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Vladimir Litvinenko told who will lose if Northern Stream-2 is not completed

Северный поток - 2
Фото © Nord Stream 2/Wolfram Scheible

An energetic discussion is going on in Western mass media regarding the future fate of the Nord Stream 2 trans-Baltic pipeline, which was supposed to provide the EU with an additional 55 billion cubic meters of natural gas annually. The controversy accompanied the project from the very beginning and recently it flared up with a new vigor after the German Chancellor Angela Merkel announced the results of a toxicological examination, allegedly carried out in the Bundeswehr secret laboratories.

According to German scientists, the intoxication of Russian opposition leader Alexei Navalny was caused with the use of Novichok, the same poison with which Sergei Skripal, a former GRU officer recruited by British intelligence, was poisoned in Salisbury two and a half years ago. As always, there is no evidence; nevertheless, many Western politicians did not hesitate to seize the opportunity and called on Brussels to roughly punish Moscow, that is, introduce new sanctions against it. And at the same time, they offered Berlin to reconsider its attitude towards Nord Stream 2 due to new circumstances and refuse to complete its construction.

As always, the Poles are at the head of the anti-Russian coalition. The Prime Minister of this country Mateusz Morawiecki explains from the pages of the German newspaper Frankfurter Allgemeine Zeitung that from the point of view of Warsaw, a constructive dialogue between Moscow and Europe is no longer possible. He recalls that “the poisoning of Navalny is far from the first unacceptable action by Russia in the international arena.” According to the prime minister, there were a lot of them before, “from stirring up the situation in Nagorno-Karabakh and ending with aggression in Georgia and Ukraine.”

“You can't threaten Russia with your index finger from afar and then get involved in the Nord Stream 2 project with Gazprom,” Moravetsky writes.

Северный поток - 2
Фото © Nord Stream 2/Aксель Шмидт

A number of German politicians support him. So, German Foreign Minister Heiko Maas, speaking on the air of the ZDF channel, made it clear that a ban on the completion of the pipeline could be one of the response options.

“We cannot say that since the sanctions do not work, then there is no need to impose them. Sometimes we have to put up with the risk of consequences, thereby arguing that we do not want to live in a world without rules,” said Maas.

Chancellor Angela Merkel also partly supported him. She, as before, calls Nord Stream-2 a purely economic project, but now declares that the final decision on its fate will be made with the account of the “common European, not only German position.” According to her, Berlin, before formulating its opinion, “needs to be aware of the European reaction to the Navalny case.”

It is rather difficult to understand exactly what Frau Merkel means. After all, the very reaction she is talking about is very heterogeneous, both in the EU and in the FRG itself. For example, a spokesman for the country’s Ministry of Economy told Reuters that the construction halt would have “a very strong impact on the supply of energy to Germany.” This means that it will become a stopper of its economic development.

Oliver Hermes, chairman of the German East Business Association, warned that stopping the project would increase investor’s distrust. After all, European business has invested significant funds in it, and now they can merely disappear. In addition, Mr. Hermes noted that the abandonment of Nord Stream 2 “will leave Europe with less gas and higher prices.”

северный поток
Фото © Nord Stream 2/Aксель Шмидт

“I want an investigation. One of the developers of Novichok is based in the United States. It is known that many special services have this poison. Of course, the Russians have it too. But if Putin did it, then why did he release Navalny to Germany? So that we would know about everything? A crime must have logic,” says Bundestag deputy Gregor Gizi.

Austrian President Alexander Van der Bellen also stated after a meeting with his Ukrainian counterpart Vladimir Zelensky that the “attempt” on the Russian opposition leader Alexei Navalny should not be related to the completion of the Nord Stream 2 gas pipeline.

“I personally see no connection between Nord Stream 2 and the Navalny case. This is a commercial project,” the politician stressed.

So what awaits Nord Stream-2, which has recently become a real battleground for the European gas market? And, most importantly, who will lose if it is not completed? Forpost asked the rector of St. Petersburg Mining University, co-chairman of the Russian-German Raw Materials Forum Vladimir Litvinenko to answer this question.

