Nord Stream

Nord Stream AG, based in Switzerland, is a collaborative of five major companies responsible for the construction and operation of two gas pipelines that run from Russia to Germany. Nord Stream 1 began operation in 2011, while Nord Stream 2 was completed in early 2022 but was not in operation as of October of that year. Nord Stream 2 faced world criticism for political and environmental reasons. The United States government was among those against the Nord Stream 2 pipeline, and imposed a number of sanctions to stop it. Germany officially halted the project in February 2022 as a result of Russia’s invasion of Ukraine.

The project saw further setback in September 2022 when four explosions were detected in the underwater pipelines, resulting in four separate leaks. There was no gas running in the pipelines at the time of the explosions, but the lines contained massive amounts of methane gas. While the amount of methane gas released was roughly equal to one and a half days of regular global methane emissions, environmental groups called the incident an example of the continued problems associated with the fossil fuel industry. There is also concern that the blasts could have disturbed an area of the Baltic Sea that contains discarded World War II chemical weapons. This could further contaminate the sea and threaten marine life.

Background

Nord Stream AG is a company based in Zug, Switzerland. It is an international association consisting of five major companies: PJSC Gazprom, Wintershall Dea AG, PEG Infrastruktur AG, N.V. Nederlandse Gasunie and ENGIE. The five companies came together in 2005 to plan, construct and operate two 760-mile (1,224-kilometer) natural gas pipelines through the Baltic Sea.

The twin pipelines are known as Nord Stream 1 and Nord Stream 2. Nord Stream 1 became operational in 2011. Nord Stream 2 was completed in early 2022 but had not entered service as of late in the year. Together, these pipelines have the capacity to transport about 55 billion cubic meters of gas per year—enough to satisfy the European market. The pipelines cost $US7.3 billion with the majority of this (70 percent) financed externally through banks and export credit agencies. The other 30 percent was financed by Nord Stream’s shareholders.

Running from Vyborg, Russia, to Lubmin, Germany, the pipelines cross through Russia, Finland, Sweden, Denmark, and Germany. In addition, they pass through territorial waters of Russia, Denmark and Germany. These pipelines are the most direct connection between Russian gas reserves and the European Union.

The decision to build the pipeline was sealed in September 2005 when a joint declaration was signed by Russian President Vladimir Putin and German Chancellor Gerhard Schroder, who was running for re-election against Angela Merkel at the time. Schroder lost the election and immediately joined the board of directors for Nord Stream. Anna Kuchenbecker of the European Council on Foreign Relations called Nord Stream a “baby” of the special friendship between Schroder and Putin.

The new pipeline benefitted Russia financially, as it allowed the country to bypass transit countries that charged transport fees: Ukraine, Belarus, and Poland. Germany also benefits from the pipeline, as it provides the country a steady energy supply. German energy companies who were involved in the project were also rewarded by gaining a relationship with Gazprom, which could heighten their chances of getting involved with natural gas exploration in Siberia.

By 2014, Nord Stream came under major international criticism, particularly from the United States, after Russia invaded and took the Ukraine’s Crimea Peninsula. Some opponents also pointed to the environmental impacts of the pipeline, and the contradiction it represented, such a project put the European Union’s (EU) climate goals against a long-term investment in fossil fuel transport. Several EU member states also said that the project, combined with the TurkStream pipeline that delivers Russian gas to southeastern Europe, would eventually enable Russia to deprive Ukraine’s economy by starving it of much-needed transit revenue. That did not stop Merkel from giving her blessings to begin the construction of Nord Stream 2 in 2015.

The administration of US President Joe Biden opposed the continued construction of Nord Stream 2 and announced formal sanctions on Nord Stream 2 AG and its chief executive officer in February 2022. In that same month, Germany halted the project amid the worsening Ukraine political crisis. In response, Dmitry Medvedev, former Russian president and current security council chairman, taunted Europeans via Twitter, suggesting that they would pay twice as much for gas as a result.

Topic Today

On September 26, 2022, the twin pipelines experienced a number of explosions that caused four gas leaks in four locations. Two occurred in Denmark’s economic zone while the other two occurred in Sweden’s economic zone. The explosions were so powerful, they measured 2.3 and 2.1 on the Richter Scale. Swedish and Danish authorities said the detonations were likely linked to an explosive load of several hundred kilos. Neither of the pipelines were transporting gas when the explosions occurred—Nord Stream 1 stopped pumping gas in early September, and Nord Stream 2 had never gone into operation after the German government halted the project. However, they both contained pressurized methane, which is a powerful greenhouse gas.

Satellite images of the area picked up gas bubbling at the surface of the Baltic Sea from space. Denmark’s armed forces said that video footage showed that the largest gas leak caused a surface disturbance of about .62 miles in diameter. A British defense source said that the pipelines were probably detonated from afar using underwater mines or other explosives. According to the Reuters News Service, intelligence analyst Oliver Alexander said something of that scale could be done by Russia or the United States. However, he added that did not see the motivation for the United States to do such a thing since Nord Stream 2 had already come to a halt earlier in the year.

