The Yamal pipeline, born at the height of the Cold War, was fiercely fought by President Ronald Reagan. Nord Stream 2 is heavily contested by several Eastern and Central European countries, Ukraine, the United States and-in a different tone and to a lesser extent due to institutional constraints-by the European Commission’s top level officials. Though Yamal and Nord Stream 2 affairs present several striking similarities, they might differ in their development.
The Yamal pipeline and the tit-for-tat around a project initiated in tense geopolitical context
At one of the Cold War’s most tensioned moments, marked by NATO’s deployment of ballistic and ground-launched cruise missiles in Italy, United Kingdom and West Germany and by the Soviet Union’s invasion in Afghanistan, a pipeline affair heated the ideological confrontation between the United States and the USSR and mounted the frictions between Washington and its Western European allies: the Siberian pipeline, commonly referred by the literature analysing the issue as “Yamal pipeline”; Gazprom currently refers to this pipeline as “Brotherhood” pipeline (Urengoy-Pomary-Uzhgorod).
The Yamal pipeline project was presented soon after the Soviet invasion in Afghanistan and it was further negotiated between the Soviet side (Soyuzgazexport) and Western Europeans (Ruhrgas and Gaz de France) during the year 1980 and the first half of 1981. On July 24, 1981, West Germany- whose Chancellor Helmut Schmidt was willing to preserve the achievements of Willy Brandt’s Ostpolitik– and USSR concluded a framework agreement on the deal.
From the very beginning, the President Ronald Reagan, who arrived in the White House with the goal of containing the spread of Soviet Union’s power, had seen the Yamal project through geopolitical lens and considered it one of Soviet Union’s significant tool aimed at spreading Moscow’s influence over the Europeans, and in particularly over the Western Alliance. The fear that the Soviets would intensify the military spending with the $ 8 billion currency earned by the gas exports to Europe and the increasing Soviet Union’s role in providing vital energy resources to the Western Europe were also Reagan’s concerns over the affair. For instance, over a decade, from 1970 to 1980, the Soviet gas exports to Western Europe had heavily raised, from 1 billion cubic meters (bcm) per year (or roughly 3.6 bcm, according to some sources) to 26.5 bcm annually.
At the Ottawa Summit of July 1981, Reagan pursued a strategy formerly discussed within the National Security Council that envisaged a coordinated diplomatic offensive aimed at convincing America’s Western allies to abandon their participation in the Yamal project. In this regard, he offered to supply the West Germany with energy in the form of coal, but his proposal was turned down by the Western Europeans, as it presented a few critical challenges: the coal prices were higher than those of the Soviet gas; the implementation would have required the construction of coal gasification plants; the substitution of gas by coal, mainly in the industrial sector, posed environmental and technical problems. Consequently, the American administration came out with other ideas-the substitution of the Soviet energy supplies with gas from Norway’s Troll field, respectively Netherlands’ Groningen; those proposals were also rejected by the Western Europeans, as they proved to be unfeasible in terms of immediate implementation.
In November 1981, after Brezhnev’s visit to Chancellor Helmut Schmidt, Ruhrgas A.G. and Soyusgazexport signed the main contract of Yamal deal, consisting of annual imports of 10.5 of bcm of Soviet gas over a 25-year period. Meanwhile, the geopolitical context marked a new critical tension, due to another important event occurred in the Eastern bloc: the state of emergency and the imposition of the martial law in Poland, on December 13, 1981. In response to the martial law, Reagan, who feared the Soviet direct intervention in Poland, announced, on December 30, 1981, the ban of all the gas and oil equipment and technology exports produced in the United States to the URSS. In this regard, it is worth mentioning that the ban initiated by Reagan did not succeed to prevent the completion of the pipeline’s first strand, as the American company General Electric- which had previously been ordered a contract by the Soviets-had already shipped equipment for gas turbine compressors.
