About the author: Margarita M. Balmaceda is a professor at the School of Diplomacy and International Relations at Seton Hall University, an associate at the Harvard Ukrainian Research Institute, and author of Russian Energy Chains: the Remaking of Technopolitics from Siberia to Ukraine to the European Union.
At 6:00 am Berlin time on Monday maintenance began on the Nord Stream 1 pipeline through which Germany normally receives more than half of its natural gas supplies.The work is scheduled to end at 6:00 am on July 21. Such servicing takes place every two years and normally gives no reason for alarm. The pipeline needs to be emptied for the service to take place, but normally sufficient natural gas volumes are kept in storage for such an occasion.
Things are different now. Not only were many gas storage facilities not fully refilled after the winter of 2020-2021, but in particular the facility in Rehden, Germany, owned by Russia’s state owned oil company Gazprom, remained nearly empty. With storage well behind target, there is increased uneasiness about what may happen should Gazprom decide not to resume supplies through Nord Stream 1. Ironically, the servicing started exactly a year after — in a now unthinkable act of trust in Russian supplies — the US and Germany signed an agreement backing the completion of the Nord Stream 2 pipeline.
Russia’s war against Ukraine has already contributed to a major social uprising in Sri Lanka, where skyrocketing prices of food and fuel drove people to oust their government. A satisfied Vladimir Putin seems to be playing with a similar possibility in the very heart of Europe.
There is indeed some precedent. In 2007, after emergency repairs on the Lithuanian branch segment of the Druzhba oil pipeline, Russia’s oil pipeline operator Transneft decided not to use that segment of the pipeline again. This year, in June, Russia reduced supplies through the Nord Stream pipeline by first 40% then 60% of the usual volumes, without increasing supplies through other routes, for example through Ukraine. Many in Germany fear the pipeline will not be filled again after the service is completed.
A high-stakes poker game seems to be playing out in the European Union following Russia’s all-out attack on Ukraine. Who will blink first? Who will unhitch from the other first? Will it be the EU by weaning itself off natural gas purchases from Russia, or Russia by stopping supplies? While some EU states such as Poland and Lithuania have indeed stopped these imports of their own will, Germany is in a different situation. In 2011 Germany received 32% of its total natural gas supplies from Russia. By 2021 — even after Russia’s 2014 invasion of Ukraine and formal sanctions on Russia — this figure had risen to 52%, Handelsblatt reports.
How did Germany get into this situation of depending mainly on one supplier and one means of transportation for its natural gas? It has to do with what I call the temptation of participation in Russian energy chains (the topic of my book of the same title). Buying Russian natural gas, and having it delivered to Germany directly rather than indirectly — via Ukraine, for example — was simply too tempting for too many actors for way too long. It appealed to everyone from corrupt politicians to regional administrations in the areas adjacent to the pipeline, and to German and European companies offered significant returns as members of the Nord Stream AG consortium. It was even tempting to some Green leaders who saw natural gas (which “happened to be” Russian natural gas) as a possible “least of all evils” bridge between high-emissions coal and oil and a future energy system based on renewables.
All of these players have now miraculously awakened to the dangers of energy dependency on Russia. Above and beyond their concerns, there are some realities to keep in mind. First, even the best-intentioned emergency plans to deal with a possible stoppage of Russian gas supplies — primarily rationing, but also passing on rising costs to the end consumers — may have severe social consequences. If the German government doesn’t deal quickly and proactively with these risks there is the chance of a real social conflict with very serious impact.
The most difficult challenge comes from industry. While it is relatively easy to replace natural gas for the production of electricity, it is much harder to replace for industrial uses. Industry consumes 37% of Germany’s natural gas, and some of these uses cannot be simply switched to electricity produced by other means, making industrial decarbonization the last frontier of decarbonization. It is exactly industrial players who are the most likely to lose should there be a total stoppage of Russian natural gas supplies. For example, chemical giant BASF is responsible for 4% of Germany’s total natural gas consumption. It uses natural gas mainly for industrial processes such as high-temperature chemical processes that turn crude oil into chemicals, but also as raw material for the production of ammonia and acetylene used for fertilizers and plastics production.
The possibility that Russia will not restart gas supplies to Nord Stream 1 is the elephant in the room these days in Germany. It’s not even necessary to say the words “Russia” or “possible stop of gas supplies” —these words are in everybody’s minds. Even in the middle of a heatwave, the possibility of a shutdown is sending a shiver through the entire country. This kind of uncertainty and panic is exactly what Vladimir Putin wants to create in Europe. Thus, even if supplies are restarted on July 21 as scheduled, the damage is already done. Thus, Putin’s goals have been achieved.
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