Jeroen Bult

Nord Stream: Estonia’s Lost Battle

It must have come as a most unpleasant surprise to Estonia’s decision-makers. On November 5, 2009, both Sweden and Finland announced that they would grant permission to Nord Stream, a Russian-German-Dutch company, to construct a similarly named gas pipeline across the bed of the Baltic Sea.

The project was controversial from the very beginning. Most Baltic Sea states feared that the pre-eminent participant, the Russian gas giant Gazprom, and its main shareholder, the Russian Federation, would misuse the construction of the pipeline for sinister geopolitical purposes. Finland and Denmark were particularly worried about the environmental impact that Nord Stream would have on the sea’s fragile ecosystem. Estonia, Latvia, Lithuania and Poland also drew attention to its potential political, economic and military risks. Would Russia employ the pipeline as yet another ‘energy weapon’? Would it be able to resist the temptation to apply the principle of divide et impera to the European Union and to ‘neutralise’ those EU member states that are less friendly towards Moscow by simply bypassing them with a pipeline that pumps Siberian gas directly to Western Europe?

The latter group of countries has maintained its hard, critical line (although Latvia sent some mixed signals and even hinted at the possibility of storing Russian gas). For four years, politicians, scientists, journalists and business representatives in Denmark, Finland and Sweden (which took a rather ambivalent view and was critical of the project, but not in an outspoken manner) debated the pros and cons of giving permission to Nord Stream. But quite suddenly, one after another, the three countries gave their blessings. Why did the procedures gain unexpected momentum? And did Estonia, one of the leading opponents of the project, underestimate the changing patterns in these three countries, with which it claims to have a ‘special relationship’? First, let us take a closer look at the positions of Sweden and Finland (Denmark caused fewer problems for Nord Stream because, unlike Sweden, it is a consumer of Russian gas).

Sweden

Both Persson’s social democratic government and Reinfeld’s subsequent conservative government, which took over in October 2006, were ambivalent and hesitant about Nord Stream. As a result, Stockholm almost endlessly postponed its final decision on granting permission to conduct a survey in its Exclusive Economic Zone (EEZ) and to start the actual construction works – much to the annoyance of Russia, Germany and the Netherlands (the German companies E.ON Ruhrgas and BASF/Wintershall and the Dutch company Gasunie also participate in the project). Sweden’s ‘Yes’ was indispensable since its EEZ is the largest among those of all the Baltic Sea states.

Although it is a cliché, Sweden considers itself to be Europe’s ‘guiding country’ in the field of environmental protection, renewable energy and so on. Environmental lobby groups are influential in Sweden and they definitely tried to exert pressure on ruling coalitions (Persson’s minority government was dependent on the support of left-wing parties, including the Greens). Therefore, it was not surprising that Sweden emphasised constantly that Nord Stream should provide a thorough analysis of possible environmental impacts of the construction of the pipeline. In 2007 and 2008, Nord Stream was informed that the reports it had dispatched to Stockholm were insufficient. Some Swedish observers, however, held a different, far more negative view. Svenska Dagbladet columnists Claes Arvidsson and Jan Blomgren, defence analyst Robert L. Larsson, former Defence Minister Mikael Odenberg and some analysts of MUST, Sweden’s military intelligence service, did not conceal their fears that Nord Stream would offer Russia an opportunity to increase its political-military influence in the Baltic Sea region. And did Russia’s fierce reaction to the removal of the statue of the Bronze Soldier in Tallinn (2007) and its invasion of Georgia (2008) not indicate that it was seriously trying to gain more power and influence in its border regions? One might argue that these sceptical ideas coincide with the ones that have been expressed in Estonia, Lithuania and, to a lesser extent, Latvia.