The situation in Poland raised also the issue of geopolitical opportunity regarding the continuation of the negotiations on Yamal deal by the Western Europeans. Though the French President and the Socialist government expressed their concerns over the events occurred in Poland, the deal went ahead and, on January 23, 1982, Gaz de France concluded an agreement for importations of 8 bcm of gas per year. By mid-1982, Austria’s OMV and Swissgas signed for annual imports of 1.5, respectively 0.36 bcm of gas. Further major importation contract of the Soviet gas was signed in 1984 by Italy’s ENI, which agreed for 6 bcm of gas imports per year.
Though, as the American President did not succeed, during the negotiations pursued at Versailles G7, in convincing the Western allies to agree on trade and credit restrictions aimed to stop Yamal, a tougher stance was taken up. Hence, on June 22, 1982, Ronald Reagan announced the extension of the sanctions on all the foreign firms exporting equipment involving American technologies.
The essence of the deal: Western pipes for Soviet gas, financed by Western banks
The total costs of the project’s construction were estimated at $ 15 billion, a very high amount at that time. Basically, the agreement consisted in a “gas for pipes” deal: the Western companies signed long-term contracts with the Soviet government for the delivery of gas in exchange of wide-diameter steel pipes, and other gas-transportation related equipment. Several West German, French, Italian and British companies won multi-million contracts for pipes and various equipment orders. For instance, the West Germany’s Mannesmann and AEG-Kanis’ took orders of approximately $ 700 million, respectively $ 320 million; the French Creusot-Loire won an order for nearly $ 225 million; the Italian Nuovo Pignone and Italsider were contracts of $ 600 million, respectively $ 230 million. Nevertheless, the “gas for pipes” agreement was not a novelty in the trade relations between the Western Europeans and the Soviets. This kind of agreements have been initiated at the beginning of the 1970s, with deals concluded by the Soviet Union with Italy and Austria and they were part of Moscow’s strategic approach that encompassed several aims, of which most important were: achievement of détente with the West; access to Western technology and equipment that the Soviet Union was heavily lacking; conclusion of long-term contracts, which were a much-needed impetus to the development of the Soviet gas industry.
As Moscow necessitated money to finance the purchasing of Western technology and equipment for the Yamal pipeline, various financial arrangements were negotiated within the frameworks of the deals concluded by the Soviets with their Western counterparts. Several Western banks consortiums agreed to lend the money at preferential interest rates, less than 8 %, in the context in which, at that time, the market rates were well above 11-12%. In order to offset the interest rates difference, the Deutsche Bank-led consortium raised the prices of the equipment purchased by the Soviets for the contracts involving the Western German companies whereas the Italian government opted out to subsidize the difference between the contract’s rates and the higher market rates.
Reagan: “Those chicken littles in Europe”; Schulz: “Thatcher desperately needs some face-saving solution”
“Those chicken littles in Europe, will they still be “chicken littles” if we lead and ask them to follow our lead? “, asked Ronald Reagan during the National Security Council’s meeting of December 22, 1981, which discussed the situation in Poland and set up the main lines of the United States response towards the Soviet Union.
The sanctions set up by Reagan draw a wedge between the United States and its Western European allies, as the latter dismiss both Reagan arguments and embargo proposals. In fact, the Western European countries’ perception upon the military threat posed by the Soviet Union differed from that of the United States, and they considered that Moscow’s dependence on Western technology would considerably reduce Moscow’ options to use the energy as leverage in the West-East relations. West Germany’s Chancellor, Helmut Schmidt, declared that “the pipeline will be built”, whereas the French government announced that it would ignore Washington’s second round of sanctions and ordered to Alstom company to proceed with the manufacture of the turbine rotors developed under General Electric’s licence. Finally, neither Italy, nor even UK did rally to Reagan administration’s stance on sanctions. London’s argument was that the British economy would be punished, whereas the sanctions would not inflict serious effects to the Soviet economy. As the United States and its Western allies were in a complete deadlock situation, the Prime Minister Margret Thatcher said to the US State Secretary George Schulz, in a meeting held in London on September 9, 1982, that she “desperately needs some face-saving solution” to the issue of sanctions.
