, the EU can get into serious political trouble in the future. The only countries among the Baltic Sea region’s EU members that have a positive view of the project are, in fact, Germany and Denmark.

In late October 2009, Denmark gave its consent to the project, and Sweden and Finland gave theirs in November. The Swedish government’s decision met with critique from, among others, the Swedish Social Democrats. The minister of the environment, Andreas Carlgren, however, was of the opinion that the government had made an extensive environmental investigation of the gas pipeline and that Nord Stream, during the 23 months the investigation lasted, had been assigned some serious homework. Carlgren further stated that “all states have the right to place a line in international waters”. The United Nations Conference on the Law of the Sea is unequivocal. This is because no coastal state should be able to monopolize international waters. So Nord Stream is not a joint project for the Baltic Sea. This also means that the large project will make it more difficult to decide on a joint EU energy policy.

The Danish Ministry of Climate and Energy concluded that the gas line will not be a serious threat to environment, marine life, or cultural heritage. During the period of environmental impact assessment by the Danish authorities, the corporation agreed to comply with a series of Danish demands. Among other things, the route is to be changed so that it goes south rather than north of Bornholm. The Bornholm fishermen will, further, be provided with new trawls that can handle being drawn across gas lines. The corporation is generally liberal when it comes to meeting the demands that concerned parties might have. The reconstruction of the harbor in Slite, Gotland, is another example.

The concession process differs from country to country. In Sweden, the government decides on the issue. In Germany a court of law, in Denmark an administrative department, while, in Finland and Russia, the process includes several steps. Sweden gives priority to the environment of the Baltic Sea. The decision is taken using the Convention on the Continental Shelf as a guideline.

A relatively longer stretch of gas line travels through Swedish waters than through Danish. The line passes through bird preservation areas and has greater impact on navigation. None of the governments concerned have brought up security policy issues.

After all, when it comes to Nord Stream, it is difficult to conjure up images of a military threat. The Baltic Sea is, rather, characterized by non-military threats. At issue, here, is a series of problems, the solutions of which demand great economic and human resources, but most of all cooperation and consensus among all countries around the Baltic Sea. Sad to say, in this matter, much is left to be desired.

The greatest problem is, perhaps, the environment. The Baltic Sea is one of the world’s sickest seas. Because of discharge from agriculture on both sides, the Baltic Sea may have reached a condition of almost chronic eutrophication, a situation that calls for the deployment of new, drastic measures.

Another serious environmental problem is the discharge of heavy metals, anti-flame substances, dioxin, mercury etc., as well as litter, such as slowly decomposing plastic materials. Belarus, Ukraine, and the Czech Republic have no Baltic Sea coastline, but all three nations have rivers that drain into the Baltic Sea, and they are responsible for about 15 percent of the heavy metals that are released into its waters.

Oil spills, in the relatively cold and species-deprived Baltic Sea, continue to be a serious problem, even though great efforts are being made to prevent such spills. There is extensive transportation of oil cargoes through the Baltic Sea. Oil is, of course, a natural product, but it decomposes extremely slowly at low temperatures. Fish depletion is a much-discussed problem. The supplies of many species of fish, such as cod, Baltic herring, and eel, have declined rapidly.

As far as radioactive substances are concerned, the Baltic Sea has high concentrations of Strontium 90 and Cesium 137, higher than seas in other parts of the world. The radioactive substances in the Baltic Sea derive from nuclear tests, the Chernobyl disaster, and European nuclear power plants.

Russia holds the key to a large proportion of the energy supply of the eastern Baltic nations in particular. It is essential that relations between Russia and especially the Baltic States and Poland improve. But it is also essential that the EU show a hitherto undemonstrated ability to develop a policy towards Russia which is both constructive and sustainable, and that Russia become integrated into European cooperation. ≈