- Vladimir Stefanovich, let's figure it out, who will suffer the most if Nord Stream 2 is not reanimated?

Литвиненко
Фото © Форпост Северо-Запад /

- Any ending of this story, whatever it may be, will not have any significant impact on the prospects of our national economy. Russia will have no financial breakthrough if gas goes to Europe via Nord Stream 2. Likewise, we will not collapse if this does not happen. Yes, for Gazprom, of course, such a development of events will be quite painful: its losses will amount to about 2 billion euros a year. However, nothing vital for the company will occur: after all it will reorient those gas volumes that are reserved for Germany to other countries, primarily to China.

Although European private investors will lose much more: about 8 billion. In this regard, it is rather interesting whether Ms. Merkel, who acted as the guarantor of the deal, will be able to explain to them the mechanisms of compensation for these costs.

Another loser will be European consumers of electricity, who will not be able to keep receiving it at the current prices, already pretty high. There is no gas that should have been delivered to their homes and businesses this fall. And how will that be compensated? Probably, they will have to increase the supply of LNG bought on the exchange at market value. Yes, it presently is not too high, but the situation will definitely change. Quotes on the Dutch TTF have already gone from their minimum values ​​and exceeded the level of $ 130 per thousand cubic meters. This trend will continue as the demand for natural gas will continue to grow. This is the objective reality.

I do not understand why Mrs. Merkel creates problems for her citizens out of the blue, why she reduces the energy security of Germany, because the energy underlies the stable economic development of any state. And with such somersaults: today we build Nord Stream 2, tomorrow we don’t build it - there can be no talk of any sustainability.

Probably, this position was partly promoted by the last winter, which was very warm in Europe. But as soon as the cold weather hits and stays for at least ten days in a row, the tone of the German leadership will quite possibly change.

- Do you think of historical parallels? After all, all this, if I'm not mistaken, had already happened in the nineteen seventies?

Вилли Брандт
Фото © Андр А. Ков

Sure. Exactly 50 years ago, the German government, which was then headed by Willy Brandt, signed the so-called “deal of the century” with the Soviet Union. The Germans agreed to supply the USSR with large-diameter pipes and other equipment for the construction of gas pipelines, and we undertook to supply them with gas. In fact, this contract marked the beginning of the entire domestic gasification.

And the conjuncture back then was exactly the same as today. The Americans did their best to prevent an agreement, imposed an embargo, but West Germany made it clear to the United States that it needed natural gas supplies and, despite political differences, would cooperate with Moscow. This position has benefited both us and the FRG. The same will happen if the Nord Stream 2 is completed.

- Are modern German politicians incapable of such bold decisions?

- Many of our partners in Germany, participants in the Russian-German Raw Materials Forum, just like us, believe that the economy should be separated from politics. They are confident that Nord Stream 2 should be completed. First of all, because it is beneficial for Germany, and, secondly, because over the decades of cooperation in the raw materials sector, Russia has never given a reason to doubt the reliability of fulfilling its obligations.

We stood at the origins of the creation of European energy security. Moreover, we are talking not only about the “gas in exchange for pipes” deal, but also about the export of oil. In 1973, when the Arab countries refused to ship it to the states that supported Israel during the Yom Kippur War, it was the USSR that increased the volume of supplies to the Old World and allowed the West to avoid a serious fuel and energy crisis.

- How then to explain the position of the current German authorities? It could not be explained by the warm winters excusively?

СПГ
Фото © equinor.com

- Pressure from Washington, which is vitally interested in ousting Russian gas from the promising European market and replacing it with American. The first steps towards this have already been taken. Poland, for example, has created a complete infrastructure for economic development with LNG. Spain, Britain and France have significantly increased their imports from the US last year. Next in line is Portugal, where all contracts for the exploration and production of hydrocarbons were recently canceled; that is, now this country is 100% dependent on their supplies from abroad. The Americans are preparing the same fate for the FRG.