In 2009, the decision-making process in Stockholm accelerated. Retrospectively, the only conclusion is that this was no coincidence. First of all, it should be noted that Nord Stream, mainly at the insistence of Gasunie, started to improve its public relations vis-í -vis the Nordic countries (another incentive for doing so must have been the critical attitude of the European Parliament). Changes in the international context were even more important. The (second) ‘gas war’ between Russia and Ukraine from December 2008 to January 2009 and its consequences for Europe made a number of German politicians and captains of industry aware of the urgency of the Nord Stream project. In their view, an unstable and unpredictable Ukraine should henceforth be avoided. Back in August 2008, Swedish Foreign Minister Bildt and Prime Minister Reinfeld were still most cautious and reserved in their response, while their German counterparts Steinmeier and Merkel hinted that Germany would certainly appreciate if Sweden made its decision in the short term. However, by early 2009, it became clear that they could no longer afford such a wary attitude. There was simply too much at stake for Berlin. They were offered direct supply of Russian gas, without being forced to allow for ‘Ukrainian’ delays over and over again. So, diplomatic pressure on Stockholm increased.

Two months later, in March 2009, Nord Stream put online its long-expected Environmental Impact Assessment (EIA) and thus met one of Sweden’s key conditions. Holding the Presidency of the European Union, Sweden had to keep up appearances and to stay impartial and neutral – any assertive move on the pipeline issue might have been interpreted as an affront by Germany, the Netherlands and France (meanwhile, Gaz de France Suez had embarked on negotiations with Nord Stream about joining the project), not to mention Russia. Last but not least, on October 20, 2009, neighbouring Denmark decided to give Nord Stream permission to construct the pipeline in both its EEZ and territorial waters.

Finally, Stockholm made up its mind. At a press conference on November 5, 2009, Environment Minister Carlgren confirmed that the Swedish government would indeed grant permission to Nord Stream. According to Carlgren, it was clear that the pipeline was permissible under international law and no violations of international standards could be discerned. He expressed his satisfaction with Nord Stream’s EIA (more cynical people would probably argue that after the publication of the detailed EIA, the Swedish government had no other option than to say ‘Yes’ because it had used the ‘excuse’ of EIA for years). Russian Prime Minister Putin expressed his satisfaction and thanked the Swedish government on the same day, but reactions in Sweden were far more negative. It turned out that critical sentiments in the oppositional Social Democratic Party had not faded away. The question is, however, whether this party will really reverse the decision of the Reinfeld government, if it comes to power after the parliamentary elections in September this year (according to a comment in Svenska Dagbladet, it will not).

Finland

Finland has always shared Sweden’s view that Nord Stream should be treated, first and foremost, as an environmental issue, the difference between the two countries being that Sweden also looked at the broader geopolitical context. This may be explained by the fact that Finland is more receptive to Russia’s wishes, possibly due to a carryover effect from the (Cold War) days of ‘Finlandisation.’ The only prominent Finnish politician who has expressed his doubts is Foreign Minister Alexander Stubb who said in early September that the Nord Stream project “is undermining the unity of the European Union” and that “this kind of decision should be made jointly.” In Finland’s political system, however, the president and the prime minister have a key role in foreign policy and as President Halonen and Prime Minister Vanhanen both adhere to Finland’s traditional, ‘Kekkonen-style’ foreign policy principles, Stubb’s remarks quickly sank into oblivion. This did not stop the Finnish authorities from taking a harder stand when necessary – they insisted on receiving more detailed information from Nord Stream and even on an adjustment to the pipeline route (in February and May 2007).

It is not clear whether this step was coordinated with Stockholm, but in the early afternoon of November 5, the Finnish government announced that it, too, would grant permission to Nord Stream. Political and academic circles responded in a relatively mild manner – one expert argued that the decision might even yield a clear environmental benefit because the rate of increase in oil transport by tankers across the ecologically vulnerable Baltic Sea would probably decelerate. The political and military consequences received a similarly ‘laid-back’ response: energy has always been a political issue and if Russia contemplated an increase in its military presence in the Baltic Sea, it would not need a gas pipeline to realise this aim.