In the end, the “face-saving solution” came out through the lift of the sanctions, as on November 13-14 1982, Reagan lifted the embargo. A year later, on January 1, 1984, natural gas started to flow through the pipeline route from the Soviet Union and Yamal pipeline affair ended.
CIA’s evaluation: increased dependence on Soviet gas for Western Europe, political advantages for Moscow
The analysis of CIA’s declassified documents on Yamal deal indicates that the Agency paid a special attention to the project. Given a few important convergent points between the stances expressed by the President Reagan on the issue and CIA’s evaluations, one might assume that the latter widely contributed in shaping up of the American administration’s position.
In the Intelligence Assessment “USSR –Western Europe: Implications of the Siberia –to-Europe-Gas Pipeline” dated March 1981, the CIA highlights the main potential political leverages acquired by the Soviets through the pipeline, and the main political risks that the Western Europe might face. Hence, the CIA assessed, the gas deal would give the Soviets two main political advantages: closer political and economic relations with Western Europe, which might trigger increased legitimacy of Soviet foreign policy in the eyes of the Western European counterparts and undermine the US- and NATO-led anti-Soviet initiatives; and a new tool for Moscow’s diplomatic actions regarding the Western economic sanctions and NATO’s military modernization. The Western Europe risked a greater dependency on the Soviet gas, but the possibility of gas supplies interruption was not considered as a workable one by the Agency. Moscow would be unable to cutoff the supplies to just one target country and would need Bonn’s cooperation for such an action, as all the gas shipments would pass through the Western Germany, considered CIA.
“Moreover, the project furthers Soviet goals of drawing Western Europe into a closer political-economic relationship. The pipeline would be a major new element in Soviet-West European relations. It would provide the Soviets one additional pressure point they could use as part of a broader diplomatic offensive to persuade the West Europeans to accept their viewpoint on East-West issues (…) Barring a major increase in East-West tensions, West Europeans governments see increased use of Soviet gas as an acceptable political risk”. (CIA, “USSR –Western Europe: Implications of the Siberia –to-Europe-Gas Pipeline”, March 1981, p. iii)
A year later, in the Intelligence Assessment “Outlook for the Siberia-to-Western Europe Natural Gas Pipeline”, the CIA assessed that, by developing the Yamal project, the USSR aimed to attain three main goals: i) Significant earnings, as the oil revenues were expected to fall until the mid ‘80s. The Agency estimated that, after the repayment of all the credits, Moscow’s overall gas earnings could be roughly $ 10 billion which would enable the Soviet economy to purchase Western goods and technology and further to improve its industrial productivity and agricultural shortages. More, the earnings of the gas exports could help the USSR to uphold its economic support to Eastern Europe; ii) Aid to gas production : the pipeline deal could establish reliable non-US sources of equipment, a critical element for developing the gas production from the Siberian gas fields and could facilitate further Western participation in the Soviet turbines’ manufacture, very vulnerable to US sanctions ; iii) Political objectives : the pipeline could become a way of increasing the rift between the United States and the Western Europe. According to the CIA, the latter’s increasing dependency on the Soviet gas could become a factor with significant weigh on decision-making regarding the East-West issues.
“Moscow wants the gas export project for three basic reasons. Most important, the pipeline will earn badly needed hard currency and aid development of the Soviet gas industry. These objectives are increasingly important to the troubled Soviet and East European economies. At the same time, the USSR sees the project as a major step toward expanding its commercial and political ties at US expense”. (CIA, “Outlook for the Siberia-to-Western Europe Natural Gas Pipeline”, August 1982, p.3)
Regarding the Western Europeans’ interests in the deal, the Agency considered that those were: i) Diversification of energy sources : though the Soviet gas imports accounted to cover roughly 3% of their overall energy needs, the Western Europeans, estimated the CIA, seen the pipeline deal as a mean of reducing their dependency on OPEC oil and OPEC suppliers. The Western Europeans considered the USSR a more reliable supplier than some OPEC countries; consequently, they estimated that the Yamal pipeline would contribute to their energy security; ii) Employment : the export contracts related to the pipeline could provide several tens of thousands of jobs for France, Italy UK and West Germany, in the industries and regions heavily affected by the unemployment ; iii) Prices : compared with the oil of OPEC suppliers and with the gas from other suppliers as Norway and Algeria, the Soviet gas was relatively cheap ; iiii) Detente : the Western Europeans, the Agency believed, seen the trade with the Soviets as an element of stabilization in the West-East relations and consequently as a factor to enhance their national security.
