Baltic Sea pipeline Nord Stream:When Russia turned on the gas tap

For a long time, the construction of the Baltic Sea natural gas pipeline was controversial, and neighboring countries and environmental organizations have expressed strong criticism. Years passed before gas started flowing from Russia to Lubmin on September 6, 2011. The follow-up project Nord Stream 2 is on hold because of the war in Ukraine.

by Katharina Tamme

Four days after the then Russian Prime Minister Vladimir Putin opened the gas tap at the beginning of September 2011, the first gas arrives from the small Siberian town of Portovaya near the Finnish border at the landing station in Lubmin, in the outermost tip of Mecklenburg-Western Pomerania. However, it cannot be used for heating, it is rather an auxiliary gas with which the necessary pressure can be generated in the pipeline for future natural gas deliveries that are to reach Germany before the heating period. The idea of ​​a gas pipeline through the Baltic Sea, which connects the Siberian natural gas fields with the energy-hungry industry in Central and Western Europe, was almost 30 years old when the pipeline went into operation on November 8, 2011. Russia has been supplying Germany with natural gas via Eastern Europe for over 50 years. This energy relationship has always been a thorn in America's side, both economically and politically.

Pipelines also mean political dependency

An offshore solution was already being considered in the 1980s, but the collapse of the Soviet Union intervened. In the 1990s, there were more serious efforts to plan a pipeline through the Baltic Sea that would directly connect Siberian natural gas fields to Central and Western Europe. The background is Russia's desire to become more independent of transit countries such as Ukraine and Poland. Lithuania and Ukraine in particular are in constant conflict with the former Soviet Union due to their desire for independence whenever contracts for gas transit are renegotiated. To date, Ukraine, Lithuania and Poland are the biggest inner-European critics of the Nord Stream project.

Having more leverage:gas transit as a means of exerting political pressure

For the transit countries, the onward transmission of Soviet gas to Western Europe is always a lucrative source of income and at the same time a means of exerting political pressure on Russia. Both the Soviet Union and later Russia repeatedly use the gas tap as a weapon against politically undesirable developments. Ukraine in particular is feeling the downside of the Russian gas supply monopoly as the country moves closer to the West in the wake of the 2004 "Orange Revolution". Russia reacted to Ukraine's struggles for independence with a gas freeze, and in 2009 even stopped gas transit completely, causing energy bottlenecks all the way to southern Europe.

Nord Stream planning changes power structure in Eastern Europe

Initially, the Baltic Sea pipeline was also supported by the European Commission, which included the project in its directive for the Trans-European Energy Networks (TEN-E) in 2000. The aim of this directive is to promote projects that are in the common interest of Europe and to create a diverse, "shock-resistant", cross-border and networked energy infrastructure for all European countries. Nord Stream 2006 is once again confirmed as such a "priority project". Criticism within Europe, however, was voiced as early as 2004 when Poland and Lithuania joined the European Union. The former transit countries, which were economically and energetically dependent on Russian gas at the time, see Nord Stream as serious competition.

The construct Nord Stream AG

To implement the project, the Finnish-Russian North Transgas OY (NTG) was founded in 1997, which commissioned feasibility studies and researched possible routes, including mainland routes via Finland and Sweden. In the same year, the most important industrial nations sign the Kyoto Protocol and agree on binding reductions in harmful greenhouse gases by 2020. Future natural gas from the pipeline is being considered as a substitute for coal because it releases less harmful carbon dioxide when burned. In 2003, the Russian Gazprom takes over the NTG consortium and the project is renamed the Northern European Gas Pipeline (NEGP).

Russian state-owned company Gazprom is the largest shareholder

In the middle of 2004 the plans finally become concrete. Wintershall Holding GmbH, a subsidiary of BASF, and the largest German gas importer E.ON (later E.ON Ruhrgas AG) sign a declaration of intent together with Gazprom for the construction of the 1,224-kilometer double-strand pipeline through the Baltic Sea. The estimated costs at the time were around four billion euros. In 2007 and 2010, Dutch and French energy companies also acquired shares in the pipeline project. 51 percent remain with the Russian state-owned company Gazprom, while German, Dutch and French companies share the remaining 49 percent.

"Gerdprom":The Nord Stream deal is a done deal

What is particularly noteworthy is the role that Chancellor Gerhard Schröder played in the creation of the treaty and its design, and who openly stood for the intertwining of politics and business on the open campaign stage. On September 8 - just ten days before Schröder's 2005 federal elections - Gazprom and the German companies sign the contract for the operating company based in Switzerland - in the presence of Chancellor Schröder and Russia's President Vladimir Putin. As with previous natural gas deals between German energy companies and Russia, this deal is secured with loans from German banks and a billion-dollar guarantee from the German treasury. Government officials gave the go-ahead on October 24, two weeks after Schröder announced that he would be retiring from politics and barred from the chancellor's office. Shortly thereafter, in December 2005, Schröder was appointed chairman of the supervisory board of the consortium, which from October 2006 was given the name Nord Stream AG. "Gerdprom makes it possible", headlines Die Zeit.

