The Wiley Bear – Russian Motives for the Nord Stream Pipeline

Essentially Russian foreign policy is dominated by Russia’s view of the world.  Historically Russia has been a great power, and it strives to maintain this image.  This essay explores how Russia uses geopolitics to its advantage.  

The Nord Stream Pipeline is currently under construction; once done it will carry natural gas beneath the Baltic Sea directly from Russia to Germany. The project is funded by a consortium of companies in which Gazprom, a Russian natural gas giant, is prominent. The fact that Gazprom ultimately answers to the Kremlin demonstrates that the Russian state is behind the new bypass infrastructure. I will argue Moscow backs the Nord Stream Pipeline because of the Vladimir Putin administration’s foreign policy construct. Moscow sees the world as in a state of transition from an American dominated power balance that began with the fall of the USSR to one that is made up of several global powers. Putin is determined to ensure Russia is re-established as a major global power. In this quest Putin sees the European Union as a threat and Russia’s energy resources as a tool with which he can combat this threat. I will demonstrate that the Nord Stream Pipeline, in particular, is not seen as an economic advantage to boost export quantity, but as a geopolitical tool which will allow Russia to gain influence over states formerly under its control while dividing the Union itself.

Nord Stream

Putin hopes to reestablish Russia as a great power

The Russian political elite have historically always believed the Russian state must defend Russia from influence and invasion by securing its frontiers. Currently, the European Union Institute for Security Studies’ publication Global Security in a Mutlipolar World states that the official foreign policy doctrine of the Russian Federation views the world as in a transition from the Cold War bipolar power-balance and a short period of American domination to a “diverse landscape based on a changing distribution of power.” The current administration that arose with Putin follows the Russian foreign policy tradition whereby it has a tendency to view the world in traditional balance-of-power terms. He seeks to secure Russian influence in Eastern Europe and aspires to re-establish Russia as a great power in the new global paradigm.

The EU is a threat to Russia’s great power status

The Russian government believes the institution of the European Union and its expansion is a threat to its aspiration to re-establish Russia as a great power. The European Union – arguably more so than any other intergovernmental organisation – promotes human rights, democracy, the rule of law, and the free market. This seen by the Kremlin as an attempt to intervene in Russia’s internal affairs – seeing as Russia is governed by an authoritarian regime. Russia also sees EU expansion as threatening. Russia had annexed the Baltic States, Ukraine, Belarus and eastern Poland prior to the Second World War; it gained control of the Eastern European Warsaw Pact states in 1945. Since then it has seen this area as a geopolitical buffer-zone. During the collapse of the Soviet Union, Moscow gave up much of its influence of both the Warsaw Pact and the former Soviet Republic states. Most of the former Warsaw Pact states would join the EU in the following two decades. Expanding EU integration is seen by Moscow as an attempt to install Russia-hostile political regimes in Russia’s former sphere of influence. In contrast to the EU’s value-driven foreign policy, Russia’s government places importance on stable governance, it believes the promotion of democracy and the rule of law risks regional stability. Thus, Moscow remains very wary of the EU’s Eastern Partnership, an attempt to deepen EU ties with the post-Soviet republics of Belarus, Moldova, Ukraine, Georgia, Armenia, and Azerbaijan. To Moscow this is an attempt by the EU to contain Russia by removing the legitimate authoritarian regimes and installing Russia-hostile governments. Furthermore, following September 11th , 2001, relations between Washington and Moscow improved. The Bush administration moderated their criticism of the Kremlin’s policy towards Chechnya and its conduct during elections while Russia supported the United State’s aggressive policy towards Islamic terrorism. However, the same improved relations did not occur between Brussels and Moscow. This can only have cemented Putin’s view that the EU and Russia are inevitably at-odds.

