This afternoon, a ship called Solitaire in the Gulf of Finland started laying the first deep water pipes for the controversial Nord Stream 2 project – a strong signal that the new pipeline from Russia to Germany is now unstoppable.
Until today, construction on the pipeline has been limited to onshore and territorial waters at the Russian departure point near Saint Petersburg and the German arrival point near Greifswald.
Solitaire, which is carrying 420 workers, will lay pipes around the clock seven days a week – assembling the 12-metre, 24-ton pipes on-board before laying them on the sea bed. Three kilometres of offshore pipe can be laid on the sea bed per day, and Nord Stream expects to complete the pipeline by the end of next year.
The rapid pace of construction has raised eyebrows because it is happening even as the project seems to be in political peril. In Germany more and more politicians are speaking out against the pipeline and Chancellor Angela Merkel has sometimes appeared to be wavering in her support.
The pipeline’s detractors, which include almost all the governments of Eastern Europe, say the pipeline puts the European Union’s energy security at risk because it makes the bloc more dependent on Russian gas. They also say it is designed to punish Kiev, enabling Russia to shut down its existing pipeline bringing gas to the EU through Ukraine. The United States is supporting them in their objection.
In July, U.S. President Donald Trump went on a now-notorious public rant against the pipeline, accusing Germany of making itself “completely dependent” on Russian gas. He has also threatened to sanction European companies who invest in the pipeline.
Trump’s diatribe seemed to be more targeted at Germany than at Russia, and energy analysts suspect that there are commercial reasons why. The United States wants European countries to start importing American liquefied natural gas (LNG), a byproduct of the country’s newfound gas surplus from the shale gas boom. Moscow has accused Washington of trying to kill the pipeline in order to force countries like Germany to import US LNG. The Americans, meanwhile, say it is better that the Europeans get their gas from an ally than from a foe.
Russian gas currently accounts for just 4.3% of German power generation, though this proportion is rising and would increase significantly with the completion of Nord Stream 2.
Disagreement between EU member states on the issue has prevented the approval of a mandate to negotiate rules for the new pipeline with Russia’s government-controlled Gazprom.
And Yet, It Floats
Given all the intense political opposition, what makes Nord Stream so confident that the project is going forward as to invest millions in beginning construction?
The truth is there are not many legal avenues left to block it. Gazprom argues that the pipeline does not need an authorisation from the EU, only from the countries through which the pipeline passes – Finland, Sweden, Denmark and Germany. It already has three of those authorisations.
The company points out that Nord Stream 1, the existing pipeline which the new pipeline will follow, did not need such an EU authorisation.
Denmark is the only country that hasn’t authorised the pipeline, and at the moment it looks quite likely that it will reject it passing through its territorial waters. But Nord Stream isn’t worried. Why? Because if Denmark does rejects, the company will simply change the route.
Right now the pipeline is planned to skim the East coast of the Danish island of Bornholm, which lies far away from the rest of Denmark, to the South of Sweden. Because the pipeline would go through Danish territorial waters, the government could use foreign policy concerns (the fear of Russian energy domination) as a justification for rejecting the application to construct the pipeline.
However, though Denmark could use such reasoning to reject a pipeline in its territorial waters, it could not use that argument to reject a pipeline through its ‘exclusive economic zone' in international waters – defined as an area that extends 370km from a country’s territorial waters. Nord Stream could simply shift the pipeline to international waters to avoid Denmark’s rejection.
Counterintuitively, the pipeline would actually be moved to the West of the island, closer to the rest of Denmark, to avoid the country’s territorial waters. Nord Stream put in just such an application last month.
Though it might seem to make more sense to shift the pipeline further to the East, there is a complex reason why this is not a good idea. Just to the island’s East lie international waters that are disputed between Denmark and Poland – the lead opponent of North Stream II. This would be difficult because of both Poland’s strong opposition and the dispute between the two countries. So the pipeline could be shifted to the West, into the international waters between Sweden and Denmark.
When it comes to approval of projects within a country’s EEZ, only safety or logistical concerns can be used to deny them – not political ones. It is highly unlikely Denmark would risk rejecting a project in its EEZ for obvious political reasons, given that it has historically relied so heavily on commerce from its important trading route waters. The government would risk being seen as an untrustworthy maritime operator.
With that, Moscow sees little standing in the way of the new pipeline. All of this could change if Angela Merkel changes her mind. But at a summit with Russian President Vladimir Putin last month, the German chancellor gave little indication that she is prepared to do so. At this point, opposing the pipeline could look like she is giving in to pressure from Trump - which would also be politically unpopular.
Date: Sep 6, 2018