Geez!!! That's a seriously long pipeline to build underwater, and in a seriously cold region too. I didn't know they could even do such things before I read this.

Many thanks Selene for a fascinating report. I hope the Estonians get some useful jobs on the maintenance sector.

Shox thats exactly what I thought, and I'm not a mech eng.

Doesn't the Baltic freeze over for months every year??

You can just see the gravy train of the EEC in this one - 100M for 'environmental research' - thats a nice little earner. I thought the Baltic was full of shipping and fed freshwater by huge rivers? I suppose the impact is when it leaks...[edit: it's gas dozey, not oil - so where's the environmental damage??]

Fresh speculations :
Gazprom might abandon Shtokman

Shrinking exports to the EU and the strong growth in shale gas production in the U.S. might make Gazprom drop its ambitious plans for the development of the Shtokman field in the Barents Sea.

This was all over the Norwegian news yesterday, since Statoil (Norweian oil. Co) is a partner in the project.

The reason (!!??!!) :
US natural gas resources may question Shtokman

Unconventional resources of shale gas in US may close North-American market for Shtokman gas. Gazprom is contemplating over its marketing policy.

North stream makes me uneasy since Russia and Germany has chosen a more expensive route.

A similar pipeline thru Estonia, Latvia, Lithuania and Poland would have been cheaper to build since it would have needed less steel by using compression stations and a more even preassure, no thick iron ore concrete layer as ballast and protection and mutiple low tech welding teams instead of a giant pipe laying ship. But there would have been a cost for buying a right of way.

A pipeline on land would have also have fulfilled the EU free market goals by providing an almost unlimited capacity for gas trade along the route thru the Baltic countries and norther Poland.

Yet Russia and Germany has choosen to spend billions of euros for a less usefull pipeline. The only compelling reason I can find for this is a strong wish to trade gas with western Europe withouth dependancy on eastern Europe. This opens up for ugly politics.

But I am even more worried that Russia might not invest enough in natural gas production to fill this pipeline and fullfill all contracts.

Pondlife wrote:

Doesn't the Baltic freeze over for months every year??

You can just see the gravy train of the EEC in this one - 100M for 'environmental research' - thats a nice little earner. I thought the Baltic was full of shipping and fed freshwater by huge rivers? I suppose the impact is when it leaks...[edit: it's gas dozey, not oil - so where's the environmental damage??]

I do not see the problem in a portion of sea freezing superficially for periods, if the pipeline runs mostly under never freezing waters. Many pipelines go through freezing areas on surface, without big problems.

The problem of leaking in the already existing Russian long Siberian pipelines is right now. Mariano Marzo, a professor of Energy Resources in the University of Barcelona, estimates that probably up to 30 percent of the gas piped to Western countries may be lost by leaks, due to obsolete infrastructures and lack of proper maintenance in them.

South Stream was mentioned in passing in the article, but there was no info about it. I'd be interested to at least know where it is. Any maps available? What is the status of its construction? Is it controversial too?

cheers,
OZ

well, actually Estonia would be excluded from this deal altogether. One of the reasons Nord Stream is so controversial is the fact that it's so political. Estonia and Russia had a huge rift in 2007 and consequently is excluded from the deal as the pipeline doesn't run through Estonian waters. Estonia would have the right to block it, but it would then be seen as a trouble maker in the EU and no country wants such a reputation.

Regarding the concern for leaks - yes, it's a serious environmental issue, but hopefully the project will remain closely monitored by non-Russian partners as well as by the countries that are located by the Baltic Sea

Isn't one of the attractions to Russia of an underwater route the fact that it would avoid having the pipeline go through Ukraine or some other country that Russia might have to pay transit fees to?

I think on a previous thread regarding oil pipelines, there was some discussion of Russia perhaps trying to cut back "export land" (the area that gets a disproportionate share of the resource) to just Russia, instead of including Ukraine or Belarus as well. It seems like there may be some of the same issue here as well--but the alternate route here is just Ukraine, and probably needs replacement/upgrading anyhow.

Great posting. A remark about your source www.energy.eu :
This looks af it it was an official website from the EU commission, but it is not. According to the site
"Europe's Energy Portal is a commercial organization, strongly rooted within the EU, but run independently from the European Union.
The portal is ran by the undersigned, together with a small team of professionals from the energy and environmental sector."