But Europe needs Russian gas

The fact that Europe relies on Russia for much of its energy imports means Moscow can use its control over its energy exports as a foreign policy tool to re-establish its power. During the 1980s, European leaders became determined to reduce their overdependence on oil and gas supplies from the Middle East by turning to the USSR. By 2008 more than one third of European oil imports and almost one half of gas imports came from the Russian Federation. Despite Medvedev’s argument that Russia depends on Europe as a customer for its exports, European governments are right to be anxious that European dependence increases Moscow’s influence. This is true both because natural gas in itself is a ‘dependency – inducing fuel’ (it is difficult to replace and it is broadly used by industry and consumers) and in the past Russia has often used its supplier advantage to blackmail individual European states.

Gazprom Headquarters in Moscow

Gazprom Headquarters in Moscow

Russia’s gas is directly controlled by the Kremlin

The Kremlin’s control of Russia’s energy reserves and their export display that Russia believes it can use this advantage to its benefit. Moscow has recognized Europe’s dependence on its energy exports as a valuable asset for expanding its influence: in this way it can combat EU expansion and re-establish itself. Putin’s main goal as president was to reacquire companies that were formerly under the Soviet state’s control. In 2000 Putin began his presidential term by appointing Dmitri Medvedev as chairman of the board of Gazprom – Medvedev would later go on to become President of Russia during Putin’s time as prime minister. Gazprom is responsible for 93% of Russian natural gas production and controls 19% of the world’s natural gas reserves. Gazprom does not operate like a private corporation: it understands that it may at times have to temporarily trade maximum profits for the state’s geopolitical goals. Furthermore, the Kremlin has both eliminated private Russian competitor companies like Yukos and enjoys full control of energy distribution and export through the state-run company Transneft. The Kremlin has effectively gained direct control over Russia’s energy reserves and their export.

Cutoffs to influence Eastern Europe

Moscow hopes to use Europe’s dependency on its energy exports to re-establish Russian influence in Eastern Europe – thereby neutralizing the threat of an expanding EU. Past cases prove this is the case. While the Ukraine was a Soviet republic in the former USSR it paid a much cheaper rate for Russian natural gas, a policy which continued after the Cold War. When Victor Yushchenko became president of Ukraine during Ukraine’s Orange Revolution of 2005, he adopted a noticeably pro-Western stance. Kiev’s new relations with the West prompted Gazprom to demand that Ukraine pay western rates for gas. When Kiev refused – in January of 2006 – Gazprom reduced its flow of gas to Ukraine. The conflict illustrates Moscow’s determination to use gas exports as a tool to gain influence – this is best illustrated by Russia’s ambassador to Ukraine (and former Gazprom chief) Viktor Chernomyrdin’s explicit warning that “talks on gas prices would depend on results of Ukrainian elections.” Over forty energy-supply cut-offs to the Baltic states and the former Soviet republics have taken place since 1991, and three incidents of explicit cut-off threats have been made without actual supply cut-offs occurring. Although it cannot be proven in all of these case that there was a political motive whereby the Kremlin was directly influencing these states’ policy, Robert L. Larsson’s report on behalf of the Swedish Defence Research Agency states that “on seven occasions this appears to be have been the case.” Transneft cut off oil supplies to Lithuania (1991-2001) in order to punish the privatisation of a Polish company, and Latvia (2003) to gain leverage in order to buy-up port infrastructure. The export of oil is seen as a way to blackmail Eastern Europe; Moscow hopes to re-establish a Russian sphere of influence in the area.

The Russian Bear knows how to use its geopolitical advantages

The Russian Bear knows how to use its geopolitical advantages

The Kremlin has run into a major problem when using its resource assets as a foreign policy tool to gain influence in Eastern Europe; when it cuts off gas the Eastern European state in question uses its own geopolitical location as a transit state to jeopardize Russia’s reputation in Western Europe. In 2006 Ukraine responded to the cut-off by siphoning off enough gas for itself and only sending the remains westwards. Although Russian leadership argued they were simply attempting to make Ukraine pay the ‘market-price’ for gas, the fact that the cut-offs coincided with a more pro-West stance in Kiev meant most Europeans were sympathetic to Ukraine. Russia’s aggressive policy backfired because Western European states both simultaneously understood that Russia was punishing Ukraine for the Orange Revolution and lost faith in Russia as a reliable supplier of gas because it was their supply that was hurt in the conflict. In the Belarus 2007 case, German refineries faced oil shortages, prompting German Chancellor Angela Merkel to express concern over Russia’s reliability as an energy supplier.

