The Nord Stream 2 pipeline project is clearly showing itself to be one of the most polarizing issues in European political circles, and demonstrates in a very clear manner how foreign policy is perceived by European states. Some are able to forego certain aspects of their political hostility towards Russia in areas where insisting upon it would result in considerable damage to their own economic outlook, where others persist in their political russophobia regardless of the consequences. A former Turkish diplomat and finance and energy geopolitical expert discusses this subject with Sputnik, as well as the influence being exerted by Washington on the issue.
Denmark has claimed that it can legally stop the Nord Stream 2 project if it chooses to. Mehmet Ogutcu, a former Turkish diplomat and expert in finance, energy and geopolitics and who now chairs the investment advisory group Global Resources Partnership, as well as the Bosphorus Energy Club, has given his take on the prospects of the project.
Mehmet Ogutcu: This project is one of the most polarizing projects that the EU has ever discussed. I have no doubt that whatever the EU is doing right now, especially some factions within the EU, is politically motivated.
Mostly inspired by Washington, because the US is clearly against Nord Stream 2, for a couple of reasons; one being that they want to sell their over-priced LNG [Liquefied Natural Gas] across the Atlantic, which is not in the interests of the European Union; and the second one, it is often heard, that this project is going to increase the EU’s dependence on Russia, which is around 30 percent overall, as for Germany it’s about 40 percent.
These concerns are leading to confusion within the European Union, and I don’t think it is only the legal arguments that the European Commission is putting forward. And it’s really motivated by political imperatives, especially the US threat with sanctions on European companies, as it does also not only in the case of Russia, but Iran, starting from November 4.
There is a very clear push for banning Iranian crude exports. It’s part of a concerted effort from Washington to penalize countries which are not in line with US interests.
Sputnik: Denmark has recently withheld from granting permission for the implementation of the project. Several European politicians have stated that Europe no longer has hard legal leverage to halt the project. What’s your feeling regarding that matter?
Mehmet Ogutcu: Denmark is the last string among all other countries, so it has already passed through Finland, Sweden, so Denmark is the last one. I think again here, the US probably has used its influence to block this project, which has already left it almost 5 billion euros, almost half of the whole investment foreseen for the project.
I believe that the pressure is real, coming from Washington, and also the concern among Central European countries, some of them at least, is very real; with increasing dependence on Russia and the fear that Russia might be using the pipeline as leverage in its relationships with these countries.
And the fate of the existing Ukrainian gas transit route arrangement, which will expire in 2019, as you know, at the end of the year, when also Nord Stream 2 is expected to come on stream – that’s another serious concern, because when you look at it from outside, objective thinking requires that a route that is stable and direct without any transit country, should be preferable to Ukraine, where we know what difficulties are, in terms of transparency, in terms of political difficulties and additional costs. However, in this project, Nord Stream 2, we cannot look at it only from the commercial, rational [perspective].
There are very strong geopolitical imperatives that we have to bear in mind. Also, you have to think of Nord Stream 2, not in isolation from the TurkStream Project, which is going ahead full speed in the Black Sea coming to Turkey.
I think everything is on schedule for bringing Russian gas to the Turkish Thrace, there are two strings there as well; altogether we have about 31 bcm [billion cubic meters] of gas coming. Part of it will stay in Turkey and part, especially from the second pipeline, will go to South and South Eastern Europe.
Again, when you discuss Nord Stream 2, you have to see it in the broader context of other Russian projects coming also through Turkey. We have to understand different dimensions in this project.
As it stands, I don’t think we can say that Danish concerns or Eastern and Central European concerns can easily be done away. The US, through the trade wars that we saw the Trump administration start, through sanctions towards Iran, China, Russia are real, I don’t think they’re going to go away. But this might lead to some modifications of the dates and approach of Nord Stream 2, as well as Turkish Stream I think; although the first stream has been completed, there is concern whether US sanctions will also be felt there.
Following America’s withdrawal from the nuclear nonproliferation agreement with Iran (JCPOA), reactions from European leaders were like that of a pendulum swinging back from its prior orientation. French President Emmanuel Macron was quoted as saying “If we accept that other major powers, including allies… put themselves in a situation to decide our diplomacy, security for us, and sometimes even make us run the worst risks, then we are not more sovereign and we cannot be more credible to public opinion.” However, the Nord Stream 2 project demonstrates that this sentiment is not universal across Europe.
