Energy expert Grigas: Germany displaying hypocrisy with Nord Stream 2

Agnia Grigas
DELFI / Andrius Ufartas

German participation in the Nord Stream 2 project is a display of its hypocrisy: Germany wishes to be the leader of the EU, uphold a principled positon on Ukraine and Russia, but at the same time wishes to participate in Nord Stream 2 due to its narrow interests, senior fellow at the US think tank Atlantic Council, energy and political risk expert Agnia Grigas commented for “Russian gas export goes hand in hand with the export of corruption and political influence, thus such involvement by Germany into Russia’s long term interests, I believe poses a threat to the future practices of the EU’s foreign and business policy and practice,” A. Grigas says.

Nord Stream 2. In Eastern Europe, there are numerous talks about how this is a Russian attempt to influence Europe through its gas. Slightly less talks mention that Nord Stream 2 is a massive German interest. How do you view this project? Do you observe Western European, particularly German hypocrisy?

For Russia and Gazprom it is naturally both a commercial and political project. With the international gas markets changing, this is an attempt by Gazprom to maintain its positions in Germany – their largest gas market. However, it is also an attempt to reinforce relations with Germany, which is the strongest and most important European Union country, especially post-Brexit.

On the German side, there are business interest groups, which back the project. The relations of Germany and Russia in the gas sector are very old, developed since the Cold War era and during this period, strong lobbying groups have emerged, which deal in lobbying for Russian gas. German participation in this project truly reflects its hypocrisy because Germany wishes to be the leader of the EU, uphold a principled positon on Ukraine and Russia, but at the same time wishes to participate in Nord Stream 2 due to its narrow interests.

Nord Stream 2 grants Russia the ability to supply gas directly to Western Europe, bypassing East Europe and Ukraine. This means potential billions in losses for Ukraine, it is a tool for greater Russian control of Ukraine. Angela Merkel assures that even though Nord Stream 2 will be implemented, Germany will pursue guarantees for Ukraine. However, is she truly able to obtain any guarantees?

German promises are its attempt at saving face. Of course, Germany will seek to cut a deal, perhaps will even secure a promise. From the Kremlin side, statements could be heard that Ukraine will be able to remain a gas transit country. However, I believe that there is little basis to believe that this promise will be upheld. Very few Kremlin promises are.

When Nord Stream 2 is completed, having an alternative gas supply infrastructure, Russia will be able to halt gas transit via Ukraine at any point. Even if the transit is not halted, it will always remain a tool for threatening.

What threats do you see in this project for us, Lithuania and Europe in general?

There are a number of threats. The Baltic Sea is greatly militarised, there are explosives left in it from the Second World War, Russian military exercises are held in it, thus there is an increasing risk of accidents. There is also the risk of spying, cyber-attacks.

Such a massive concentration of EU gas imports through one route is opposite to the official EU strategy to diversify gas imports. There is talk of not only diversifying the supplying countries for gas, but also the routes, through which the gas reaches the EU.

Russian gas export goes hand in hand with the export of corruption and political influence, thus such involvement by Germany into Russia’s long term interests, I believe poses a threat to the future practices of the EU’s foreign and business policy and practice.

How do you think, is it prevent the project? There were initiatives in the European Commission, but the Council of Europe legal service made the conclusion that the expansion of the gas directive’s norms, which is sought in order to extend EU law application to such projects as Nord Stream 2, would breach the United Nations Convention on the Law of the Sea. All the countries, in whose waters the pipeline would be present have agreed to the project, bar Denmark.

Not all is lost yet, but the fight is belated – Russia has already begun constructions. However, Denmark has not granted permission yet to build the Nord Stream 2 pipeline in its waters. The project’s organisers will seek a way, which bypasses Danish waters, but a different path is more problematic. It is one of the obstacles of the project.

Another safeguard is the looming US sanctions for the Western companies participating in the project. Currently three sanction packages are being debated in the US Congress. German company Uniper has stated that if the US implements the sanctions, it will withdraw from the project.

As such, the fate of this project hangs on US sanctions, German domestic politics and final decision, as well as the Western companies, which are participating in the project.

How can it be explained that European energy independence seems to be more of an interest for the US than Europe itself?

This US position remains unchanged since the Cold War. The USA was against soviet gas pipelines into Western Europe, during the tenure of Ronald Reagan, sanctions were implemented against a pipeline being constructed back then. However, at that time, the USA did not have liquefied natural gas, could not offer an alternative and was unable to prevent the construction of the pipeline.

The USA is maintaining a long-term state position on this matter and it is natural because the majority of EU member states are also NATO members and the USA, as the largest member of the Alliance and the security guarantee of the EU states, is interested for European countries to not become overly dependent on Russian gas and influence. It is paradoxical, however Europe is intent on obtaining stronger links to the country it hopes to be protected from by the USA.

Do you think that Russian capacities to perform gas geopolitics have remained the same now that the West, the USA seem to have come to a realisation of what it is doing?

Looking at the global gas markets, Russian capacities have weakened because much more competition has arisen. Countries, which have constructed liquefied natural gas terminals, have obtained a greater number of choices. The Southern gas corridor will also reach Europe, supplying it with gas from the Caspian Sea.

However, in terms of specific regions – Southeast Europe, Germany, we can see that Gazprom is striving to maintain its positions, bar entry to competition. That Gazprom has entrenched itself in these areas for so long grants it extra leverage against new players.

From the start of the constructions of Astravyets NPP, Lithuania had a very strict policy against this project. However, has Lithuania done enough to avoid the construction or perhaps it didn’t even have sufficient tools to change anything?

Serious actions against the construction of Astravyets NPP had to be done much earlier. Lithuania had to seek greater EU support, gather a coalition of partner countries. Lithuania alone will struggle to prevent the project, it could have only been done by EU leverage against Belarus. Belarus receives aid from the EU, thus it could have been a means to stop the construction.

One of the most important current projects for Lithuania is the synchronisation of electricity networks with Europe, however the works being done that will technically allow Russia to disconnect the Baltic States from the BRELL system, from Russia and Belarus, will be done earlier than the synchronisation is expected. Do you think Russia may use this opportunity to sever Lithuania from BRELL?

The Baltic States have long spoken about exiting BRELL, however there were more talks than work. If they complete the work ahead of synchronisation, I believe the Kremlin may exploit this. You can expect messages in propaganda news media, where this will be portrayed as the failure of the Baltic States. You can also expect it to become a tool of blackmail.

A. Grigas is an expert of energy and political risks as well as a specialist of US, Baltic States and post-Soviet countries foreign policy. She is also the author of the books The New Geopolitics of Natural Gas, Beyond Crimea: The New Russian Empire.

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