And again about Nord Stream 2: how Russia lobbies its gas interests in Europe
Europe's gas risks
If we look at the message spread by the Russian media, then Europe’s powerful gas dependence is obvious. It is easier to list independent countries than vice versa. Only Norway, Sweden, Spain, Portugal and Belgium are relatively independent of Russian gas, in France and Italy it is 37% and 38%, respectively, in Austria, Poland, Greece, Hungary, Bulgaria, Serbia, Latvia, Finland exceeds 60%, and some even 100%. In 2017, Germany imported oil and natural gas from Russia in the amount of 19.8 billion euros.Currently, 38% of the gas used by Germany is imported from Russia.
In general, Europe’s dependence on Russia is estimated at 40%, and while supplies are growing: last year - by 8%, breaking the record in absolute terms (194 billion cubic meters). Gas consumption in Europe is growing, and Gazprom wants to increase its supply in the coming years. Analysts suggest that already this year Gazprom will export more than 200 billion cubic meters of gas.
Gas ambitions of Russia
Now, despite the opposition of many EU countries and the leadership of the European Union, the construction of the Nord Stream-2 gas pipeline continues, with a total value of 9.5 billion euros. Gazprom is the only shareholder in the project who bears half of these costs. Western partners of Gazprom are the German companies Uniper and Wintershall, the Anglo-Dutch group Royal Dutch Shell, the French Engie and the Austrian OMV. Nord Stream 2 will double the volume of natural gas that Russia can supply directly to Germany under the Baltic Sea, bypassing Ukraine. It is expected that its construction will be completed no later than 2019. The volume of pumped gas to EU countries can reach up to 55 billion cubic meters.
The Russian gas attack on Europe is not limited to the Nord Stream -2.
Gazprom is building the Turkish Stream at a heightened pace. It is planned that it will pass through Bulgaria, Serbia, Hungary and Slovakia.
With the help of new gas pipelines, Russia wants to prevent a hostile government in Kiev from receiving billions for gas transit and thus moving even further towards Europe. If Russia succeeds in connecting to the European network with the help of two gas pipelines at once, this would be a great success for Putin. After all, only along the northern route Europe will be able to receive an additional 110 billion cubic meters.
Unfortunately, America, even in the short run, is not able to offer Europe a real alternative.Although the capacity of Sabinepass terminals already allows, in terms of liquefied gas, to send about 27 billion cubic meters, and by 2020 - 96 billion, actual deliveries were less than 10 billion. And even from these supplies to Europe there are less than 1 billion cubic meters (mostly to Spain and Lithuania). The main buyers of American LNG are Southeast (China, India, South Korea and Japan, in particular), Latin America and Mexico. The reason is simple - if in Asia the price of LNG has exceeded $ 330 per thousand cubic meters, in Europe they do not exceed 240.
One thing is clear, the implementation of the Nord Stream-2 project and the multi-channel Turkish Stream will strengthen Russia's dominance in the gas markets of Europe.They will reduce the number of opportunities for the diversification of natural resources, create security risks in the already tense Baltic region, and bring Russia closer to the goal of undermining Ukraine’s position, depriving it of its role as a transit country for Russian gas supplies to Europe. The construction of Nord Stream 2 will concentrate about 75% of Russian gas imports to the EU on one route, creating a potential reference point, which will significantly increase Europe’s vulnerability to possible supply disruptions.
Europe is protected
The feeling of future gas dependence on Russia, apart from fears, simultaneously creates another trend - the desire to weaken it. Even the special term “energy security” has appeared in the everyday life of the EU. It manifests itself in the search for ways to diversify supplies, be it American LNG or the construction of new, in particular, southern gas flows to Europe.
As the deadline for completing the construction of the Russian Nord Stream-2 gas pipeline approaches, the United States has stepped up its efforts to block it, threatening Russia with new sanctions. This was confirmed by US Ambassador to the EU Gordon Sonland, speaking at the Center for European Politics in Brussels. This is a direct response to an earlier statement by US President Donald Trump that the gas pipeline will strengthen the EU’s dependence on Moscow in the energy sector. Recall that in August, Trump signed a law imposing sanctions on the gas pipeline, which, according to Gazprom, may hamper some of its projects. Sonlend’s statement is not specific, but it does make it possible to conclude that the White House administration does not abandon attempts to block Russian gas expansion into Western Europe. Moreover, answering the questionwhether the American leader can take further measures to thwart the project, Sonlend said: “We have not yet used the entire set of tools that could significantly undermine the project, if not stop it completely. We hope that opponents of this project will work organically, because the EU and its member countries agree that dependence on Russian energy is not a good long-term geopolitical solution. ” This official position must be understood in such a way that if the construction of the Nord Stream continues, then the president has many other tools at his disposal to try to contain and stop the project. that the opponents of this project will work organically, because the EU and its member countries agree that dependence on Russian energy is not a good long-term geopolitical solution. ” This official position must be understood in such a way that if the construction of the Nord Stream continues, then the president has many other tools at his disposal to try to contain and stop the project. that the opponents of this project will work organically, because the EU and its member countries agree that dependence on Russian energy is not a good long-term geopolitical solution. ” This official position must be understood in such a way that if the construction of the Nord Stream continues, then the president has many other tools at his disposal to try to contain and stop the project.
