Nord Stream: Not Just a Pipeline

Nord Stream: Not Just a Pipeline 25
for political purposes. Furthermore, Hirdman (interview) argues that ‘the
Russians have learnt from their mistakes and realised that these kinds of
actions will not benefit them in the long run. So, during the latest dispute
with the Ukraine, they did not turn off the gas but tried to negotiate a
deal.’
As already indicated, the Russian energy companies always seem to have
reasonable and economic explanations at hand when energy supplies are
halted, and even if intentions are hostile they can hardly be proven. The
Baltic and Polish fears regarding Nord Stream can therefore easily be
dismissed as unwarranted by simply asking: ‘Why would anyone spend
billions of Euros on a pipeline, and then cut off supplies to the bypassed
states? It does not make any economic sense.’ Nonetheless, it can also be
argued that the Balts, based on their recent energy history with Russia,
cannot be expected to react differently to Nord Stream. Just like the Germans’
recent historical experiences have taught them that Russia can be a
reliable partner, the Baltic States’ recent history has taught them quite the
opposite. This, in turn, helps explain why the German argument of interdependence
and stronger ties with Russia is not accepted by the Baltic
States. Moreover, it should not be forgotten that Germany is a giant in the
European context. With a population of 82.3 million and the world’s third
largest economy (2007) – almost 40 times the size of the three Baltic
economies combined, and 2.5 times the size of the Russian economy –
Germany has a far better chance at balancing Russia than its smaller
eastern neighbours (World Bank 2008: 1-2). This fact is closely linked to
the topic of the next sub-chapter, which assesses another possible threat
related to Russia as an energy supplier that does not involve intentions,
namely that Russia in the very near future may not have enough gas for
everyone. It will be shown that should this scenario unfold, Nord Stream
may in fact pose a significant threat to some of the countries east of
Germany.
4.3 The Real Threat: A Coming Russian Gas Deficit
There is little doubt that Russia has abundant natural gas resources.
According to BP Statistical Review of World Energy 2008, the Russian
Federation possesses the largest proven gas reserves of the world: almost
45 trillion cubic metres (tcm) – some 25% of the world total (177 tcm).
The problem, however, is that the Russian gas sector for decades has
suffered from underinvestment. Coupled with stagnating production in
existing fields, fast-growing domestic consumption, and increasing export
commitments, this leads to grim projections for the near future (Mandil
2007: 5; IEA 2006c; Mäe 2007: 106; Riley 2006). In 2004 Russia had a
domestic gas deficit of 69 bcm, and by 2010 the deficit may be significantly
higher, as indicated below.