Most Western governments have heavily implied Russia was to blame for the explosions, while Russia has pointed its finger at the West. Many European nations, along with US President Joe Biden, called the blasts a deliberate act of sabotage. Biden said his administration was working alongside allies to find out what happened. Fatih Birol, the executive director of the International Energy Agency, told Reuters that it was obvious who was responsible for the leaks, but would not say who that was. Russia has denied responsibility for the gas leaks, however. Its Foreign Ministry spokeswoman Maria Zakharova called any claims of Russian involvement absurd because of the enormous investment that Russia made in the project. She also lashed out at Western nations for prohibiting Russia from taking part in investigations about the incident. Foreign policy experts have speculated that Russia may have caused the explosions as an act of intimidation against European nations, who have almost unilaterally condemned Russia’s war in Ukraine. However, according to some analysts, the explosions also represent a loss of leverage for Russia in Europe, which has been racing to find other gas supplies.

There is concern about the environmental impact of the explosions and resulting methane leaks. Methane is a strong greenhouse gas that contributes to global warming and is significantly more harmful than carbon. Over a one hundred-year period, one ton of methane causes as much warming as twenty-five tons of carbon. The Nord Stream pipelines were estimated to have contained enough of this gas to release 300,000 tons of methane. This is more than twice the amount released by the 2015 Aliso Canyon leak in California, the largest known methane release in US history. Climate scientists said the leaks caused by this explosion are just a fraction of the amount of methane that is emitted worldwide. The oil and gas industry alone emit around 70 million tons of methane each year. According to the European Space Agency, the Nord Stream leaks were about the same as one and a half days of global methane emissions. However, environmental activists still argued that the event highlights the risks associated with a fossil fuel economy. Climate scientists called the incident a reckless release of greenhouse gas emissions, and said if the act was deliberate that it was an environmental crime.

Researchers also turned their focus to the possibility that the explosions stirred up pollutants from chemical weapons that had been dumped into the sea after World War II. The explosions happened very close to the Danish island of Bornholm, a dumpsite for chemical warfare agents in 1947 after the demilitarization of Germany. Around 32,000 tonnes of chemical weapons that contained around 11,000 tonnes of active chemical warfare agents were disposed near the island at that time. Hans Sanderson, an environmental scientist at Aarhus University in Denmark, said he is concerned that the violent explosion of methane might have caused those contaminants to enter the water column, which could threaten marine life in the area. Some of the contaminants include radioactive isotope caesium-137, toxic flame-retardant chemicals, and heavy metals like mercury, cadmium and lead. Sanderson said the Baltic Sea is already one of the most contaminated seas.

Bibliography

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Marsh, Sarah, and Madeline Chambers. “Germany Freezes Nord Stream 2 Gas Project as Ukraine Crisis Deepens.” Reuters, 22 Feb. 2022, www.reuters.com/business/energy/germanys-scholz-halts-nord-stream-2-certification-2022-02-22/. Accessed 23 Oct. 2022.

Meredith, Sam. “Russian Pipeline Leaks Spark Climate Fears as Huge Volumes of Methane Spew into the Atmosphere.” CNBC, 30 Sept. 2022, www.cnbc.com/2022/09/30/climate-nord-stream-gas-leaks-sees-methane-spew-into-the-atmosphere.html. Accessed 23 Oct. 2022.

Pifer, Steven. “The Nord Stream 2: Background, Objections, and Possible Outcomes.” Brookings, Apr. 2021, www.brookings.edu/research/nord-stream-2-background-objections-and-possible-outcomes/. Accessed 23 Oct. 2022.

Plucinska, Joanna. “Nord Stream Gas ‘Sabotage’: Who’s Being Blamed and Why?” Reuters, 6 Oct. 2022, www.reuters.com/world/europe/qa-nord-stream-gas-sabotage-whos-being-blamed-why-2022-09-30/. Accessed 23 Oct. 2022.

“Russia’s Nord Stream 2 Natural Gas Pipeline to Germany Halted.” Congressional Research Service, 10 Mar. 2022, crsreports.congress.gov/product/pdf/IF/IF11138. Accessed 23 Oct. 2022.

Sanderson, Katharine. “Nord Stream Blasts Spark Concern Over Chemical-Weapons Contamination.” Nature, 21 Oct. 2022, www.nature.com/articles/d41586-022-03363-7. Accessed 23 Oct. 2022.

“The Nord Stream 2 Pipeline: Economic, Environmental and Geopolitical Issues.” European Parliament, 2021, www.europarl.europa.eu/RegData/etudes/BRIE/2021/690705/EPRS‗BRI(2021)690705‗EN.pdf. Accessed 23 Oct. 2022.

“Who We Are.” Nord Stream, 2022, www.nord-stream.com/about-us/. Accessed 23 Oct. 2022.