During a visit to Poland, which is a sharp critic of Nord Stream II, US Secretary of Energy Rick Perry also said that Trump leaves the possibility of imposing sanctions.Perry was more eloquent and noted that the United States’s rejection of this project is not based on hopes of increasing US gas exports to Europe, but on fears that Russia might increase its influence on key NATO allies by controlling energy supplies. “We don’t want someone to turn off gas in the middle of winter during a political crisis,” he said. “When Europe is vulnerable, the US is also vulnerable, and we don’t want to be in this position.”
US Assistant Secretary of State for Energy Frank Fannon said: “The position of the United States is clear enough. We oppose Nord Stream II and call on all parties to withdraw from the project. ” According to him, Nord Stream II is “a tool with the help of which the Russian state wants to strengthen the dependence of importing countries and exert coercive influence on them.” Fannon stressed that “diversification” of energy is the key to preserving Europe’s energy independence. He mentioned several projects aimed at achieving this goal, in particular the construction of a connecting pipeline (interconnector) between Greece and Bulgaria, the synchronization of the Baltic grids with continental Europe and the construction of a liquefied natural gas (LNG) terminal on the island of Krk in Croatia. “This terminal could receive LNG from a wide range of suppliers. This will allow us to increase diversification and move away from Russian sources, which will be of particular importance for Hungary, ”said Fannon.
In turn, the European Parliament once again urged to stop the construction of the Nord Stream-2 gas pipeline. This project “is contrary to the EU’s energy policy and therefore must be stopped,” the statement said.
In fact, Germany, which is the destination of the gas pipeline, was left alone in supporting the project, considering it a purely private enterprise. German Chancellor Angela Merkel, during her speech to the European Parliament, defended the Nord Stream 2 project, stressing that gas from Russia is needed as a transitional raw material in the fight against climate change - “especially in a country like Germany, which is not going to use atomic energy. " Merkel at the same time stressed that she is making efforts so that Ukraine does not cease to be a transit country for gas.
Not everyone in Europe likes the leading position of Germany in deciding on the routes of transportation of Russian gas. So, Italy insists on receiving gas not through Germany, but through Ukraine. Italians do not like much that Germany will become a hub for the distribution of Russian gas to Europe.They require the preservation of the previous route.
It should be noted that discussions about the feasibility of the gas pipeline unexpectedly turned around in Germany itself, and more and more questions arise about the position of Merkel. One of the contenders for the role of successor Angela Merkel Friedrich Mertz recently loudly doubted that the Nord Stream-2 gas pipeline should be built.According to Merz, "amid the incident in the Sea of Azov, Putin should know that they are thinking about it in Germany."
The opinion of the British Conservative Deputy Tom Tugendhat, Chairman of the Committee on International Affairs of the House of Commons is interesting: “The Nord Stream-2 gas pipeline project is an element of purposeful and diligent dismantling of the West, if you look from Moscow. The refusal of gas transit through Eastern European countries to Germany will increase the vulnerability of these countries, allowing them to "shoot them one by one, without risking the income of the gas oligarchs."
And even in Russia they recognize that the project may have difficulties in connection with the sanctions of the US Congress. Of course, if fearing fines from Washington, some concerns will come out of the project, Russia will still try to fill the financial gaps on its own. At the same time, Putin is not concerned with either international law or his own promises. This is evident from the example of the Crimea, the Donbass, and now the conflict in the Sea of Azov. For Putin, it’s only about completing the gas pipeline, and financial expenses are not taken into account.
Germany after Merkel
Of course, Merkel's position is a strong argument in favor of completing the construction of Nord Stream-2. And although some countries, in particular Italy, Spain, Greece and Poland, consider the strength of Germany to be excessive, the Germans do occupy higher positions in the EU institutions, and Merkel is recognized as the most influential politician in Europe.
However, if we look at the main posts in the European Union, we will see that they are not occupied by Germans at all. For example, the European Commission is headed by former Prime Minister of Luxembourg Jean-Claude Juncker. President of the European Union - Donald Tusk from Poland. The president of the Eurogroup is from Portugal, the president of the European Central Bank is from Italy.That is, the leading position of Germany - this is not some kind of dogma. Simply, Germany is the most populous country in the European Union. This is important because when countries vote in the Council of Ministers of the EU with a qualified majority, at least 65% of the EU population should be represented. About 16% of the population of the European Union live in Germany, and it is difficult to make such a decision without it.Economic influence is also important: many projects without German money are simply unrealizable.