“The Western Europeans have several reasons for wanting the gas export pipeline, including diversification of energy sources, pipeline-related exports contracts, the relatively low price of Soviet gas and the hope that economic ties will contribute to detente (…) They also believe that they could cope reasonably well with even a total cutoff of Soviet gas deliveries, through a combination of conservation, fuel-switching, temporary increases in domestic production, and drawdown of gas stocks”. (Ibid., p. 4)
The narratives in the United States: threat of energy dependency, blow for US and NATO, business versus patriotism, operational necessity to achieve the “detente”
In an article dated January 11, 1981, Chicago Tribune amply featured the opinions of Miles Costick, whom, according to the newspaper, was associated with two of Reagan’s top aides, who led the CIA’s, respectively the Pentagon’s transition teams. One of Costick’s main points was that West Germany, France and Italy would become dependent upon “the Siberian fields for significant amounts of their energy needs”, whereas Belgium and Netherlands would become dependent on Soviets through business projects; for instance, the Belgian state-owned Usine a Tube de la Meuse largely benefitted from the Soviets’ order of 500,000 of pipeline tubes.
“If Western Europe closes a $15 billion pipeline deal with the Soviet Union to import Siberian natural gas, U.S. foreign policy and perhaps the NATO alliance, will be dealt a sharp blow. But five Western oil companies, three of them American, will profit”, wrote the press agency United Press International (UPI) on October 2, 1981. The three American companies were Exxon, Mobil and Texaco, whose total share of Ruhrgas was 25.9%. This fact “stunned some of the 45 senators and congressmen”. They urged Reagan to block the participation of the American companies in Yamal project, under the considerations that the gas deal could increase Europe’s dependency on the Soviet energy and undermine “US long-term security interests”. “Big businessmen in America are sometimes more loyal to profits than to patriotism”, said the Republican Congressman John Le Boutillier.
The issue of Western companies’ implication in the deal was also highlighted by Edwin Rothschild, the then Director of the Energy Action Educational Foundation. In a letter to the editor published by The New York Times on December 3, 1981, he warned upon “the involvement of major international oil companies in the European natural gas market”. The international companies British Petroleum, Exxon, Shell, Mobil and Texaco, owned together 66% of German Ruhrgas. More, through Ruhrgas and the Dutch Gasunie -of which Shell and Exxon owned 50%-, those companies had formed a European gas buyers’ cartel, which allowed them to determine the price of the gas purchased not only from the Soviets and Algerians but from themselves as well. Therefore, Rothschild concluded, the major international oil companies had an “awesome” capability to set the “world price” for natural gas.
The issue of the American oil companies’ involvement into the gas deal was reported by The Washington Post too. In an article published on February 6, 1982, the newspaper presented the opinion of Wolfgang Oehme, chairman of Exxon’s Hamburg-based German subsidiary, who argued that “Reagan has absolutely no reason to forbid this business. We are working within the framework of a German government assessment that this project is good for Germany”. According to the newspaper, Mobil appeared the only oil major company operating in West Germany which opposed the deal, but on the fears that its completion would undermine Mobil’s efforts to develop gas reserves in the Nord Sea and West Africa.