Good relations with Western Europe are important

While Russia tries to secure itself by gaining influence over Eastern Europe it believes it can accomplish this by maintaining good relations with individual Western European states. Losing its reliable-exporter reputation will only hurt Russian economic interests. While Moscow sees the shared values of the EU as threatening, it believes individual states can at least be expected to act in their national interests. Therefore Russia sees Germany and France’s actions as predictable and understandable, it does not see these states as a threat like it does EU expansion. Recently Russian relations with both France and Germany have been warm. Both France and Germany blocked US president Bush’s proposal to extend NATO membership to Georgia, and the French president Nicolas Sarkozy was instrumental in finding a resolution to the 2008 Russia-Georgia conflict that did not place blame on Russia. France even sold Russia advanced amphibious assault ships despite Georgian protests. Berlin and Moscow have had a very close relationship since Chancellor Gerhard Schroeder’s time in office, and since the end of the Cold War Germany has become Russia’s largest trading partner. This is largely due to German gratitude towards Russia regarding German reunification, and a German attempt to support Russia economically in the belief that an economically weak Russia presented a security threat. Berlin thus acted as an advocate for Russian interests within Europe. Although Merkel has tried to balance this relationship by building ties with Eastern European states who feel threatened by Russia, she must contend with German business which benefits from the trading relationship that results from close ties with Moscow. Maintaining good relations with individual Western European states is important to Moscow just as good relations are important in any other trading relationship. Moscow does not want to cool these warm relations, this would not be in its interest.

Threaten the East with cutoffs, while still supplying the West

The Nord Stream Pipeline will allow Russia to threaten Eastern European states with gas cut-offs while maintaining its good relations with individual Western European states, in effect solving the problem described. When construction is complete the pipeline will deliver gas directly from Russia to the German state of Mecklenburg-Vorpommern by running beneath the Baltic Sea, this bypasses the two existing pipelines to Germany which cross Belarus and Poland in the north, and Ukraine, Slovakia, and the Czech Republic in the south. Russia intends to act as a reliable supplier of energy to Germany and Western Europe while at the same time threatening Eastern Europe with cut-offs.

As previously mentioned, Russia sees the European Union itself as a threat to its interests, it thus uses the Nord Stream Pipeline not only to control Eastern Europe, but also to divide the EU. The EU’s fundamental weakness is that it is not a single energy market, rather it is a combination of individual actors, each bargaining with Russia over energy supply and prices. The Kremlin recognizes this weakness, and uses its supplies to entice each state to act in its own interest. The Nord Stream Pipeline is in the interest of Germany because German consumers are charged transit fees for each country the current pipelines cross. It will also make Germany a European hub for Russian gas. The fact that two German and one Dutch firm are involved in the Gazprom-led consortium that is currently constructing the Nord Stream illustrates that the new infrastructure is beneficial to Western European companies. While Germany supports the Nord Stream Pipeline, Belarus, Poland, the Baltic states, and Ukraine vehemently oppose the Baltic pipeline as it jeopardizes the geopolitical leverage they currently hold. Warsaw has argued that such deals need to be made between the EU and Russia, and Polish leadership has gone as far as to make a comparison between the Russian-German pipeline deal and the Soviet-German non-aggression pact that divided Poland in 1939. Despite this, Germany has gone ahead and bilaterally dealt with Moscow for its own benefit. Germany’s actions have marginalized the Poland and Baltic states. Eastern European protests to the Baltic pipeline have been depicted as Russia-phobic and unrealistic. Furthermore, Germany is the central actor within the EU, or is one of the central actors along with France. Either way, when Germany acts in its own interests it inevitably jeopardizes the Union in which it is the central member. This illustrates how Russia uses its position as an energy supplier to create tensions and division among individual EU members. It entices each state to act in its own interest – Moscow hopes this will inevitably divide the Union. When the EU divides the institution itself becomes weaker, this benefits Russia because Russian leadership sees the EU as a threat to Russian interests.

