Nord Stream: Not Just a Pipeline

3 First Perspective: ‘Bringing Gas to Europe’
In their recent book Der neue Kalte Krieg: Kampf um die Rohstoffe, the
two Der Spiegel-journalists Erich Follath and Alexander Jung argue that
the world has entered into ‘a new Cold War’ – an age of dramatic fights
over increasingly scarce natural resources. International politics, they
posit, is increasingly determined by questions of energy security, and the
‘cards that are currently being dealt’ create new winners and losers
(Follath and Jung 2006: 9-10). In this context, the EU as a whole has a
growing need for external energy supplies, and increased diversification
of supply routes. There are several reasons for the increased focus on
energy security in the EU, but the 2006 gas dispute between Russian
Gazprom and the Ukraine undoubtedly served as a catalyst. 1 Approximately
80% of Russia’s gas exports to European markets flows through
the Ukraine, and when Gazprom on 1 January 2006 reduced the supply
levels to the Ukraine, this also affected Western Europe. According to the
International Energy Agency (IEA 2006a: 88) ‘about 100 mcm [million
cubic metres] that was expected in countries west of Ukraine was not
delivered. In addition, Ukraine itself suffered a shortfall of 150 mcm.’
Although the supply interruption only lasted three days and was relatively
easily coped with through fuel-switching, the interruptions had caused
broad concerns in Europe regarding energy security (Stern 2006: 13; EIA
2008: 88).
3.1 The Nord Stream Consortium’s Explanation: The EU
Needs Gas
According to Nord Stream AG, the planned pipeline through the Baltic
will be one – if not the – answer to Europe’s energy challenge. The
official documentation states that ‘it is evident that without Nord Stream,
the EU will not be able to cover its gas needs. Therefore, Nord Stream is
an important contribution to security of supply, as it will meet a quarter
of additional import needs of Europe’ (Nord Stream 2008d).
Indeed, the development within the EU in the past 20 years shows a clear
trend towards increasing import dependency. Whereas both demand and
production grew until the mid-1990s, production has since stabilised, and
from 2002 it has been declining, whilst the consumption level has kept
rising (Figure 2). Gas imports as percentage of consumption rose from
approximately 40% in 1994 to almost 60% in 2006 (Figure 3).
A reference to historical developments, although serving a powerful
rhetorical point, is not sufficient to warrant the building of a controversial
pipeline, but projections of EU’s gas import needs show a similar trend.
As pointed out by Dieter Helm (2007: 13), ‘Gas is the fuel of choice for
electricity generation in Europe, and demand is projected to rise steadily
over the next decade.’ Nord Stream AG, officially relying on data from
the IEA, projects EU’s annual gas demand to rise from 570 bcm in 2005
to 712 bcm in 2015. At the same time, EU’s internal gas production is
steadily declining, and, according to the company, the share of imported
1 For a thorough analysis of the Russian-Ukrainian gas dispute, see Stern (2006).
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