Neighbours' concerns:slump in tourism and possible espionage

The signing of the treaties also triggered some violent protests within Europe. Poland fears competition from Nord Stream for its own route and a collapse in transit fees. In this context, the Polish Defense Minister Radosław  Sikorski, who compares the 2006 German-Russian treaty with the Hitler-Stalin pact. In his opinion, Schröder should have coordinated with Poland before the project was completed. Criticism also comes from Sweden. The Scandinavians are worried about their tourist island of Gotland near the route, about environmental impacts on the Baltic Sea and possible Russian espionage about the safety and maintenance structures of the pipeline. In particular, an approximately 70 meter high maintenance platform initially planned off Gotland becomes a bone of contention in this context, but can be prevented by Sweden. In terms of energy policy, Sweden considers the construction of the pipeline to be questionable even in the planning phase. The country, which was already heavily reliant on renewable energies at the time, rejected the offer to also obtain Siberian gas via a branch. According to the Swedish Ministry of Economic Affairs, they do not want to replace their dependency on oil with new dependencies on gas. Denmark, initially planned as a branch, is also turning its back on the pipeline and causing changes to the route near the holiday island of Bornholm.

Cross-border environmental impact assessments

In addition to Sweden, Finland and the Baltic states as well as numerous associations have environmental concerns about the construction. The Baltic Sea Pipeline is a cross-border project that runs through the territorial waters or exclusive economic zones of Russia, Finland, Sweden, Denmark and Germany. Therefore, comprehensive environmental impact assessments had to be carried out for each country along the entire route and approved by each of the neighboring countries - a huge bureaucratic effort in a short time corridor.

Mines and contaminated chemical sites complicate planning

Environmental damage is feared above all when crossing water protection areas. But the heavy munitions load in the Baltic Sea and chemical contamination also make the final planning of the route considerably more difficult. Both world wars had resulted in the inland sea being heavily mined. A total of 435 munitions finds will be found during the seabed survey along the proposed route, according to Nord Stream, 134 will recover naval and explosive ordnance disposal services, and some will be bypassed during planning and construction. In addition, more than 150 shipwrecks are found along the route, some of historical importance. Environmental groups in Germany also fear that dredging for the route of the gas pipeline on the seabed will release large amounts of nitrogen and phosphorus - and thus massive damage to the ecosystem of the Baltic Sea.

Environmental organizations WWF and BUND are suing Nord Stream

In addition to general objections from environmental protection organizations against the construction of the natural gas pipeline - the pipeline promotes a fossil fuel that can only be used for a few decades and, in the worst case, delays the energy transition due to rigid contracts with long terms - there are also specific ones. The environmental organizations WWF and BUND are suing against the construction of the Baltic Sea pipeline before the Greifswald Higher Administrative Court. They fear a far greater impairment of the Baltic Sea than Nord Stream presented in the planning approval process. In addition, the planned compensation measures by the pipeline operator Nord Stream are insufficient.

Foundation capital for the environment against building freeze lawsuit

However, there is no halt to construction. Instead, the establishment of the German Baltic Sea Nature Conservation Foundation is announced in 2011, the purpose of which is "to protect the sensitive Baltic Sea ecosystem". WWF Germany and BUND Mecklenburg-Vorpommern share the chair. The foundation capital comes from Nord Stream AG:ten million euros. In return, BUND and WWF are dropping their lawsuits against the planning approval process and refraining from halting construction.

Construction begins even before approval

The construction of supply lines to Nord Stream on the Russian and German side is running parallel to the explorations, environmental assessments and approval procedures of the neighboring countries. In Babayevo, Russia, construction work for the land connection from the Siberian natural gas fields to Portovaya will begin as early as 2005. After the governments of Denmark, Finland and Sweden gave permission for construction in 2009, Germany's approval will follow in December. On April 6, 2010, the "Castoro Sei" - an Italian special ship - starts to lay the first pipes from Vyborg towards Lubmin. The concrete-coated steel pipes, which are around twelve meters long and weigh around twelve tons, are only welded together on the deck of the pipe-lay vessels, which then lower the pipes into the water using special equipment. Around three kilometers a day are laid in this way. Support comes a month later from the Italian pipe-lay vessel "Castoro 10" and the Swiss "Solitaire". The approximately 200,000 required pipes are stored in the Sassnitz-Mukran ferry port, among other places, where they are coated with concrete before they are shipped.

Lubmin as a northern European gas hub

In February 2010, construction of the landing station in Lubmin will begin. It is a strategically important hub between the Nord Stream Baltic Sea pipeline, the OPAL, which runs through Mecklenburg-Western Pomerania, Brandenburg and Saxony to the Czech Republic, and the North European Natural Gas Pipeline (NEL). This runs across northern Germany and extends to Rehden in Lower Saxony. In May 2010, dredging work began in front of the landing station in Lubmin in the Greifswalder Bodden, which lasted until the end of 2010. Already in May 2011 the last pipe will be welded to the first string and laid in front of Gotland. In September 2011, Nord Stream will be connected to OPAL in Lubmin. In September 2011, the first line will be officially opened, the second line will go into operation in October 2012.