So one might be somewhat wary about the content.
For example the site contains a section called "Depletion", which sounds like a good intention. But stupidly, it calculates the "Estimated date of exhaustion" on a base of linear extraction.
For example this is for oil : 20:58 Oct 22, 2047
and for coal: 20:05 May 19, 2140

I think a EU commission site (at least under the PO aware former Commissioner Andris Piebalgs) wouldn't publish such a nonsense.

Thanks Selene (via Chris). Another excellent factual article with pertinent analysis. I can't help but wonder how the nations most affected will work to break the addiction to non-EU oil (if they do at all).

A good article.

My thoughts.

A Russia-Germany (EU) alliance is the nightmare of every statesman in the UK and in the US. The US needs Europe (Germany) to preserve their current role of being number one superpower.

The goal of Russia is thus to win over Germany to their side.

This pipeline is definitely political. Poland is one of the main allies of Washington in the region. Ukraine is flirting with NATO membership. Russia's goal is to neutralize these countries on the political scene. The South and North Stream pipelines are the tools of this policy.

In the meantime the USA (and UK) is doing everything it can to antagonize Russia and the EU. (Missile shield is a prime example)

This is a very dirty game. The other side of the game is played of course in Central Asia and the Middle East. As long as the US can keep their military presence in that region, they control the only alternative where Europe can buy energy from. If you ever wondered what is the reason behind the US military budget, look no further. It is the control over the Heartland, which is not Eastern Europe as stated in the original Mackinder theory, but it is Central Asia and the Middle East. Without the support of Europe, it is impossible to maintain a military presence in the Middle East. Without a Middle East US presence, the EU can freely chose its alignment - which would naturally lie with Russia.

In my view, despite all its shortcomings, Russia is winning. And it is foolish for Eastern European countries to fully support either of the great powers. Poland has already entered a world war in alliance with the UK and US, but what it did it gain them? Countries in Eastern Europe have a nice bargaining chip on the table - their geographical location. Poland and the Ukraine are about to lose out on it. Antagonizing Russia was a foolish policy by these countries.

Well that all sure points up how much easier negotiations are in the bulk of North America with only two national governments involved. 'Local' has its pitfalls.

Thank you Selene

Interesting Days for energy supplies in western Europe. I bet they love depending for their energy from their former and recent adversary – the Great Eastern Bear.

Your table did not include The United Kingdom which has a very interesting history in energy and economy. Do you know the figure for the UK? I would think it is quite high. Will the Nord Stream gas reach the UK?

The UK was once a major player in energy and manufacturing. Not anymore. The reasons are interesting wrt Peak Oil and dependency on Russian gas pipelines.

Thomas Newcomen developed the Steam Engine in 1712 to pump water out of English coal mines. Coal in those days was used for domestic heating and cooking. Still is in parts of Europe and the UK today. With Watts refinements in the 1770’s, the Steam Engine and British coal, powered the Industrial Revolution. The UK developed massive industry including; textiles, steel, ship building, car, truck and aeroplane manufacture and household and electrical goods. In 1908 Winston Churchill as First Lord of the Admiralty mandated that the British Navy (then the most powerful navy in the world) would switch from coal power to oil. This started Britain’s dependence on oil from the Middle East and the decline in its coal industry.

British industry was still in working order at the end of the second world war only 65 years ago – but now all gone. What happened? Well the UK discovered the North Sea Oil field. Wow! We’re Rich. We don’t need those dirty little industries. We don’t even need coal. And the coal miners keep asking for a more equitable share of the nation’s mineral wealth that they were digging out in dark, dirty and dangerous conditions. So manufacturing was sent overseas and the Thatcher government closed down the pesky coal mines. At the same time the oil spigots were opened both in the UK and in Reagan’s US government. This dropped the price of oil and starved Russia of foreign capital from the sale of its oil, which was about its only source of foreign exchange. England expanded its Financial Service industry to compensate for the loss of its manufacturing industry. London became a world financial centre second only to New York. The UK went into hyperdrive on the growth economy program (you know, new houses, new shopping centres, new business parks) and increased its immigration significantly to build and fill all these goodies.