At the same time, the dominant role of Germany in Europe was shaken after Merkel’s sensational resignation from politics. This is definitely the end of a whole era, and with each passing month it will be more difficult for her to push her decisions in the EU.
And no matter who becomes the future chancellor of Germany, he will be faced with a difficult choice: either the risk of an immediate energy war with Moscow, or the observation of how Moscow finally delays the gas noose.
Against the background of the fierce criticism of the project by the United States, Russia immediately joined the cause of its defense, and at the highest level. Thus, the head of Gazprom, Alexei Miller, told the Kommersant newspaper that the United States was not able to stop the construction of the Nord Stream-2 gas pipeline. “Well, you see everything yourself - 200 km have already been built. And the rest will be completed, ”Miller said on the sidelines of the Summit of the Association of Southeast Asian Nations (ASEAN) in Singapore.
A spokesman for the Russian president, Dmitry Peskov, warned that new US anti-Russian sanctions would harm relations between the two countries. “It’s hard to say what the sanctions will be,” the Kremlin spokesman said in an interview with Dozhd TV channel. - Will they lead to further complication of the situation with Russian-American relations? The answer is unequivocal: of course they will. ” “The fact that America has become unpredictable lately is also not a secret to anyone, everyone is already talking about this absolutely openly, because this unpredictability in the performance of such a largest country, the most powerful economy in the world, of course, is a subject of deep concern for all” - added Sands.
At the same time, for Russia itself, the financial feasibility of the project is a big question. The cost of the Russian budget only to bring the pipeline to the Baltic Sea is estimated at $ 44 billion, and it’s a stretch to call the gas pipeline a commercial project. If we take into account the investment component of Nord Stream II, it was obviously unprofitable and will never pay off.In fact, 44 billion were taken away from pensioners and state employees and paid for the pipe, which Russia, in principle, did not need. Those gas pipelines that already exist have twice the capacity than Russia exports gas to Europe.
And here the true goal of building a gas pipeline bypassing Ukraine is manifested - to punish the Ukrainians with the deprivation of transit and to give the opportunity to cash in on the contractors who build it.
Russian gas lobby
In its gas battle for Europe, Russia is actively attracting European lobbyists. Such as the former deputy of the German party of the CDU Friedbert Pfluger. Although Pfluger is not as famous as former Chancellor Gerhard Schröder, who works for the Russian energy company, behind the scenes, the former CDU functionary has become one of the most important European lobbyists in the field of gas policy. When in 2010 his political career ceased to develop, the politician decided to start a new life and devote himself to protecting Russian gas interests. As a visiting professor at King’s College London, he now advocates for the Nord Stream 2 gas pipeline, for which he pays the Russian gas lobby. The once well-known deputy has become a kind of public relations manager of the energy policy. The former politician supports projects like Nord Stream 2 and, as a private consultant, and as a research assistant. At King's College in London, Pfluger founded the European Center for Energy and Energy Security (EUCERS), and a year before leaving politics, Pfluger opened Pflüger International in Berlin. One of the most well-known clients of Pfluger consulting firm is Gazprom’s subsidiary Nord Stream-2, that is, the company that is currently promoting the construction of a second gas pipeline from Russia to Mecklenburg-Western Pomerania across the Baltic Sea. In 2016, the Pfluger Institute at King’s College in London published two studies on the feasibility and geopolitical significance of the gas pipeline. The result of the study was clearly in favor of the project.The new gas pipeline will allegedly strengthen the energy security and competitiveness of Europe and will be beneficial for European consumers. One of the studies was sponsored by gas pipeline investors Shell, Engie, Wintershall, Uniper and OMV. In addition, at that time Ilya Kochevrin sat at the EUCERS Scientific Council, and he is the director of Gazprom Export, a subsidiary of Gazprom.
Pfluger skillfully uses the good connections that he established while being a member of the Bundestag and foreign policy expert of the CDU / CSU faction - since 2009 he has been holding discussions on energy issues in the Reichstag, where eminent politicians and entrepreneurs are invited. At the same time, being the director of EUCERS, Pfluger gives an interview about the scientific assessment of Nord Stream-2. So, at one of the economic forums, he spoke with the German service of the state channel Russia Today.
Contacting the right people to promote Nord Stream 2 Pfluger also tries in Brussels: according to an investigation by Lobbycontrol, in 2016, he twice failed to invite to the event dedicated to Nord Stream 2, Maros Shefcovic, President of the European Commission on Energy.
And there are a lot of such lobbyists of Russian gas interests, like Pfluger, in Germany. Unfortunately, it is especially easy for them here to act as neutral experts in society and to disguise their real function, since there is no register of lobbyists in Germany. This leads to the fact that the focus of such extremely relevant projects as Nord Stream 2 is only odious individuals like Gerhard Schroeder, and not the entire lobbyist network, including former politicians of various parties and movements.