Some thoughts on Nord Stream

Nord Stream pipeline

One half of the Nord Stream gas pipeline connecting gas supplies in Russia to gas demands in Western Europe is now operational. The pipeline runs on the floor of the Baltic Sea from Russia to Germany via economic zones controlled by Finland, Sweden and Denmark.

This seems all good. The EU depends on Russia for a significant amount of its energy needs, so it’s economically understandable that the EU would push for a direct gas pipeline from Russia – no one wants to sit around in the cold and be subject to the annual games that Russia plays with Ukraine over gas costs and supplies and the like. Might as well go directly to the source and cut out the middleman.

Yet it’s not as simple as that. There are many issues here, and in my opinion most of them can be reduced to the democracy deficit currently plaguing the EU – perhaps most saliently witnessed in the sovereign debt crisis and the imposition of austerity.*

In theory, the EU represents an institutional structure through which larger states acquire more bargaining legitimacy while smaller states increase their bargaining leverage. In order to do so, member states give up certain rights of sovereignty otherwise assumed as self-evident in the old every-nation-state-for-itself model of international affairs.

In this type of model, each state sends a bargaining representative to Brussels to work through various negotiations. Some representatives bargain on behalf of the country that sends them while others on behalf of the EU. The ideal system would moderate and harmonize these two apparently divergent tendencies.

Unfortunately, the way the system actually functions, many other factors collide in Brussels realigning the two basic tendencies outlined above. A few of these realigning forces include political parties, NGOs, private corporations and multinational companies.

Major_russian_gas_pipelines_to_europe

Now onto the issues with the Nord Stream pipeline. There are major potential political, economic and environmental effects associated with this pipeline.** And certain members of the EU that might be affected, namely Poland, the Baltic countries, the Czech Republic and Slovakia, had essentially zero say in the Nord Stream process.

This could either be because certain European technocrats were thinking about future payoffs they could receive if they supported Nord Stream.*** Or they were thinking about a certain tendentious construction of the EU that this plan would benefit; and as such they disregarded the legitimate grievances of other member states. Western Europe needs energy (at least until Desertec can be developed), so who cares if a few Eastern European states get pushed aside in the process.

The other side of this is of course the Russian motivation for this pipeline. And by Russian, I mean Gazprom. No doubt Gazprom is tired of dealing with Ukraine; so one of the alternative proposals, which involved routing the pipeline through the Baltics, would obviously not have sat too well with the Russians. If part of the reason for Russia wanting a direct line to Germany is because it is tired of playing trade war-games with former colonial possessions, then well, it’s not hard to see where this is going. Furthermore, this Gazprom route, along with the soon to be operational southern route through the Mediterranean, will immensely increase Russia’s political bargaining power w/r/t Europe.

Regardless, policy decisions such as this make the whole Eurosceptic platform almost, but still not quite, understandable.

* I’m sort of assuming here that the deal was between the EU and Russia, which to be sure is a pretty gross and problematic simplification of things. The deal was originally signed between Germany and Russia. As they needed the approval of the Scandinavian countries for use of their Baltic highways, these countries were brought in on the deal. A couple other energy companies from Holland and France eventually got involved too. My point is that insofar as the EU supported the deal and did nothing to question, revise or critique the plans put forth, it too should be seen as a participant in the deal.

** Some of the political issues include effectively shutting out the aforementioned Eastern European countries throughout the process. Some of the economic issues include the loss of funds to Eastern European countries generated by their status as gas transit countries. And the environmental issues have to do with, inter alia, the Baltic Sea not having the kind of circulation that, for example, the North Sea has.

*** It’s a little shady, for example, that Gerhard Schroeder, the former German chancellor instrumental in finalizing the deal, took a job with Gazprom (the Russian company with the majority stake in Nord Stream) right after leaving office. This supports the Yglesiasian point regarding the rise of the global ruling elite. I would only argue that the global ruling elite has always been globally ruling. And that the history of the western political system largely has been a prolonged attempt to institutionalize more efficiently and legitimately the elites’ hold on power.

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