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Germany Pushes for Gas Pipeline with Russia

12:13 PM, Feb 2, 2009 • By ULF GARTZKE
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German Chancellor Angela Merkel has urged EU Commission President Jose Manuel Barroso and Czech Prime Minister Mirek Topolanek, whose country currently holds the six-month rotating EU presidency, to back the planned Nord Stream gas pipeline linking Russia and Germany via the Baltic Sea. According to leaked excerpts of the letter, published by the Financial Times Deutschland, the German leader argues that the recent gas dispute between Russia and Ukraine showed "that the EU must become more independent and crisis-resistant in its energy supplies". To achieve that end, Merkel writes, the EU needs to better diversify its gas supply and transport routes. Hence it was of "great significance" that the Nabucco, Nord Stream and South Stream pipelines should be "politically desired and supported by all EU member states".

While Merkel stayed clear of criticizing the rival Nabucco and South Stream pipeline projects, it is obvious that the German chancellor's letter was designed to counter comments made by Prime Minister Topolanek earlier this week at conference on Nabucco in Budapest, where he referred to the pipeline "a key project for the well-being and political independence of the whole of Europe." Topolanek went on to criticize the Nord Stream and South Stream projects for "cementing the EU's high level of dependence on Russia for its energy" and described it as a "a direct threat to the Nabucco project." For an overview of both existing and planned future gas pipelines connecting Russia to Western Europe click here.

The Nord Stream pipeline project was initially agreed to in late 2005 by then-Russian President Putin and former Chancellor Gerhard Schroeder, who signed the deal during his last days in office. Schroeder's subsequent appointment to the Chairmanship of Nord Stream's shareholder committee (a position he retains to this very day) was heavily criticized both in Germany and abroad for constituting an unprecedented mixing of political and private commercial interests.

Chancellor Merkel's recent letter is a clear sign that - the controversial Russian connections of her predecessor notwithstanding - Berlin firmly believes that the Nord Stream gas pipeline will improve Germany's energy security by providing for a direct stream of Russian gas and by bypassing both current and potential future "veto players" (i.e., current transit countries like Poland, Ukraine - even Turkey in the case of Nabucco - that could potentially block German gas imports in the future, etc.). Obviously, even Nord Stream is not an ideal solution for Germany, which currently derives more than 40 percent of its gas imports from Russia. However, as German officials and energy expert are eager to point out, gas pipelines are a two-way street; yes, the Russian side can indeed cut off supplies; but if they do that, they will not get any export earning either (and Russia's crumbling energy infrastructure makes it quite difficult for Moscow to store the extra gas in the meantime). Since, for the time being, achieving full energy independence is not an option for Germany - unless Berlin decides to generate energy from coal, of which there are plenty of reserves, or goes nuclear, which is unfortunately strongly rejected by a majority of the population. Given these constraints, the best way to bolster Germany's energy security (as well as that of other Western European countries such as the Netherlands) is for Berlin to push for diversification of supply and the creation of interdependent energy export-import relationships with key players such as Russia. The planned Nord Stream gas pipeline is an important element of that strategy.