Nord Stream 2 pipeline: is it for energy or politics? | Inside Story

Nord Stream 2 pipeline: is it for energy or politics? | Inside Story

the german chancellor has warned russia not to use a new pipeline as a potential weapon the nordstream 2 is near completion it’ll bring more gas from russia to germany but will this give moscow too much power over europe and its future this is inside store [Music] hello and welcome to the program i’m hasam seeker the politics of energy are back under the spotlight in europe a new natural gas pipeline that would double the supply russia sends to germany is nearly complete but the north stream ii pipeline avoids ukraine which is where a large portion of russian natural gas passes through before making its way to europe this means the ukrainian government could lose a huge portion of the incumbent earns through transit fees the united states and some eu member states are also concerned they say further reliance on russia for europe’s energy needs could be risky but germany’s outgoing chancellor angela merkel says there will be rules in place to protect ukraine’s security we have made it clear that we will seek further sanctions within the european framework if the suspicion that the pipeline is being used as a weapon is confirmed and we have made it clear that we as well as graf waldersi who will be our special envoy are starting negotiations about the possibility of extending the contract from 2024 so ukraine can have security on this level as well i still believe that this is a weapon i still believe that it is impossible to ignore that this is a threat not only for ukraine but also for europe i don’t think it’s possible to ignore that it’s a weapon ukraine will not talk about nordstrom 2 from the economic point of view you can see who controls gas prices in europe now and how they’re rising we are willing to continue transiting gas through ukraine even after 2024 but we must understand in what time frame and in what quantities for this we must receive an answer from our european partners how long are they willing to continue buying from us this is an obvious thing we can’t sign a transit contract if we don’t have a contract for delivery to our customers in europe taking in mind the green agenda that is already being realized in europe we are asking ourselves will our gas even be bought well bring in our guests in a moment but first let’s take a closer look at this project the nord stream 2 pipeline runs under the baltic sea alongside an already existing pipeline completed in 2011. both pipelines allow russia to avoid ukraine when supplying gas to europe the new pipeline is expected to transport nearly 55 billion cubic meters of natural gas every year doubling russia’s current supply to germany the european union already imports about 40 percent of all its natural gas from russia that’s why there are growing fears that the new pipeline could increase the eu’s dependence on russia [Music] so let’s bring in our guests now in moscow we have pavel felgenhauer he is a russian foreign policy analyst and columnist at novia gazietta in sydney british columbia we have michael berserke author and global affairs analyst he’s also the former spokesman for the organization for security and cooperation in europe and in berlin tourniquet godaddy senior fellow at the international institute for strategic studies good to have you all uh with us uh gentlemen um dornicay if i could start with you um ukraine fears for its security on the basis that this gas pipeline will tighten moscow’s grip over uh over the region’s energy supply and strength in its its influence uh are those fears well-founded um yes i think these spheres are well-founded because moscow has a long tradition of using uh energy and especially gas supplies as a political or geopolitical tool we have seen it in previous decades um uh concerning ukraine but not only ukraine uh most of uh central uh european or eastern european countries have faced uh russian policies uh regarding the energy supply so uh this is a matter of uh geopolitics most of european countries and including the european union which is also important brussels also considers that the new uh pipeline nordstrom 2 is a political tool in the hands of russia and basically only germany germany’s official position is that these political pressures can be avoided but most of the countries uh including those who are in the neighborhood i’m in poland bulk state scandinavian countries and the european union as i said and even france usually france is not very aggressively anti-russian but regarding this this project particular project there most of the countries are against it and consider that it will increase russia’s geopolitical role in the european continent and i’m not talking about the us maybe we’ll come later to when we’ll discuss the american position on this issue uh sure we will we will get to that at some point michael berserker is europe risking becoming too dependent on russian gas oh absolutely and you know the outlines of this so-called agreement is very vague what does actually constant to constitute an energy weapon and when are sanctions triggered so for example if russia does abruptly raise gas prices to europe or constrict supply does that constitute using the pipeline as an energy weapon i think um there’s ukraine has uh very is very very right right now to feel very kind of threatened and vulnerable because there’s no real consensus on how russia how these how these uh sanctions excuse me can be triggered and i think it’s really incumbent upon people like chancellor merkel before she leaves office to tighten this agreement up we’ve as the previous guest indicated russia has a long record in terms of uh you know aggression in terms of probing weaknesses in terms of finding out how it can leverage its geopolitical advantage is energy to to harm others and to you know gain its own objectives so it doesn’t look good on all sides i think um just quickly i think that ukraine feels very again very vulnerable and very alone right now because it feels it doesn’t have strong backing from europe any longer well let’s get uh pavel felgenhauer’s take on this a lot of fears being expressed here about uh the this perceived uh over dependence on on on russian energy and russia using that as a weapon what do you say to that well europe is indeed very much dependent and increasingly dependent on russia and natural gas right now we are kind of russia’s at present before even without the north stream to going operation or is flexing its muscles say russia right now is cut the supply of physical supply of gas to europe and to cover its contract obligations is extracting gas from underground reservoirs in europe and so that means that the formerly right informal terms russia is complying with its contracts long-term contracts gus promise uh but in real terms that means that uh so summer’s ending winter is