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The Nord Stream pipelines: Not just business, and not just about gas

Europe (Central and Eastern)
 
European Union
 
Governance
 
International Relations
 
Political Economy
 
Business
 
Presenter
Anke Schmidt-Felzmann
Swedish Institute of International Affairs
Authors
Anke Schmidt-Felzmann
Swedish Institute of International Affairs

Abstract
This paper engages with the material and the unsaid in a controversial Eurasian energy project. It takes a closer look at the Nord Stream pipelines 1&2 (Nord Stream I) and the planned pipelines 3&4 (Nord Stream II). The Nord Stream pipelines - gas infrastructure connecting Russia with Germany across the Baltic Sea – have been subject to heated debates in the European Union and caused controversy in and between the countries affected by the infrastructure. Nevertheless, the narrow focus on certain aspects in the public debate, and the striking neglect of other aspects raises the question of why, how and to what extent key political and commercial stakeholders disengage from the assessment of the full range of material, political, commercial, legal and security implications that projects of this magnitude imply. The paper takes issue with the claim, frequently heard in the EU, that these projects with the Russian state-controlled energy giant Gazprom are “just business deals” – as supporters have consistently argued. At the same time, it also takes issue with the alternative argument used by opponents, namely that the project is undesirable because it will increase Germany’s and the EU’s dependence on Russian gas while harming the economic interests of the traditional transit countries it circumvents, and that the EU’s legal framework must determine the fate of the project. Both sides reason along the lines of “private business interests” versus “state-controlled geo-economic interests”. While opponents refer to the competences of the EU, advocates refer to the rules of supply and demand on the free market. A closer scrutiny of the material aspects of the project development and construction phases as well as the end results reveals additional aspects of importance. Examining the details of the project and the actors “on the ground” that are involved in the construction and implementation phases, reveals that the material, the commercial and the political are not being considered in equal measure in the decision-making phase. Instead, the analysis highlights that the debates have zoomed in on the commercial and broader geo-economic and legal questions, while neglecting the intrinsic link between the material,
political and security interests. The analysis reveals also that the Nord Stream project involves many more stakeholders in the EU, and includes a range of deals benefitting the Russian state that have broader implications for the EU and different member states’ security. It concludes that the compartmentalized nature of decision-making on the EU side results in a focus on isolated aspects of the infrastructure project. Costs and benefits of the infrastructure project are being weighed and assessed at different levels of the administrative and political hierarchy almost in complete isolation from one another. When all of the individual pieces of the puzzle are assembled, an intricate web of actors and side-deals is revealed that has far greater consequences than “just” the increase in Russian gas volumes delivered to the main customer on the EU market, and reaches far beyond the “Berlin-Moscow” relationship.
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