The controversial North Stream II project in the light of the Navalny Case
The Nord Stream II project has been a convoluted project since its conception. It consists of the construction of a gas pipeline in the Baltic Sea. It is supposed to double the gas imports of the Nord Stream I, from Russia to the EU (capacity of 55 billion M3), at a time when the European policies are converging towards energy independence. The project is half financed by the Russian company Gazprom, the other half is financed by several European companies (Engie, OMV, Shell, Uniper and Wintershall Dea) for the modest sum of several tens of billions of euros.
Its construction is almost completed but has been delayed from December 2019 for many reasons that we will analyze. 120km remain to be built in Danish waters, 30km in German waters. Construction restarted in December 2020, but new constraints have appeared at the beginning of 2021.
One of the reasons standing against the project is the EU’s energy dependence on Russian gas. Russia is a strong state seeking to regain its former influence, especially in its ex-satellite states. To this end, gas remains a major strategic issue, as seen during the gas war with Ukraine, and in the Kremlin’s major participation in the Gazprom company. Some European states such as Poland, Ukraine, or the Baltic States are therefore standing up against the project to avoid further political interference in the security of energy supplies.
Threats to the project also come from the other side of the Atlantic. The United States is a major producer of shale gas and wishes to become an LNG (liquified natural gas) exporter on the European market, where costs are lower than in Asia. Hence, the U.S. competes directly with Russia and has developed new structures: Cheniere Energy invested in an LNG terminal in Sabine Pass, Louisiana, enabling gas to be delivered by LNG tankers. Other projects are also underway in Texas and Maryland. To increase the value of their exports, and to avoid excessive dependence on Russian energy, the United States has imposed sanctions on companies participating in the project. The American president, Joe Biden, is not going to change the current situation. Sanctions have been enshrined through the U.S. defense budget for the Fiscal Year 2020. Many companies such as DNV GL (Norway) have withdrawn from the project because of the American threat. In August 2020, French President Macron also expressed concerns about the project.
Today, the project is still threatened following the last european diplomatic conflict.
Alexei Navalny is a nationalist lawyer and activist specialized in anti-corruption, and also the main opponent of Vladimir Putin. On September 2 2020, he was hospitalized in Berlin after he collapsed during a flight to Siberia. Clinical findings indicated poisoning with cholinesterase, a substance that can be found in “novitchok”, a poison developed by the Soviet Union in the 1970s and 80s and then by Russia until the 90s. Navalny was treated in Germany until September 22 2020, when he was released from the hospital.
During his convalescence at the hospital, he organized his fight-back with meticulousness, revealing the situation in Russia: he denounced his poisoning as a consequence of having trapped a Russian agent on the phone, released a video about an investigation into ‘Putin’s palace’. Upon his return to Russia, he was arrested (he did not present himself for judicial control during his convalescence, following a conviction for embezzlement in 2014). He was sentenced on February 2 2021, to three years in prison.
The international responses did not wait. Numerous protests started all around the world, including with the presence of European diplomats, who were sometimes expelled after their participation in protests. According to Putin, the diplomat’s removals were due to “unacceptable and incompatible behavior with their status”. Relations with Europe became tenser and tenser and the EU, in turn, urged Russian ambassadors to leave German, Swedish and Polish territories. An arm-wrestling match ensued. Josep Borrel, the High Representative of the EU, visited Moscow on February 4. The abandonment of the Nord Stream project is put on the table, in order to put pressure on the Russian government and stop the repressions.
However, the question remains unanswered: Will Germany stop such a project? The Energiewende will end nuclear production in Germany by 2022, then the coal production by 2035. Renewable energies and natural gas will replace them. Furthermore, the main energy partner of Germany is Engie, a French company, that, as a reminder, is participating in the Nord Stream project. France, therefore, still has a piece to play on the Diplomacy’s chessboard, but the closure of the German nuclear power plants may also thwart its plans. Gas remains an important source of energy, less polluting than coal, having its place in the energy mix. The commission headed by Mrs. Ursula Van Der Leyen, however, is no longer in favor of the use of gas.
The stakes here are high: the energy transition, the diplomacy issues, the security of energy supplies … A case to follow very closely!