coming and the european gas reservoirs that are used as a buffer during the cold winter are right now very much depleted and apparently even physically won’t be impossible won’t be possible to fill them up before winter comes and so as a result the spot price of gas in europe has skyrocketed almost to the levels of east asia and europe is not getting enough uh liquefied gas on tankers because most of it is going to the east asia where there’s the so-called east asian premium on price so russia is flexing its muscles and showing that it can regulate the price of uh gas the price of uh the supply of gas in europe uh though it has just over a third of the supply is russian still anyway so then with the new pipelines russia will have more flexibility in doing that uh tony where does um what’s at stake here for for the united states and their uh position on all of this um the united states were very uh critical about this project uh from the from the very beginning um even if the position of the previous american president donald trump was uh not always um consistent he he was criticizing the project but at the same time he tried it he tried to veto the the the congress resolution uh to augment pressure uh on the on the project the americans uh we’re against uh the north stream too uh also because at least for the president trump um it was illogical to uh uh for for germany and for europeans to claim at the same time that russia was threatening them uh militarily politically and at the same time providing money uh for gas from which as we know is the is um is a main uh resource provider for the russian uh russian budget and uh maybe in the case of specific case of the president trump it was also to to help uh american uh uh companies that are exporting liquefied gas to augments their uh their exportations to the uh to europe but the things have changed um uh we we saw the last summer the meetings uh between the the the president biden and uh the chancellor merkel and later meeting of uh biden joseph biden with the vladimir putin in geneva and the americans decided to waive the most of sanctions and the punitive measures that the united states have adopted against the companies who the construction of nordstrom 2 and the americans justify this change by the fact that united states wants wants better relations with uh with europeans and the major player in europe is germany uh and at the same time um they tried to manage and to explain this decision um uh saying that together germany and the united states will um will uh increase pressure will establish sanctions if russia uses uh north stream as a geopolitical tool as my colleague from canada said this is something very difficult to assess because of course russia is a champion of hybrid measures and who will determine when the political aspect intervenes in this in this issue uh who will unless russia invites directly with their tanks or military forces ukraine or eastern european countries that there could be al always be a debate about is it political is it geopolitical or not so this is something that’s doesn’t really give the credit to the both heads of governments and state uh when they claim that uh um russia will pay the price all right if they use it yeah politically yeah let’s get let’s get pavel’s reaction to to some of that uh and and what is at stake here essentially for russia beyond the the the economic benefits uh well it should be understood that north stream two is only one uh pipeline in a network of pipelines built by russia it’s there’s the north stream one the very first pipeline which is fully operational for a long time then there’s the pipeline built to turkey and from turkey into the balkans the south kind of route now it’s called the turkish route so this is an entire network russia invested a lot of money into it i mean not only the pipelines themselves underwater but also the infrastructure to bring the gas from siberia to the black sea to the baltic sea and then send it to europe through the north and through the south and this is a massive investment most likely it was hoped that there would be foreign finance is involved but because of sanctions they were not so russia paid a gas prompted out of his own pocket to build it and it will this investment at least on paper will never be returned because it’s going to be gas from pipes with gas from gas inside them so they’re kind of paying the transit fee to themselves and as a result they’re paying very low fees to say that this is much more great economy but the thing is that the with such fees they’ll never return the investment so this is of course a combination of political and commercial interests like it often happens in today’s russia russia has both it wants to be in some control of the european market or at least on pricing there and others and supplies though and but of course also gas problem is tied to the european market the gas problem does not really produce on its own much at all uh liquefied gas that means it can’t send it to other places it’s pipelines and they’re tied to europe so europe is tied to russia russia is tied to europe basically for moscow that’s also not that bad because there’s this old idea that russia should build bridges with europe uh try and push the americans out do something that trump wanted to do and establish kind of a germany primarily but with also other european countries as kind of very close partnership that’s not very working out but there’s the commercial part of it and there’s of course the problem of ukraine which right now finds itself in a position when moscow at will if it wishes to can continue to supply gas to europe uh fulfill its contract obligations uh but not sending much or at all through ukraine and that’s yes sure let’s let’s talk a little bit more about ukraine’s options here uh michael barcia if ukraine continues to feel that europe and the united states are not looking out for them on this issue does that risk um drawing them closer to china’s orbit as has been suggested by some yeah absolutely i think uh the feeling in ukraine is i’ve recently returned from there is that it’s been thrown under the bus divided administration which by the way has very few foreign policy wins has chosen to improve relations with germany it has chosen to do some kind of reset with relations with russia and in return as i said earlier ukraine feels uh very vulnerable it doesn’t have many options but yes one of them is actually um improving relations with china in fact president zelonski recently had his first uh conversation with xu jinping over the telephone and uh they there was a very good call from both sides and uh zolensky said that uh it pretty much to the fact that ukraine has no better friend than china right now at least an economic partner and i think this was done in part to kind of put pressure on um washington to uh look again at relations with ukraine and to help it