But one of the most interesting political stances was that of George W. Ball, former Undersecretary of State in the Kennedy and Johnson Administrations, published by The New York Times on September 12, 1982. “The Reagan Administration’s frenetic efforts to obstruct the building of the Soviet-European natural-gas pipeline are marked by hypocrisy, self-deception and an astonishing ignorance of past experience”, he said. Ball took an uncommonly tough position against the Reagan Administration, arguing that its decisions are shaped by the “ideological bias one might call the Manichaean Heresy” which presented the Soviet Communism as “the Antichrist”. In his long article, he repeatedly and harshly criticized Ronald Reagan for his decision to use economic restrictions against the Soviets and from moving from detente to confrontation, claiming that, due to geographical and historical reasons, the Europeans evaluate the Soviet Union in a different way than the United States. Finally, Ball chose to illustrate his point with sentimentally-grounded arguments: “The West Germans, for example, have a special view of detente; they see it not merely as a softening of rhetoric but as an operational necessity enabling them to develop arrangements with Moscow that have relieved the pressure on West Berlin, alleviated the hardship of divided families in a divided country, and facilitated the repatriation of ethnic Germans left behind when parts of Silesia were ceded to Poland by the Potsdam Agreement”.
Yamal and Nord Stream 2: is history repeating?
“Here’s my strategy on the Cold War: We win, they lose”, Ronald Reagan said to his policy advisor Richard Allen in 1977, when discussing approach on relations with the Soviet Union. Despite all the endeavours deployed to stop the Yamal deal, Reagan lost the battle over it, but in the end the United States won the Cold War. Nowadays, another pipeline, the Nord Stream 2, has been stirring powerful surge of controversies, but unless the Yamal, the row is lesser Transatlantic one, but a predominantly an intra-European dispute. Furthermore, there are a lot of similarities between the two affairs, and they touch not only upon those above mentioned disagreements; they relate to several other aspects which will be analysed below.
Firstly, as in the case of Yamal, the Nord Stream 2 project pipeline has been born in a geopolitical context which, though not as antagonized as that of the Cold War’s last decade, still remains a tense one. Russia’s annexation of Crimea, carried out in March 2014, was an unparalleled move of Russia’s post-Soviet foreign policy. Not only that it triggered, together with the Moscow-backed conflict in the Eastern Ukraine, the worst West-East crisis since the Cold War, but it unprecedentedly deteriorated the EU-and United States-Russia relations.
Secondly, other similarity between the affairs of Yamal and Nord Stream 2 is related to the introduction of the economic sanctions. However, unlike the Reagan’s sanctions, that targeted only the Yamal affair and were supported only by Washington, the current sanctions were conjointly adopted by the United States and the EU against Russia in response to Crimea’s annexation. The current sanctions are more complex, as they touch upon many sectors, and not only on the ban of the gas and oil equipment and technology, as in the case of Yamal affair. Actually, there are four stages of sanctions adopted by Washington and Brussels since March 2014 and they target: the funds and economic resources held by Crimean and Russian politicians and Russian military chiefs, individuals and entities operating in the arms sector, and officials of the Russian government (stage one); Russian financial, energy and defence sectors and restrictions on Crimea and Sevastopol (stage two and three); the Western business co-operation with Crimea (stage four). The major Russian banks-Bank of Moscow, Sberbank, Russian Agricultural Bank, VTB Bank, Vnesheconombank, Gazprombank- and main Russia’s oil companies- Rosneft, Novatek, Gazprom Neft and Transneft- are subject of sanctions. In March 2015, the European Council had linked the duration of sanctions to the complete implementation of the Minsk agreements, which was foreseen to take place by 31 December 2015. Following the prospects of the Minsk agreements’ application, the European leaders agreed on December 21, 215, to prolong the economic sanctions against Russia until July 31, 2016, when the European Council should decide on the sanctions. In this context, it is noteworthy to mention that several Member States -France, Italy, Austria, and Hungary-have explicitly pronounced in favor or sanctions’ lifting. Nonetheless, the vote on the removal or renewal of the sanctions is unanimous and the issue of Nord Stream 2, though not directly related to sanctions, would only complicate the decision within the European Council.
Thirdly, the next common feature between the two issues-Yamal and Nord Stream 2-is set by the implication of the Western companies. As it was indicated above, in the case of Yamal, the Western companies were not directly involved in the construction of the pipeline, but they supplied the steel pipes and other gas-transportation related equipment. Unlike Yamal, the Western companies have immediate interests in Nord Stream 2, which is a joint venture between Gazprom (50% share) and five of the largest European energy companies: E.ON, OMV, Shell, BASF/Wintershall and Engie (each 10% share).
