Five Myths about Nord Stream Project

22.04.2009 — Analysis

Any new large project has to fight its way through lots of unsubstantiated fears and imposed stereotypes. The noise doubles when a project involves economic and political interests of multiple parties. On the fertile soil of such disputes, ungrounded myths often flourish; these myths make the very idea and the strategic importance of the project blurred in people's perception. In this connection the Chairperson of the RF State Duma Committee for Natural Resources, Management and Ecology Natalia Komarova quotes the five widespread misconceptions regarding the Nord Stream project which appeared in papers recently trying to conceal the main idea of the project which is to ensure the country's energy security and build a solid strategic Russia-EU partnership in this sphere.

Myth 1. Building up the gas supply capacity at the time of crisis when the demand for resources is falling is a "feast in time of plague".

The world economy, regardless of the temporary slowdown of the growth, needs a stable and reliable supply of energy resources. At the time of coming out of the crisis, when not only the existing capacities will have to be restarted but new capacities would have to be created as well, the demand for energy will increase several fold. A little fire is quickly trodden out, as the proverb goes; if we take into account the fact that the consumption of gas is growing by 2% annually on average, and by 2030, according to various forecasts, it will increase by 39-44%, then the slowdown in the project implementation might lead, if not to a "big fire", to a large-scale shortage of energy resources.

Even now the Europe's natural gas needs grow faster than the existing transportation capacities could satisfy. The Nord Stream gas pipeline's capacity is 55 billion cubic metres; this will cover about 25% of the demand for the additional gas imports to Europe.

Myth 2. In the nearest future Europe will stop buying gas and start using more eco-friendly renewable energy sources.

The development of the alternative energy is a very important task with a big future; it is important for the global community as a whole. However, these are the projects which will not be completed today or tomorrow - they would take decades. The renewable energy sources are objectively incapable of becoming a real alternative to fossil fuels in the foreseeable future. This is the very situation when the natural gas is viewed by the world environmental and energy community as the transition between using fossil fuels and the development of renewable energy sources in the future. First of all, this is due to the fact that gas, of all types of fossil fuels, is least harmful to the environment, causing 40% less CO2 emissions than coal which contributes to the fight against the global climate change.

Against the backdrop of Europe's steadily diminishing reserves of gas and other fossil fuels, while the renewable sources cannot as yet provide for the existing needs, the construction of the Nord Stream pipeline becomes the key to strengthening of Europe's energy and environment security.

Myth 3. Subsea pipeline is environmentally dangerous and ineffective gas transportation method.

The gas pipeline across the Baltic sea will connect the European gas consumers with the largest Russian gas fields directly. It will join gas producers and consumers into an integrated energy partnership, whilst excluding the transit countries. The latter in recent times are proving to be the biggest threat to the stability and reliability of fuel supplies.

Subsea pipeline is a well known and tested technology of gas transportation, and the least dangerous for the environment. Overland pipeline requires a large number of booster stations which consume huge amounts of energy and contribute to harmful emissions.

The Nord Stream Company, jointly with competent organisations from Great Britain, Denmark, Germany, Norway, and Russia - internationally recognised environmental experts - has completed the comprehensive analysis and planning. Various options for the pipeline route have been studied over the last decade. The five main options have been considered, taking into account environmental, socio-economic, and technical criteria. The results of the very detailed studies and consultations determined the safest and the most eco-friendly option - the 1,220-kilometre Vyborg-Greifswald line that avoids ecologically sensitive areas, locations of cultural heritage interest, or ammunition disposal sites.

Myth 4. Economic interests of certain countries override the need to ensure environmental safety of neighbouring states.

When projects of this scale are implemented, the economic and ecological interests can not exist separately by definition. National and international legislation demands a thorough environmental impact assessment (EIA) to be carried out prior to approving industrial projects of such scale. The Nord Stream Company has carried out the assessments in each of the five countries through whose waters the pipeline is going be laid - in Russia, Finland, Sweden, Denmark, and Germany. Environmental aspects concerning the construction, commissioning, start-up works, and the organisation of eco-monitoring during the useful lifetime of the pipeline have been carefully studied. The purpose of the EIA is to inform the state authorities responsible and other stakeholders on the potential impact of the proposed work on the Baltic Sea ecosystem, and to build the cooperation in order to determine the safest route.