Estonia

Estonia has taken a totally different point of view. It has never concealed its thorough dislike of the Baltic Sea pipeline, which it sees as a post-imperialistic conspiracy by Russia and its naí¯ve, post-modern accomplices in Western Europe. This is why Tallinn refused Nord Stream’s request to carry out surveys in its EEZ at a relatively early stage, in September 2007. Only a handful of politicians and academics, e.g. Foreign Minister Urmas Paet and Director of the Foreign Policy Institute Andres Kasekamp, took a more modest and flexible stance. But they were soon ‘overruled’ by the adamant, conservative elite with its dogmatic approach to foreign policy. Rumours have it that IRL hinted to its coalition partner, the Reform Party, that it would withdraw its support from the government if the latter party granted permission to Nord Stream.

One could argue that back in 2006 and 2007, Estonia could afford such an unenthusiastic attitude. At that time, Sweden also displayed a lot of distrust towards Nord Stream and even Finland kept a rather low profile. The United States expressed their doubts about the pipeline as well – Michael M. Wood, the then US Ambassador in Stockholm, even published a very critical article on the issue in Svenska Dagbladet. It is most probable that Russia’s hysterical reaction to the removal of the statue of the Bronze Soldier, its unofficial trade embargo against Estonia, cyber attacks (in which the Estonian government did not hesitate to accuse the Russian authorities of involvement) and the siege of the Estonian Embassy in Moscow contributed to a feeling that ‘revenge’ had to be taken somehow.

Ironically, by saying ‘Ei’ (‘No’) at such an early stage, Estonia lost all influence on the decision-making process. Indeed, it succeeded in keeping the perceived threat from Nord Stream outside, but (once again) the company immediately turned to Finland and asked for permission to construct the pipeline in its EEZ, while making all kinds of adjustments in order to seduce the Finns. The chances that a Russia-friendly Helsinki would give its blessing to the project were greater anyhow. So, Finland became an alternative to Estonia, which was not indispensable like Sweden was (Sweden’s rejection would have definitively meant the end of Nord Stream). Apparently, not a single politician at Toompea (the seat of the Estonian government and the parliament) thought of supporting the project, although a Dutch source who wishes to remain anonymous told the author that Estonia might have displayed a far more cooperative attitude if President Toomas Hendrik Ilves had been nominated for a certain high-ranking international post. In that case, Estonia at least could have made its voice heard at negotiating tables, purchased some elbow room and tried to modify the unpleasant and inevitable reality of Nord Stream. This was the scenario that Sweden and Finland ultimately chose. Was Estonia blinded by the dream of ‘Nordic solidarity,’ assuming that Sweden in particular would follow its courageous example and block the pipeline? But as Lord Palmerston declared in the middle of the 19th century: “Nations have no friends, they only have interests.” Tallinn completely overlooked the (geo)political changes on the European chessboard, as a consequence of which Germany and Russia increased diplomatic pressure on Sweden. All of this is most cynical: due to endless political instability (or even a mess) in Ukraine, which is one of Estonia’s protégés, the realisation of Nord Stream has gained momentum.

“To be honest, I don’t like this project,” Andrus Ansip said the next day after the Swedish-Finnish ‘double decision’. The Prime Minister has every right to hold this view, but this is not how international politics works. All important decisions will now be taken behind Estonia’s back, while Sweden, Finland and Denmark will be able to talk business with Nord Stream, to keep a close eye on the construction works and to detect possible damage to the environment in time. Realpolitik has ultimately prevailed in Stockholm, Helsinki and Copenhagen. A new ‘test case’ will soon show whether Tallinn will follow in their footsteps: on March 15, the Nord Stream company – having welcomed Gaz de France Suez as its fifth shareholder two weeks earlier – submitted an application to the Ministry of Foreign Affairs to carry out an environmental monitoring programme in Estonian waters. However, regardless of Estonia’s response to it, the pipeline clock cannot be turned back again.