German-Russian-American natural gas controversy

The gas pipeline, which transports Siberian gas through the Baltic Sea to Germany, has not only been a controversy that contains political explosives since the discussion about Nord Stream 2. The initial situation:Russia and the USA already had the largest natural gas deposits in the world in the middle of the 20th century. While the USA mainly serves its own market but exports little, Russia is the export world champion when it comes to gas deliveries abroad. Europe is considered to be the most lucrative sales market. Right in the middle is the aspiring Federal Republic of Germany, whose energy-hungry industry is growing, but which stands politically between the two great powers that are locked in a Cold War with each other.

Gas business with an international dimension

As early as the late 1950s - at that time the Soviet Union and the still young Federal Republic of Germany - were toying with the idea of ​​swapping cheap Russian gas for pipelines imported from Germany. Even then, a NATO pipe embargo, which included the export of large pipes for gas and oil pipelines, thwarted these plans. In the early 1970s, under the influence of Willy Brandt's policy of détente, the deal finally succeeds and thus forms the actual starting point for German-Russian natural gas relations.

The Soviet Union and the metal industry in the Ruhr area agree on the first joint gas agreement and exchange pipeline tubes from the Ruhr area for a 20-year natural gas contract with Ruhrgas AG. Loans from German banks and German state guarantees secure business with the Soviet state-owned company. With BP and Shell as shareholders in Ruhrgas AG and their relationships with the US group Exxon, German, Dutch and British companies with US participation are sitting at one table in this deal between West German industry and politics and the USSR. Criticism comes from NATO partners:they fear too much rapprochement with the Eastern bloc. The fear that West Germany could become too dependent on Soviet energy supplies for its energy supply was also present at the time.

Dispute over Yamal pipeline reminiscent of Nord Stream conflict

The game repeats itself with the second oil crisis. West Germany under Helmut Schmidt wants to diversify energy imports and invest in the Yamal pipeline, which is supposed to deliver Soviet gas to Central and Western Europe via Belarus and Poland. In the middle of the Yamal pipeline negotiations, Soviet troops invade Afghanistan. The subsequently imposed US technology and energy embargo against the USSR torpedoed - again - the German-Russian gas deals. In return, the United States will offer American coal and nuclear power, as well as oil and liquid gas. In this country, however, people continue to rely on joint economic projects in order to remain politically "in dialogue". With the signing of the contracts for the Yamal pipeline in 1981, Soyusgaz, now Gazprom, and Ruhrgas AG, now E.ON, agree on gas deliveries from the mid-1980s to 2008.

Nord Stream 2:German-Russian-American economic thriller

With the planned doubling of capacities and the planning for the construction of a second double-strand line between Vyborg and Lubmin, old lines of conflict are tearing up again. The decisive factor is above all the annexation of Crimea by Russia in spring 2014, which also leads to growing conflicts between Russia and the USA. The fact that the USA is getting involved is mainly due to economic reasons. North America, which has now become the world's largest natural gas producer thanks to fracking, is pushing into the European market with liquefied natural gas (LNG). This is considered dirty, inefficient and uneconomical, since it is produced in an environmentally unsafe manner, has to be shipped at great expense and arrives in Europe with high energy losses. All things considered, US LNG gas is currently uncompetitive. However, it is more flexible to buy than Siberian gas, whose contract terms of 20 or 30 years primarily benefit the Russian economy. Economic sanctions from the US side are delaying the construction considerably, Mecklenburg-Western Pomerania reacts to this by founding a so-called climate foundation, whose main purpose is the completion of the now eleven billion expensive pipeline without sanctions.

Poland is pursuing its own interests in the gas dispute

Poland and the USA are taking a joint front against Nord Stream 2:In 2016, the Polish antitrust authority initially achieved that the second pipeline may not be operated as an international consortium like Nord Stream 1. The sole shareholder is now 100 percent Gazprom. Western partners act solely as lenders. Secondly, the USA also want to work together with Poland on energy policy. On the initiative of Poland, US President Trump is promoting the expansion of a European north-south route as a competitor to the Russian east-west pipeline. According to Trump, the linchpin should be the Polish liquid gas terminal in Świnoujście (Swinemünde) as a gateway to Eastern Europe. Meanwhile, Poland is working together with Norwegian gas and Denmark as a transit country to compete for Nord Stream 2:Baltic Pipe is scheduled for completion in 2022.

Natural gas:bridging technology or obsolete model?

Even at EU level, the international natural gas business has not had it easy in terms of climate policy since the European "Green Deal". The European climate protection goals formulated therein envisage a completely carbon-free energy sector in the EU by 2050 - fossil fuels and thus also natural gas are therefore an obsolete model and not the "bridging technology" invoked by politics and business as an intermediate step to climate neutrality. A study by the German Institute for Economic Research (DIW) goes one step further:Europe never needed Nord Stream 2. Not for security of supply and not for diversification, it says there. According to the analysis, the European natural gas demand was overestimated in all reference scenarios on which the planning and approvals were based.

A good decade after Russia opened the gas tap in the direction of Lubmin, the Nord Stream 2 gas pipeline has also been completed. However, gas does not flow. The approval process for the pipeline project has been put on hold in response to the Russian attack on Ukraine.