The Nord Stream 2 project is a set of pipelines stretching from Russia to Germany in order to provide reliable, affordable and sustainable new gas supplies to the EU. The pipelines are to follow the same route as the already established Nord Stream 1, which was finalized in 2011 and 2012; however, the new adjacent pipes are causing European dissonance as various incompatible interests coincide. The new pipelines, like the previous ones, are to cross through Danish territorial waters, and in turn require a Danish permit.
A heated debate in Denmark concerning the project and Denmark’s position has led to the creation of a new law amendment, which introduces a legal basis for involving also foreign, security and defense considerations in the assessment of applications to certain pipelines. The amendment is expected to be passed in late 2017 and come into effect in early 2018 despite some critical voices.
This article assumes that the amendment will be passed, thus leaving Denmark in a central position in the international debate where it must choose between approving or declining the Nord Stream 2 application. The international community is awaiting and trying to impinge the Danish decision. Either choice comes with advantages and disadvantages for Denmark and the goal of the article is to reflect upon both sides of the argument. What should Denmark decide?
The Danish position(s)
Even though, the amendment gives the power to say no, it is unclear what the Danish government will do when the time comes. The Danish Foreign Minister, Anders Samuelsen, is refusing to comment on whether the ministry will exercise its legal power to decline the application. However, the Danish Minister of Defence, Claus Hjort Frederiksen, has been outspoken in his harsh critique of Russia in terms of European security and this is an indication of the Danish government’s current view on Russia.
The political opposition, led by the Social Democrats, are all united against the project and compel the government to decline the application because of the present tensions with Russia.
The situation is delicate and the relationship with Russia has undoubtedly changed since the former Danish government approved the Nord Stream 1 project back in 2009. Nevertheless, these changes in international relations are, according to the government’s political ally, The Danish People’s Party, irrelevant. The party views the project as being a purely commercial energy project.
Initially, the Danish government hoped that the EU could relieve Denmark from the daunting position amongst the bigger international players. However, the international community including the EU is just as divided and no single voice prevails – leaving Denmark to choose side.
What is in it for me? (The international community)
Eastern Europe and the Baltics are in opposition to the project as they point to potential Russian political leverage over the EU and energy security and dependency concerns. The concerns are real, but just as importantly, the pipelines are going to deprive the countries from transit revenues. On the other hand, Germany views the Nord Stream 2 as an economic project – and so does the French, Austrians, Dutch, Belgians and British who economically stand to gain the most by the new gas supplies.
The West European countries are the least vocal in the international debate. Perhaps it is because the countries presume that it sounds cynical to say that about 40 percent cheaper gas – and the complementary economic benefits – are more important than whatever concerns others might have. Further, as the project is currently a go, it is needless to actively voice an unattractive opinion.
The EU Commission recently concluded that the EU has no legal grounds for taking over the negotiations on behalf of member states. However, the EU has, presented a new initiative, which is to make gas pipelines entering EU territory comply with EU rules on transparency, accessibility, and efficiency – much to Russia dissatisfaction.
The US are like the Eastern European countries against Nord Stream 2 and through the introduction of further economic sanctions against Russia in August 2017, the project is targeted directly by imposing penalties on companies investing in the project. Allegedly, the sanctions are a response to Russia’s continuing involvement in Eastern Ukraine, the annexation of Crimea and the interference in 2016 US election. This introduction is, however, amidst a US export campaign to facilitate Europe’s gas needs and the motives behind this explicit targeting of a competitor is questionable.
The official slogan for Nord Stream 2; “committed, reliable, safe” is affirmed by the Russian Prime Minister, Dmitry Medvedev. He substantiate that it is a mutually and beneficially commercial project aimed at ensuring European energy security.
Ukraine is by far the biggest loser; it is estimated that the country stands to lose $ 1 billion annually in transit revenues (the number is contested). CEO of Naftogaz (the collector of said transit revenues), Andriy Kobolyev, is saying that the Nord Stream 2 is a project envisioned to strangle Ukraine financially. He states that by destroying Ukraine as a state, there is no country to which Crimea can be handed back. He is not alone in this serious critique, and given the recent history between Russia and Ukraine it is understandable that the Ukrainians fear the worst.
Roughly, it can be concluded that even though other factors are rightfully mentioned, those who stand to benefit economically from the project are in favor, and those who stand to lose are against.
To block or not to block
By the adoption of the law amendment, Denmark forces itself to take a stand and either choice will lead to some dissatisfaction at home and abroad. The decision will not stop the project altogether as an alternative route has already been planned in case of a Danish block. Denmark’s power is limited to impeding the project, which to some degree transforms the decision into a symbolical act.
Therefore, even though that the decision concerns the pipelines, it is de facto an official declaration deciding Denmark’s position vis-á-vis Russia.
The current Danish relationship with Russia is characterized by hard (military) rhetoric, economic sanctions and the coming presence of Danish troops in Estonia. It seems contradictory to approve an extensive Russian energy project when considering the status quo.
Especially when you add Ukraine to the equation. Firstly, the current sanctions against Russia is a clear demonstration of the fact that the Danish government supports Ukraine and has not forgiven Russia for its behavior towards its neighbour. Secondly, Denmark has provided substantial aid to Ukraine; amongst others, through the Danish Neighbourhood Programme and will continue to do so in the future (an extension to 2021 is confirmed in the new Danish Foreign and Security Policy Strategy).
The recent adoption of the EU-Ukraine association agreement should further epitomize the neighbourly relationship, and it seems ambiguous at the same time, to allow a project favoring Russia at Ukraine’s expense.
Yet, it might be considered futile and counterproductive to obstruct the project if the consequences are limited to antagonizing Russia and possibly, to a lesser extent, Germany and other West European nations – Denmark’s traditional allies. Additionally, by doing so, other and more important Danish interests may be at risk.
First of all, Denmark wants to ascertain an atmosphere of relative cooperation and stability in the Arctic. Thereby safeguarding that all questions regarding the continental shelf and the North Pole will be addressed according to international law. It is perhaps not wise to provoke the other obvious (and strong) contestant to the claim for the North Pole without a good reason.
Moreover, Nord Stream 2 is a clear testimony of the fact that it is possible to establish commercial links despite the current political deadlock. The Russian economy is in need of reform, and it could be good business for Denmark to assist in the process with transfers of technology and investments. This, in turn, could pave the way for a normalization of relations in the political sphere as well as pointed out by Danish Ambassador to Russia, Thomas Winkler.
Everyone in the international community is thinking about themselves, so Denmark should do so too. Either decision is defendable – both internally and externally – and it ultimately depends on what kind of signal Denmark wants to convey, and what results it hopes to achieve.
If the Danish government seeks a normalization of relations with Russia, while at the same time trying to secure Danish interests in the Arctic, the best solution would be to approve the project. On the other hand, if the ambition is to project consistency in policy and a firm stance on Russia, the Danish government should decline the Nord Stream 2 application.
The Danish government has some time to make up its mind while awaiting the final adoption of the law amendment. Much can happen in the meantime, potentially shifting the attractiveness of one option over the other, as demonstrated by the current German political turmoil.
In any case, the stakes are high, the long-term consequences unknown and the Danish affair might affect Danish-Russia relations for the better or worse for many years to come.
Photo: War on gasoline prices in Houston, TX (public domain)
Disclaimer: The content of this article is the sole responsibility of the author and any opinions expressed therein do not necessarily represent the official position of the Youth Atlantic Treaty Association Denmark