Pipeline

Its not all about increasing output

A critic of my argument could say that Russia is simply pursuing economic benefits. The Nord Stream Pipeline only boosts exports to Germany (Russia’s largest trading partner) which benefits Russia economically. Firstly, this argument ignores past examples of Russia using its gas exports to blackmail Eastern Europe. Secondly, the fact that undersea pipelines are far more expensive than land-based ones proves that simple economic thinking is not the only factor in play – Russia must be considering other benefits of the pipeline. Finally, the Nord Stream pipeline will not lead to increased exports since Moscow has not invested in boosting gas production. Therefore it is clear that the Nord Stream Pipeline is not a project that is economically motivated, it is a project to reroute current gas lines in a way that will allow Russia to gain influence and divide the EU.

The Kremlin is determined to ensure Russia is among the great powers who will make up the new world order. To do this Moscow believes it can use its energy reserves and their export to secure itself by re-gaining its influence over Eastern Europe. The Kremlin has in the past influenced Eastern European states with its position as an energy-supplier, however cut-offs have hurt Russia’s image as a reliable exporter in Western Europe. Russia must maintain a good image if it is to maintain its good relations with Western Europe – which Moscow does not see as threatening but beneficial to trade. The Nord Stream Pipeline both eliminates the risk of cooling relations with Western Europe while allowing Moscow to bring former Warsaw Pact and post-Soviet Republics under its influence. It also entices individual EU members, primarily Germany, to act in their state’s individual interests creating tensions within the Union. Tensions divide the EU and reduce its threat to the Kremlin’s aspiration of re-establishment in the new global order. Therefore, Russia is constructing the Nord Stream Pipeline due to the Kremlin’s geopolitical foreign policy construct.

Works Cited
Bugajski, Janusz. Expanding Eurasia: Russia’s European Ambitions. Washington D.C.: The Center for Strategic and International Studies Press, 2008.

Goldman, Marshall I. “The new imperial Russia,” Demokratizatsiya 16.1 (Winter 2008): 9+. Accessed March 10, 2012. http://go.galegroup.com.myaccess.library.utoronto.ca/ps/i.do?id=GALE%7CA206 988321&v=2.1&u=utoronto_main&it=r&p=AONE&sw=w

Goldman, Marshall I. Petrostate: Putin, Power, and the New Russia. New York: Oxford University Press, 2008.

Larsson, Robert L. Nord Stream, Sweden and Baltic Sea Security. Stockholm: Swedish Defence Research Agency, 2007. Accessed March 10, 2012. http://www.foi.se/upload/english/reports/foir2251.pdf

Light, Margot. “Russia and Europe and the process of EU enlargement.” In The Multilateral Dimension in Russian Foreign Policy, edited by Elana Wilson Rowe and Stina Torjesen, 83-96. New York: Routledge, 2009.

Lucas, Edward. The New Cold War: Putin’s Russia and the Threat to the West. New York: Palgrave MacMillan, 2009).

Mankoff, Jeffrey. Russian Foreign Policy: The Return of Great Power Politics. Lanham: Rowman and Littlefield, 2012.

Zagorski, Andrei. “The limits of a global consensus on security: the case of Russia.” Global Security in a Multipolar World (2009): 67-84. Accessed March 6, 2012. http://www.iss.europa.eu/uploads/media/cp118.pdf

Stent, Angela. “Germany-Russia Relations, 1992-2009.” In Russia and Europe: Building Bridges Digging Trenches, edited by Kjell Engelbrekt and Bertil Nygren, 156- 166. New York: Routledge, 2010.

Stern, Jonathan P. The Future of Russian Gas and Gazprom. Oxford: Oxford University Press, 2005.

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