The Pipeline Pitting Politics Against Business

NordStream Will Move Ahead, With or Without Poisonings

Germany’s Merkel wants nothing more than Russia’s NordStream2 pipeline, which will deliver Russian gas directly to Germany, bypassing the two key opposing countries, Ukraine and Poland. Nothing has forced her to waiver from her dedication to NordStream and ensuring the Russian gas noose tightens around Europe’s neck, including U.S. sanctions threats. 

Russia has seemingly had carte blanche to do whatever it wishes, either at home or on German territory, without getting any sense that Merkel would respond by pulling out of the pipeline. The assassination of a Georgian, which was likely a Russian state-ordered hit, on the streets of Berlin last summer did not make her flinch. Neither, it would seem, will the confirmed poisoning of Russia’s opposition leader, Alexei Navalny, who is now in a coma in a hospital in Berlin. While the media like to say that Merkel is being “pressured” into rethinking NordStream, she is still unlikely to give in readily - even under mounting domestic pressure. 

The pipeline is a done deal. It only has some 160 kilometers left to build out of 1220 kilometers. U.S. sanctions have already been doing their best to delay the inevitable, but Merkel isn’t going to be the one to pull the plug on a project that is 90 percent complete - and one that is vital to her constituency in Mecklenburg-Western Pomerania, near the coastal area where the pipeline will run. Instead, Merkel would like very much to separate, as she has noted on many occasions, “business operations” such as the pipeline, from issues of human rights and politics as they relate to Russia. 

Merkel, of course, does not believe this herself, and is fully aware that NordStream is far more than merely a “business operation”. This pipeline is a huge geopolitical victory for Putin. And the Navalny poisoning with a Novichok nerve agent (the same used in an attempted assassination for former Russian intelligence figure Sergei Skripal and his daughter in 2018) will not stop NordStream, but will make it more difficult for Merkel to continue to preach to the German public about peace with Russia via business. Tough times are ahead for Merkel with the opposition latching tightly onto the Navalny poisoning, but Russia has already gotten away with murder in Berlin, and this will not be the end of the pipeline to Putin’s power. 

In the meantime, U.S. sanctions are already biting, with German energy company Uniper warning that it might have to halt construction as a result, adding further delays to the project. But this is a legacy project for Merkel. Uniper is one of the five financing partners for Gazprom in the NordStream project. 

This pipeline is one of the best examples of the intersection of business and geopolitics, and everyone has some skin in this game on one side or the other. For the Trump administration, of course, it is not all about geopolitics and one-upping Russia - it is about getting the European market for all that new American LNG, which won’t be necessary once Russian gas is pumping directly into Germany.