I should note that the project for the construction of the pipeline on the Russian territory has already been approved by the State Environmental Impact Assessment Agency (the corresponding Rostekhnadzor's Order was signed on 5 November 2008). National EIA materials, however, reflect only the impact of the project on the territory of those countries where the actual pipeline would lie. This makes it necessary to study the possible impact of the project on the territory of neighbouring states. This is the purpose of the Espoo Convention on Environmental Impact Assessment in a Transboundary Context.

Consequently, work with nine countries is envisaged. Five of them are referred to as "Parties of origin" in the Convention's terminology, and the four countries which would experience the impact one way or another are so called "Affected Parties". I emphasise here that Russia has not ratified the Espoo Convention. However, taking into account the transboundary importance of the project, the Russian side has voluntarily taken on the obligation to carry out all consultations and follow all approval procedures in compliance with the conditions stipulated in this document. National laws of the Russian Federation concerning the environment and natural resources allow for all these requirements to be met.

On the whole, since 2006, when the international consultations began, more than 200 comments and suggestions have been received, and many of these have been incorporated into the project documentation. The discussions on the project are ongoing and the deputies of the RF State Duma are interested in promoting this dialogue to the interparliamentary level. The largest international consultation process has been launched recently in connection with the Nord Stream project. I think this experience will also be useful for us in the implementation of continental shelf development projects.

In the process of the voluntary compliance with the Espoo Convention the Russian side has been applying the current international norms and regulations in the sphere of the environmental protection, and was using the European system of environmental quality regulations. I am certain that the experience of the implementation of such projects will give a strong impetus to the development of the Russian national environmental legislation and getting its regulations in accord with the up-to-date international requirements.

The next round of public consultations on the environmental aspects of the project has begun in March in all nine countries of the Baltic region. In these countries the governmental agencies responsible have determined that this round of consultations will finish in June 2009. All permissions for the construction and the running of the pipeline in conformity with national laws of the countries through whose territory lies the route are expected to be obtained by the end of this year which will set the construction start for the beginning of 2010.

Myth 5. There are many obstacles for the project implementation because it will reinforce the European countries' dependence on Russian gas.

In this world there are no entirely self-sufficient countries. The world accepts the worldwide competition as the basis for the development of the civilisation as a whole. When the developed countries supply their products to the world commodities markets nobody mentions "commodity blackmail" or "commodity dependency". In other words, each country is doomed to be dependent in some spheres. There always are state interests in the promotion of the national companies' business, and the legislative mechanisms to balance these interests.

Why, when buying gas, we want it to be just a commodity but deny the gas seller this opportunity, while the seller is only running the usual business formula - expanding the market share and ensuring the sales profitability growth? And why do we see various threats and dictate from Russia in this natural process?

If we understand (and I do not doubt we do) that this commodity lies at the origin of many consequent product chains and is the most accessible, cleanest, safest source of heat and energy for people and most efficient for economies, let us leave in the past all this accumulated political rhetoric garbage about "energy dependency", "energy dictatorship", "energy blackmail" etc., and start the constructive dialogue on the production, transit, and sales of commercial gas.

Objectively today there are no obstacles on the way of the project implementation. Environmental aspects, with which certain parties are trying to speculate, are not a threat to either participating or neighbouring countries at this stage of the project development.

The Nord Stream project is being implemented by an international consortium that includes most prominent energy companies and is quite rightfully viewed as one of the largest and urgent commercial infrastructure projects broadening the mutually beneficial cooperation between Russia and the European Union in the sphere of strengthening the energy security.

It is obvious that the economies of Russia and the EU are interdependent. A third of the world's gas potential is in Russia; without this, the world gas balance is simply untenable. The prospective strategy for the development of our energy cooperation is in the making of mutually beneficial coordinated decisions, the development of equality partnership supported by the responsibility of each party.