The pipeline would bring Russian gas to Europe, but is perceived as an ‘energy weapon’ wielded by Russia in order to exert its control by Eastern European nations Lithuania, Moldova, Ukraine, and Georgia. The perception from the political perspective of these countries is that there is a growing ‘Russian threat‘ that must be contained, and in terms of the Nord Stream 2 project, this means that it must be countered. For this reason, political leaders from these four countries have travelled to Washington, in hopes that they can lobby American politicians to exert their influence to help stop the Russian energy project:
Russian revanchism is a repeated concern for the governments of many of the Central and Eastern European states. For these countries, membership in western organizations including the European Union and NATO offers economic benefits, but comes with the risk that moving too far away from alliance with Russia will provoke some sort of aggressive response from the government of Vladimir Putin. On Wednesday, leaders from Lithuania, Ukraine, Georgia, and Moldova spoke to reporters and lawmakers at an event hosted by the American Foreign Policy Council, emphasizing the role that European energy security plays in global security and reiterating the need to both stop the Nord Stream 2 project and to promote the use of American energy and technology.
“Putin’s action is not limited to his aggression or use of military force. Russia’s sophisticated use of information warfare including cyberattacks is well know. Vladimir Putin also uses Russia’s energy supplies as a weapon against neighboring states. Nord Stream 2 is a political project that will increase Europe’s reliance on Russia,” said American Foreign Policy Council President Herman Pirchner.
The Nord Stream 2 pipeline is a proposed project that would bring natural gas from Russia through the EU to Germany. For the countries whose leaders spoke on Wednesday, the pipeline is far more than an infrastructure project. Construction of the pipeline would provide Russia with additional leverage over European countries, they warned.
“Nord Stream 2 is one of the elements of energy weapons used by Russia against the world,” said Ukrainian parliamentary chairman Andriy Parubiy, who spoke through an interpreter.
The importance of energy security is not lost on Ukraine, where Russia has used its control over the energy markets to enact political concessions. On two occasions in recent memory, Russia halted gas shipments to Ukraine in the middle of a winter cold snap until the government there agreed to price increases and political concessions.
“Ukraine knows for sure that gas supplies, for Russia, are not about the economy. For Russia natural gas, first of all, is a mechanism for political influence,” Parubiy continued.
While some analysts have questioned America’s involvement in the region, saying that it has provoked Russian revanchism, the leaders repeatedly expressed their desire to work with both the U.S. government and American businesses to expand their sources of energy. Allowing Russia to have a monopoly over energy supplies gives the Russian government a worrying amount of control over neighboring countries, the leaders emphasized.
“Nord Stream 2 is a political, not an economic, project,” said Lithuanian Speaker of the Seimas Viktoras Pranckietis.
For Lithuania, constructing a gas terminal which allows it to recieve gas shipments from overseas was an important step in reducing its dependence on Gazprom and Russian energy. After completion of the terminal, natural gas prices fell by 30 percent. Last year, Lithuania received shipments of American natural gas for the first time, a sign that its dependence on Russian energy was further weakening.
When possible, Lithuania, Moldova, Ukraine, and Georgia are looking for ways to become energy secure through the development of domestic energy sources or through trade with neighboring countries. This offers an opportunity for American businesses, many of which have the technical expertise these countries need.
“It is very important that U.S. business comes to this part of the world,” said Pranckietis.
The Moldovan government agreed.
“In order to have independence, we look for solutions and we found a solution. Now we are starting the process of building a gas pipeline between Romania and Moldova, because Romania in three years will have enough gas to cover their needs and our needs,” said Andrian Candu, chairman of the Moldovan parliament.
The countries see energy security as a vital part of their independence and warn that construction of Nord Stream 2 provides Russia with additional money to fund expansionist actions abroad, while spreading corruption in Europe. The pipeline still awaits approval in Europe and the speakers urged the American government to throw its influence against the project.
“Mark my words, Nord Stream 2 will be stopped,” said Parubiy with confidence.
Washington already has incentive to stop the project, both to secure a market for American shale gas, which is significantly more expensive for the Europeans than the Russian gas, as well as to counteract a major Russian energy programme, thereby countering Russian influence in Europe as well as to nix a plan that might be beneficial for the Russian economy as well as for European-Russian relations. Hence, while some European powers are looking to partner with Russia on some key issues, such as the JCPOA and the Nord Stream 2, others are looking for ways to participate in Washington’s plan of Russian containment.
Of course, the excuses being promoted are not quite as sensical in the present political environment, objectively speaking, as Europe finds itself under economic threat not from the Russians, but from the Americans, who are attempting to dictate to them their foreign policy, security, trade, and energy interests under threat of sanctions and a budding trade war. This rift in energy policy in some ways mirrors the division on Europe’s migration policy, with some nations agreeing to take in migrants while others outright refuse, with some EU member states investing in Russian energy programs while others intend to buck it, with all the help from Washington that they can muster. It would appear, then, that all of this talk about ‘an economy of trust‘ and Macron’s words about European sovereignty are falling on deaf ears among some European partners.