Illustration: Karin Sunvisson.

Conference reports Following the Nord Stream. Elder statesmen paved the way

“Follow the pipeline” was also one of the central themes of the 10th Aleksanteri Conference, “Fuelling the Future: Assessing Russia’s Role in Eurasia’s Energy Complex”, held at the University of Helsinki at the end of October 2010.

Published in the printed edition of Baltic Worlds Page 14, Vol 4:2010
Published on balticworlds.com on January 10, 2011

”Pipelinestan” is a much-used concept by the eminent traveling reporter Pepe Escobar in Asia Times. “Follow the pipeline” was also one of the central themes of the 10^th Aleksanteri Conference, “Fuelling the Future: Assessing Russia’s Role in Eurasia’s Energy Complex”, held at the University of Helsinki at the end of October 2010.

There is a growing interest in pipelines transporting oil and gas eastward, from Russia and Central Asia to China and other Asian countries, but Europe is still the most important market for energy from Caspian and neighboring fields, and there are competing projects for new pipelines to move oil and gas to the east.

Of these new projects, only Nord Stream is already being realized — no decision has been reached about the competing alternatives around the Black Sea — South Stream, Blue Stream or Nabucco — even though interest in them has been keener. Hanna Smith has some thoughts on this. She is a researcher at the Aleksanteri Institute and spoke at the conference about Nord Stream as an example of the importance of energy in Russian foreign policy.

According to Smith, this is an interesting case study in several respects: it combines bilateralism, multilateralism, and globalization. Several states, as well as the EU, commercial enterprises, and “elder statesmen”, have been involved, and historical memory plays an important role here. Nord Stream is a result of bilateral negotiations between Germany and Russia and bypasses the Baltic countries and Poland, which has resulted in accusations of a new Molotov-Ribbentrop pact. The point of contention was probably about the transit fees for which these countries had been hoping. Some other EU countries thought that the gas deliveries should have been a question for the entire European Union, not just for Germany. In Sweden, fears were voiced that the pipeline could be used for espionage. The EU Commission, however, declared that the project was important for the Union.

The primary concerns were, however, about the environmental effects  of the pipeline on the shallow Baltic Sea. Since the pipeline from Vyborg to  Greifswald — the longest sub-sea pipeline in the world — mainly goes through the Finnish and Swedish economic zones, the project had to pass environmental examinations in both countries. One of the problems is the number of mines and old munitions on the bottom of the Baltic Sea. To minimize this problem it was decided to change the type of ship laying down the pipeline from one stabilizing by laying anchor to one stabilizing in another way. Anchoring would also have disturbed sea life more.

Hanna Smith thinks this was one of the points where the “elder statesmen” engaged by Nord Stream, such as former prime ministers Gerhard Schröder of Germany and Paavo Lipponen of Finland, were useful: they not only lobbied for support for the project in their countries, but were also able to tell Gazprom how details of the project should be modified in order to get it approved:

“This has also been a learning process for Russian decision makers; they got to know how to take care of this and that in a way that would not have been possible in Russia.”

It might even be that this mostly rational process in the North of Europe has helped the Nord Stream project get off to a faster start than the competing projects in South Eastern Europe.

Hanna Smith reminds us that the first idea for Nord Stream was a Finnish one. The Neste oil company proposed in 1995 that a gas pipeline be built through Finland to its most Southern point, Hanko. From there the plan was for it to continue to Germany, presumably through Sweden. For Neste, the idea was to use part of the gas in Finland — and there would also have been other benefits for the country. When Finland was left aside, Neste withdraw from the project and Gazprom continued planning with its German partners. The project grew much bigger when the Netherlands, France, and even the United Kingdom, became interested in buying Russian gas.

About the foreign policy aspects of energy, Hanna Smith said that the relationship is complex. It is often thought that energy simply provides power; however this is too simple. Energy can be used as a foreign policy tool in a negative sense, but such a use can also turn against those using it in this way.

Russia is, according to her, so dependent on its energy that even if it can use it as a “weapon”, it is at the same time also a prisoner of the framework. In the case of Nord Stream, Russia has invested not only a lot of money, but also too much prestige to allow it to fail.

The conference was organized by the Eurasian Energy Group, one of the most important units of the Aleksanteri Institute, connecting its own researchers with an international network of experts. It was established in 2005 and is led by David Dusseault, acting professor in Russian Energy Policy at the Institute. The group has been trying to formulate a “social-structurationist approach to energy policy”, which was presented at the conference, but most of the approximately 70 presentations described more practical aspects of Russian energy policy, from the coexistence of the gas industry and the reindeer herders
in Siberia, to Gazprom as a media
owner. ≈

Peter Lodenius