Russia ran out of cash and we won the cold war. Probably a good thing I guess. But then two things happened that were really really bad for the UK. First the North Sea Field peaked and went into decline which continues to this day. Wow, Isn’t that exactly what this TOD site is all about? Now the UK has a serious energy crisis on its hands. Just last year (2009) the government announced a crash building program for nuclear power (the wrong solution IMO). I believe the UK is almost totally dependent on Russian gas for all its domestic use, mostly heating. (Selene help me out here) So who won the war you might ask and who has whom by the throat?

The second thing that happened to poor old England was the Global Financial Crisis. All those lovely financial service jobs went crashing down or onto government bail out plans. Man you could sure confuse the UK and USA in this story, they have almost identical scripts.

So where is the UK today? No manufacturing industries, no coal mines (there is still coal left in England and Wales but I don’t know how much or what quality), a large new population many from religious and ethnic backgrounds that do not want to integrate into British society, a rapidly declining energy base from the once mighty North Sea Oilfield, a GFC induced decline in financial service industry and dependency on Russia for its domestic gas. Add to this a high unemployment rate, decreasing government services and overcrowding in cities, the UK to me seems to be slowly sliding into third world status. (I don't live there but I go there every few years).

Perhaps this is the model for the deindustrial future we might all be facing if government and business continue their dream of BAU and growing economies in the face of energy decline.

Sorry for the long “comment” but I thought the UK is a very interesting case: from industrial superpower to an energy deficient deindustrial country with declining living standards all due to a regional Peak Oil scenario. The final irony is depending on your enemy for a major source of your energy.

I'm from Czech Republic. You have a mistake Slovak Republic has 100% dependency on Russian gas, Bulgaria too. Czech Republic have 100% gas from Russia, but it's a SWAP deal (Norway gas is burning in Germany and Russian gas is burning in Czech Republic).
I think Nord Stream will be positiv for Europa and for Czech Republic, but not good for Poland, Belarus and Ukraine. Today to Europe and Turkey (NATO member) leads this pipelines:
Jamal to Germany (max capacity 34bcm) throught Belarus and Poland
Blue Stream to Turkey (max capacity 16bcm)
The rest (normal use cca 110 bcm) throught Ukraine.
Germany is angry, because Ukraine and Belarus are't reliably and it's threat for Germany. Ukraine and Belarus rack Russian and Russian have to make big sales for this countries.
After build Nord Stream will no longer Poland transit country, so Poland lose fees - there is a biggest problem for Poland.
I think it's nearly 100%, that this pipeline will be build. The pipes are made, loans confirmed, all needed countries permited. Russian already builds compressor station and German builds OPAL pipeline - it connects to Nord Stream and it would be without Nord Stream uselessly pipeline.

Hi
I write from Poland and at first I must clear you all on some basics.

1. Poland does not get any money from Russia since 1989 when we won our independence from Soviet Union.
2. Poland natural gas import is 67% not 79%. Local production is at 33% and constantly rising.
3. Poland has enough of its own gas to be self-dependent in this area and even export. Russia realizes that, thats why they need a route around Poland for they know it best, that within 5-10 years Poland might reach extraction level which will allow to stop buying from Russia. The only reason this hasn't been done yet is that people in mining industry in Poland were Russia's loyal servants, but every day they are replaced by young wester-oriented specialists, who are loyal to POLAND, not to Russia.
A handfull of western companies have acquired concessions for gas exploration and they are prepared to drill any moment. Poland has gas fields estimated for 200 years of our needs.
4. Poland doesn't need much of natural gas and our demand diminishes every year. New apartments being built have no gas installations at all. Electricity, wood or coal heating is cheaper and more effective.

To sum up:

Nord stream is not a great vicory of Russia over Poland or any other countries. UE will help Poland if we need it. UE sends financial help for Russia every year in millions of Euros and Russians will need European money for food sooner than Europe will need their gas.

So please, don't worry. I'm not worried at all so neither should any of you be.

After all Russia is a poor country with 80-90% of its budget incomes coming from oil and gas. So it is enough if the average price of oil drops below 60$/barrel and they go bancrupt in 2 years.