The close relations between Gazprom and its Western partners go beyond the Nord Stream 2 project, as they touch upon a series of important assets swap deals, that are either already concluded or still under discussion. Hence, Gazprom and E.ON have a swap deal, concluded in 2009, under which the latter acquired a 25% stake minus three ordinary registered share in Severneftegazprom; in return, Gazprom acquired E.ON’s 49 % stake in the Russian company Gerosgaz. Also, Gazprom and OMV have been working since September 2015 on a swap agreement under which the Austrian company would acquire 24.98 % stake in the project developing Achimov deposits at the Urengoyskoye field, and Gazprom would take OMV assets; the latter are yet under analysis. Shell and Gazprom are already partners in the Sakhalin-2 oil and gas project, which currently supplies nearly 4% of the world’s current LNG market; the Hague-based company owns 27.5% in Sakhalin-2. Further, the two companies have been discussing the expanding of their alliance: Shell will swap a stake in one of its international assets that is still to be decided, in exchange of a part in Gazprom’s Sakhalin-3 project. Other assets swap deal was concluded between Gazprom and BASF/Wintershall in October 2015 and it gave to Wintershall 25.01% stake of Achimov deposits in Urengoyskoye field; interestingly, the stakes offered by Gazprom to Wintershall and OMV in Achimov project are, for both companies, in the Blocks 4A and 5A. In return, Wintershall transferred its shares in WINGAS, WIEH and WIEE to Gazprom, which increased its share in those companies to 100%; also, Gazprom received 50% of Wintershall Noordzee B.V., involved in exploration and production of oil and gas in the North Sea. More, through the assets swap concluded with BASF/Witershall, Gazprom took full control of Astora, the company which holds approx. 25 % of the total natural gas storage capacities in Germany and operates Rehden, Jemgun and Haidach storage facilities.
Fourthly, as in the case of Yamal, the Nord Stream 2 pipeline project faces a strong opposition that is backed up by powerful narratives. Unlike Yamal, contested only by the United States, Nord Stream 2 is opposed by several EU Member States, Ukraine, the United States and the European Commission.
The EU’s members opposing which mostly oppose to Nord Stream 2 are Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Romania, whose leaders stated, in a letter to the European Commission’s President, that the project would generate “potentially destabilising geopolitical consequences” and would create risks for the energy security of Central and Eastern Europe. The document also says that Nord Stream 2 would have a strong influence on “gas market development and gas transit patterns in the region, most notably the transit route via Ukraine”. Actually, Ukraine is another country which opposes to Nord Stream 2. Though not an EU member, but a member of Energy Community, the country made, through Naftogaz gas company, an official complaint against the project. The complaint had been initially submitted to the Energy Community on December 21, 2015 under Article 90 of the Energy Community Treaty. The Energy Community’s Secretariat officially transferred it to the European Commission. Naftogaz argues that the Nord Stream 2 project would not respect the unbundling requirements which apply both in the Energy Community and the EU. Therefore, Naftogaz claims, granting an exemption to the Nord Stream 2 would merely jeopardize the security of supply and detriment the functioning of Energy Community’s gas market by hindering its competition and annihilating not only the creation of the interconnected and liquid gas market in the Energy Community but also the integration of the Eastern, Central and Southern European gas markets with the Energy Community’s gas market. Also the United States criticized, in several occasions, Nord Stream 2, but its disagreement to the project was formally voiced through the declarations of the current administration’s officials, and not through the stances of top level politicians. Washington’ criticism were grounded on the following arguments: the project does not meet the European Union’s goal of energy diversification, it hampers the diversification of energy suppliers and routes and consequently it does affect Europe’s energy security and it would deprive Ukraine of important transit fees.