more look the other thing i have to say azam is that with the debacle in kabul and with the united states now seen as not a credible partner to guarantee security whether you’re a taiwan or ukraine or whoever is that um you know a lot of these countries are re-evaluated those security guarantees and looking for other partnerships and you know uh ukraine might even be looking for example even more to the gulf countries uh to see what kind of new ties can be formed there if i could say one other thing here and this goes more to the kind of technicalities of the pipelines is that the other problem ukraine has and it’s not talked about very much at the moment is with this realignment of gas transit a gas pressure in ukraine has the potential to fall very very much so what that means practically during the winter time outlying oblasts or outlying villages may not get the required gas that it needs because it’s really upset it has the potential to upset the whole infrastructure there so a lot of different vulnerabilities that ukraine feels right now so we shouldn’t be surprised that it’s looking elsewhere for better uh partnerships um tourniquet what’s your view on that and this idea that america’s credibility has taken a real hit uh in recent days uh you know because you know michael mentioned afghanistan um and their position with with this now would that would that uh uh force the european partners to to kind of look elsewhere to shore up their own alliances uh yes unfortunately uh the u.s role and even credibility is suffering uh already for several years it has started uh earlier than just a few weeks or a few days ago we also remember uh the first attempt of resets between the american uh administration obama administration and uh uh and putin’s russia just after the war in georgia and there were numerous attempts of uh normalization of relations between the us and russia always coming from from the americans we also remember uh this disastrous experience in syria where the americans abandoned their own red lines and their allowed russia to intervene on the sides of of uh the president bashar al-assad and all the tragic consequences that that had happened there so many eastern europeans especially are very vulnerable because of their geographical proximity with russia are extremely worried and uh to come back to the options that ukraine has i would add also one another option that is now improving and getting closer uh relations with turkey which is uh and the cooperation uh between ukraine and turkey around the black sea uh including cooperation in military field and military industry uh between these two countries don’t forget that uh turkey was quite critical about the crimea’s annexation by by russia because crimea primarily uh the the local population the autonomous population is turkic speaking um population so uh there these these countries are looking for options somehow ukraine tried to negotiate uh better options about nato memberships in terms of you know with germany again germany and france where the main countries are blocking ukraine and jewish accession to nato from 2008 so ukrainians tried to to to negotiate this north stream to uh uh issue with uh the rapprochement possible with nato but i don’t see any uh serious uh changes in this uh in this issue so okay yeah of course these countries increasingly they understand that they have to rely on their own resources and to be more multi-vector and to see partners everywhere and also to improve relations between them between um this eastern european countries with poland with baltic states et cetera et cetera parallel felgenha i want to ask you about another announcement that was made in these meetings and that was uh angela merkel promising to provide more than a billion dollars to help expand uh ukraine’s renewable energy sector how much might that soften the blow for ukraine if it was to lose uh those transit fees uh from russia in three years time well to some extent most likely yes but there’s also other problems not just simply money uh there’s not just the fees there’s the gas that goes through ukraine uh basically also ukraine buys part of that gas bank um legally speaking buys it from i don’t know poland or slovakia uh but physically the grass is just simply taken from the pipe that’s as it goes through ukraine and if the pipe is not functioning the gas is not coming how where will ukraine get the gas that is right now buying in the west if there’s it’s there’s technicalities there that could have a very disastrous effect it was said already that the pressure in the gas entire system of ukraine may begin to fall and that would be catastrophic getting gas from the west they have to reverse it it’s i mean there’s there’s so many problems there um just a billion dollars to improve uh green energy won’t it’s good but it won’t solve those problems i’m afraid okay i just want to put the what’s probably going to be the final question in the minute or so that we’ve got left to to michael uh how do you see this uh playing out if um uh i mean merkel has said that they could they could apply more sanctions on russia if it doesn’t play ball but uh russia has already been sanctioned almost to the limit already so i mean how much how much more sort of firepower do they have really exactly how much more pain can you inflict on russia which is already sanctioned to the hilt as you already pointed out i think the only thing the west really has the only leverage is the nuclear option which i call it and that is to at least temporarily remove russia from the international financial system the swift payment system that would really get them where it hurts i can tell you that again just coming from the region uh vladimir putin is making very threatening signals he did a long tone-deaf speech recently claiming that ukrainians and russians are all the same people to me this is code for we have more ambitions for ukraine get ready for it get more for get ready for more aggression and quickly don’t forget that they did leave a lot of military hardware a lot of manpower close by when they did the recent military exercises so again plenty of plenty and plenty of reason for ukraine to feel very vulnerable right now all right we’ve got to leave it there thank you to all three of you pavel felgenhauer michael berserker and tony thanks very much for being on inside story and thank you as always for watching remember you can see this program again anytime by visiting our website aljazeera.com and for further discussion go to our facebook page that’s facebook.com forward slash aj inside story you can also join the conversation on twitter our handle there is at aj inside story from me has um sneaker and the entire team here bye for now you
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Nord Stream 2 pipeline: is it for energy or politics? | Inside Story

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