Real Opinion on Nord Stream 2 in Germany
The American establishment has once again called on Joe Biden to checkmate the trans-Baltic pipeline. Daniel Kochis, a senior policy analyst in European Affairs in the Heritage Foundation, made just another statement on the matter. He believes, "It is time for the United States to finally checkmate the project, which is neither economically necessary nor geopolitically prudent, and which harms transatlantic security". What is the opinion on that in Germany?
Local ecological activists are determined to fight Gazprom's project till they win. They keep organising press conferences and issuing press releases to tell about the negative environmental impact of fossil fuels and the need for reaching carbon neutrality to save the planet from global warming. In January, two local nature conservation groups - Environmental Action Germany (DUH) and Nature and Biodiversity Conservation Union (NABU) - even filed a complaint against the Federal Maritime and Hydrographic Agency of Germany (BSH) for allowing Nord Stream 2 to be built in coastal waters.
However, it is well known that "he who pays the piper calls the tune". Let's turn a blind eye to these associations' activities and look for less biased opinions. We shall see that the vast majority of Germans - politicians and ordinary citizens alike - are genuinely interested in seeing the project through. Even Svenja Schulze, Minister of the Environment, Nature Conservation and Nuclear Safety, fully supports it and considers it "very beneficial for the environment".
"We cannot abandon coal, gas, and nuclear energy at the same time. We will need natural gas to supply us with energy for at least another two decades. I don't mean just Germany. Given the decline in production throughout Western Europe, the rest of the EU is likely to need gas, too. In this connection, it is amazing that Manuela Schwesig, Minister-President of Mecklenburg-Vorpommern, has recently established a climate protection fund to facilitate the completion of Nord Stream 2," says Svenja Schulze.
The Germans' interest in the pipeline system, which could deliver an additional 55 billion cubic metres of gas per year, is evident. Moreover, Vice-Chancellor Olaf Scholz even offered the Americans a kind of "bribe" last August. At least, that is how his secret letter to Steve Mnuchin, who headed the US Treasury during Donald Trump's presidential term, was interpreted. The document was made public in February by the earlier mentioned DUH, which advocates an early phase-out of hydrocarbons, regardless of how it will affect the power sector.
Mr Scholz proposed the US investments of up to a billion dollars to build LNG terminals if their ally would refrain from imposing sanctions against companies in some way involved in the trans-Baltic project. Eco-activists called the proposal a "dirty deal", a "scandal", yet what to do if Germany needs the pipeline built and the "big brother" does not want it?
"I hope we can find partners amongst Biden's administration, and hopefully, its members will re-evaluate the situation judiciously and admit we need Nord Stream 2. Since we don't think it increases our dependence on Russia," expresses his cautious optimism Niels Annen, Minister of State at the Federal Foreign Offices.
It is unclear whether the White House is ready to reconsider the position of the previous administration. Even in the absence of new, long-promised sanctions against German companies involved in the project, they are rapidly withdrawing. For instance, Wintershall Dea is no longer planning to finance Nord Stream 2. The German gas & oil producer invested €730 mln in the pipeline construction, with another €220 mln scheduled before the cancellation. For years, the company's management had been calling Gazprom-owned pipelines an absolute bargain for European consumers. Therefore, a sudden change in the vision is unlikely, whereas the same cannot be said about the external pressure.
The German corporation is not the only one to have made such a decision. Other businesses followed. The US State Department's report to Congress says that most of these organisations are UK-based and provide insurance services. Switzerland's Zurich Insurance Group and France's Axa Group also ceased cooperation with Gazprom, recently joined by Uniper. The German energy company's top management informed they "do not intend to conduct payments in the future".
"We let European companies know they run the risk of being sanctioned if they don't give up on Nord Stream 2. Still, we demonstrated our allies we won't surprise them with rash actions", admits Ned Price, Spokesperson for the US Department of State.
So what will this long-drawn-out story end with? Will Europe get comparatively cheap and eco-friendly gas? Or skyrocketing energy bills and even more expensive German cars? Will Gazprom manage to recoup investments in the project and generate more revenues for the Russian budget? And most importantly, who will suffer the most if the US have it their way?
"No matter what the outcome will be, it won't have a significant impact on the domestic economy. Russia won't make a financial breakthrough even if the project is carried through. Likewise, no crisis will occur if it does not happen. This scenario is painful for Gazprom, of course - the corporation would lose about two billion euros annually. But it's not a catastrophe either. The gas volumes that are reserved for Germany will be eventually sent to other countries, most notably to China," argues Vladimir Litvinenko, Rector of St. Petersburg Mining University and Associate Chairman of the Russian-German Raw Materials Dialogue.
He believes that European households and businesses will lose more if Nord Stream 2 is not completed since the energy prices, which are already high, will soar further. Besides, not having enough natural gas might translate into the suspension of Germany's plans to stop coal generation.
"A fair share of our German business partners, participants of the Russian-German Raw Materials Dialogue, think like us: politics and economics should be separate. They're sure that completing the construction of the pipeline is necessary. First, it is in Germany's interests. Second, through the decades of cooperation in commodities, never has Russia given any reason to doubt the reliability of undertaken commitments", sums up Litvinenko.
For now, it seems that Nord Stream 2 will reach completion, but solely at the expense of the Russian side.