As it was indicated above, unlike Yamal, Nord Stream 2 has been triggering an intra-European wedge, and not merely a Transatlantic row. In fact, it opposes the Eastern and Central countries principally to Germany and Austria, which have been the project’s strongest endorsers so far. Angela Merkel opted out to limit her stance at declaring that the project is a commercial, and not a political one and this line of argument was further taken up in the most recent position of the German government upon Nord Stream 2. The German Minister of Economic Affairs, Sigmar Gabriel, preferred a more outspoken stance and simply told to Vladimir Putin, in a meeting held on October 28, 2015, that “Nord Stream 2 (…) is in our interest”. Austria, which was a fierce supporter of the now cancelled South Stream, is another Member State which chose to endorse Nord Stream 2: the President Heinz Fischer reasserted, after his official visit to Moscow on April 6, 2016, his country’s “commitment” to the Nord Stream 2 pipeline project.
As indicated above, Yamal brought forth an array of narratives which shaped the public debate over it through geopolitical (“a blow for the United States and NATO”; “US long-term security interests” would be undermined; “big business” lacks patriotism; “operational necessity to develop arrangements with Moscow” and achieve détente); energy security (“West Germany, France and Italy would become dependent upon the Siberian fields” for their energy needs) and economic lens (Belgium and Netherlands would become dependent on Soviets through business projects; involvement of major Western oil companies in the project).
Similarly, Nord Stream 2 generated a wide range of narratives which are predominantly shaped up with argumentative patterns corresponding to those of Yamal-associated narratives. Hence, as shown above, the Eastern and Central European countries’, Ukraine’s and United States’ opposition to Nord Stream 2 revolve around geopolitical (“potentially destabilising geopolitical consequences”; a tool for Russia to reach its political goals ), energy security (risks for the energy security of Central and Eastern Europe; threat of security of supply and functioning of Energy Community’s gas market; obstacle to Energy Union’s goals of diversification of supplies and routes) and economic arguments (great influence over the “gas market development and gas transit patterns” of Eastern and Central region; it would heavily affect the gas transit through Ukraine and would deprive the country of important transit fees; it would hamper the competition in the Energy Community’s gas market and would prevent the integration of the Eastern, Central and Southern European gas markets with the Energy Community’s gas market). In return, the endorsers of Nord Stream 2 – namely the Russian top officials, the representatives of the project’s business consortium and Germany- asserted arguments focused on energy security (“it will help ensure stable gas supplies to the European market and enhance energy security on our common continent”; it will go ahead only if the gas transit to Ukraine would continue ) and economic arguments ( “commercial project” ; “a project launched at the initiative of European energy companies”).
To all those Nord Stream 2-related narratives, two more have been recently added: the environmental narrative, recently put forward by the European Commission (“the operational safety aspects of the Nord Stream pipeline (…) could have significant effects on human health”; the issues of environmental liability should be clarified by the Member States); and the much-debated legal one, to which the project’s opponents attach great importance, as they see the EU law’s application to Nord Stream 2 a sort of game-changer that might stop the project. An opinion, though not officially issued, of the EC’s Directorate General for Energy, and recently endorsed by the EC’s Vice-President Maros Sefcovic , argues that the 3rd Energy Package’s provisions apply to the pipeline’s onshore part in Germany, but also to its offshore part under the jurisdiction of respective Member States( territorial waters and/or exclusive economic zone of Denmark, Finland, Germany and Sweden). Conversely, Russia considers that Nord Stream 2 does not fall under the 3rd Energy Package application.
All in all, Yamal and Nord Stream 2 are two affairs that present several important similarities: they originate in a tense geopolitical context; in both cases Russia is subject of economic sanctions; the Western energy companies were implicated in Yamal deal and they are now shareholders of the Nord Stream 2 pipeline project; they are associated with powerful and multi-strand narratives. Nonetheless, those two affairs might differ if not in fate, at least in the development course: unlike Yamal’s, Nord Stream 2 evolution is constraint by two distinctive elements: the regulatory powers of the European Commission and the changes in the EU’s energy market occurred over the past decade. How those two factors-Commission’s regulatory powers and internal energy market rules-would further shape the Nord Stream 2 development is yet to be seen. Though, when to offer answer to the question “is history repeating”? an appropriate, “Reagan style” response might be: now, not quite so much.