Russia, of course, is no stranger to the West labeling us as an enemy in order to deprive us of certain sales markets. But if earlier this happened exclusively on the political plane, as in the case of the same Navalny, now climatic attacks have been added to the assaults.

In recent years, Western society has formed the opinion that global warming is taking place on the planet due to the use of hydrocarbons. This means that in order to save humanity, it is necessary to switch to clean energy as soon as possible, that is, to abandon the use of oil and gas.

In fact, the impact of anthropogenic CO2 emissions on climate change is greatly exaggerated. But this topic is well-known; it worries many people who do not think too much about the catastrophic consequences of a rush to change the energy structure. People sincerely believe that the fuel and energy complex today or, in extreme cases, tomorrow, will indeed be able to do without fossil fuels. It is enough just to show political will.

This situation leads to the fact that many politicians support this myth for the sake of voters' votes and promise to save their countries from greenhouse gas emissions in the nearest future. As a result, appeals for cooperation with Russia in the field of traditional raw materials are beginning to be perceived with distrust. In society, doubts arise: do we really need gas? Perhaps we are already able to replace it with wind or sun?

ветрогенератор
Фото © fortum.com

Unfortunately, at the current stage of technology development, it will definitely not work. Refusal from Nord Stream 2 will not lead to an intensification of the introduction of wind generators and solar panels, but only to the fact that the EU's need for the LNG will increase, which the United States will not fail to take advantage of. The share of the EU in the export of liquefied gas from the United States, had increased from 14 to 39% last year, and will keep growing. This is money, and a lot of money. As you know, it does not smell, so in the fight for promising markets, according to Washington, any means are good.

- Perhaps hydrogen will save Germany, which has been much talked about lately, including from the high stands?

- Apparently those who are talking about this have read the famous science fiction writer Jules Verne, who in 1874, in his novel “The Mysterious Island”, predicted that it would be hydrogen that would replace coal. That is, humanity will learn to separate it from water and thus receive a perpetual motion machine. But literature is quite different from the laws of physics.

Scientific research in this line has been going on at the Mining University for a long time. We believe that H2 will continue to be in demand in chemistry and oil refining, it will occupy a local niche in the energy sector, but it will not be able to replace natural gas or oil. This will be hindered by many factors, in particular, high production costs, as well as the lack of reliable storage and transportation technologies. If anyone thinks that hydrogen can be exported through the current pipeline system, then such person is wrong. After all, this is a very active gas; it will simply destroy metal structures, attacking them, first of all, in the places of welded seams. Therefore, the bet on the first number of the periodic table is not just incredibly risky, it is utopian.

At the end of August, we held an online meeting of the organizing committee of the Russian-German Raw Materials Forum, which was devoted to the use of hydrogen as an energy resource. Officials of the Presidential Administration and the Ministry of Energy of the Russian Federation, the German Federal Energy Agency DENA, representatives of the largest energy and steel companies Uniper, Siemens, Verbundnetz Gas, ThyssenKrupp, NOW, Stahl-Holding-Saar, Salzgitter, Energie-Agentur, Gazprom, Technological the Karlsruhe Institute, the German Aerospace Center, other holdings and organizations took part in it. Many representatives of the German business community later admitted that this meeting dispelled their illusions about the prospects for the lightest gas in nature.

Российско-Германский форум
Фото © Форпост Северо-Запад /

In the photo: 2018. Potsdam. Russian-German Raw Materials Forum

- That is, if I understood correctly, Berlin and Brussels are facing a dilemma: either LNG or Nord Stream 2. Returning to the beginning of our conversation, is Russia still interested in the pipeline being completed and the choice made in its favor?

- Russia, of course, is interested in preserving sales markets, in progressive social and economic development, in improving political relations with its partners. The main thing is that when making a final decision, they should be guided by common sense, and not by political engagement. After all, we are talking not only about who will dominate the EU gas market, but also about preserving the economic potential of the European Union.