Welcome to our first blog in 2022.
Please read the article and provide thoughtful insight into the policy issue here. Reference your thoughts and include URLs when needed. Tie your area of expertise into the discussion when possible. If you need to know more about this topic, do some research before you post. Be polite, be professional, and have fun.
The Nord Stream 2 Pipeline was completed in September of 2021. The pipeline goes from Russia to Germany, but BYPASSES Ukraine. It turns out this wasn’t such a great thing with the emergence of the Ukraine/Russia tensions. The bypass causes Ukraine to lose 2 billion dollars worth of transport fees. This benefits Germany and Russia, who can spend less on transport, but is detrimental towards Ukraine. With Ukraine under pressure of attack, extra money would be helpful. Ukraine having transport fees might’ve also been able to dampen the financial gain that Russia benefits from. Perhaps someone who specializes in the transportation if natural gas and the economics behind it could look into a way of adding Ukraine somewhere along the pipeline. Would Ukraine benefiting be able to offset the benefit Russia would get otherwise? If this could be a solution, perhaps the pipeline could operate. Or, maybe adding Ukraine would make things worse. Its an option that could be explored further. https://www.aljazeera.com/amp/news/2022/2/23/nord-stream-2-halted-what-you-should-know
After reading the Reuters article, I’m impressed. The UN, US, and Germany seem to be working together. There is a realization that allowing the Nord Stream 2 Pipeline will make Russia stronger, and make everyone else in Europe, including Ukraine, weaker. They don’t want the dependency on Russia’s gas line and are willing to explore other more expensive options just to avoid giving Russia their business. https://www.reuters.com/business/energy/germanys-scholz-halts-nord-stream-2-certification-2022-02-22/
On February 12, 2022, thousands of people gathered in Kyiv to show unity against Russia. They held signs saying "Ukrainians will resist," while others carried signs saying "war is not the answer." Many other protests have also arisen in other countries. For example, yesterday in Berlin, Germany, there was a protest in unity for Ukraine.
When discussing the current tensions internationally, I think it's interesting to consider what an invasion of Ukraine would mean according to International law and central norms. Article 3 of Resolution 3314, adopted by the UN General Assembly in 1974, defines aggression (in short) as the invasion by armed forces of a State or military occupation resulting from such invasion or annexation by using force of another State or part thereof. According to the UN General Assembly, based on this standard, Russia invading Ukraine would be an illegal act of aggression. With this being said UN Security Council has met to discuss the Ukraine-Russian tensions.
https://www.aljazeera.com/opinions/2022/2/17/a-russian-invasion-of-ukraine-would-be-an-international-crime
As I had mentioned in an earlier comment, there are possibilities for further sanctions imposed by the US, the Biden Administration had just announced they will be placing further sanctions on the Nord Stream 2 pipeline. I can only imagine this will further hurt Russia, along with the possibility that Germany may be paying some sort of price. https://www.reuters.com/business/energy/us-plans-sanctions-company-building-russias-nord-stream-2-pipeline-cnn-2022-02-23/
Putin is threatening a "Strong Response" to the sanctions placed on Russia by the US. If Russia is to react strongly to US sanctions, what will be the outcome for US citizens? The US does not heavily rely on Russian oil and gas like Europe. Putin has given no response as to what his response might be, but if it causes the American citizens financial hardship, there may be a much more pressing issue on Biden's hands. The US is divided, and there are many people that are angry over COVID-19 related mandates and economic struggle. Adding more financial difficulty could cause more unrest in the US. In the past few years, we have seen violence caused by a divide in US politics. If more economic struggle is added to this already difficult situation, we may need to start planning for how the people in the United States are going to react.
https://www.themoscowtimes.com/2022/02/23/russia-promises-strong-response-to-us
https://www.themoscowtimes.com/2022/02/23/us-sanctions-russia-for-beginning-inv
While there have not been any protests over the major increase in the cost of energy as of right now, there is definitely historical, and recent precedent for it in Europe. While there were many societal factors that led to 2018's yellow vest movement, the tax on fuel that led to major increases in gas prices was one of them. People's businesses are struggling because of the pandemic and the added expense that the Nord Stream 2 freeze creates for the German people could lead to people losing their jobs and protesting the cost of living. When people are pushed to their limits and have few options, it can lead to crimes of necessity. Over 100 people were arrested during the yellow vest movement, how many people will be arrested in energy protests to come? How will the European corrections system handle this potential issue?
https://www.nytimes.com/2022/02/21/business/europe-power-gas-bill.html
https://www.washingtonpost.com/world/europe/yellow-vest-anniversary-what-hap
Given the Biden Administration placed sanctions on Russia's defense banks, while it may hurt Russia, the Biden Administration also noted that further sanctions will be imposed if necessary, when tensions escalate. Given these statements, I could only imagine that further sanctions can be placed on other major banks in Russia, handicapping their financial system. Aside from that, I can see that Russia imports a lot of food, automobiles, and electronics, sanctions on those can be detrimental.
https://www.reuters.com/world/white-house-announce-fresh-sanctions-russia-over-ukraine-2022-02-22/
The ways in which Europeans are dealing with and have dealt with the energy shortages have varied. Prices for energy have been going up for years across Europe, and the ways people are combating high prices have been creative. From using wood-burning stoves to heat their houses to installing solar panels to take advantage of a free, natural source of energy, Europeans are trying many old and new methods to keep their lights on and house warm at a price they can afford. The energy shortage is not new to Europe, it has just been further strained by the Nord Stream 2 freeze.
https://www.nytimes.com/2022/02/21/business/europe-power-gas-bill.html
Looking historically, Russia has used European reliance on the NS1 pipeline through Ukraine during political disagreements. In 2006, they shut off the gas for a few days putting many countries in temporary energy shortages. In this case Russia has suggested hiking prices rather than disrupting supply, but things could quickly change. Shutting off NS1 would be especially crippling to both Ukraine and Germany, as it would cause price increases and shortages. However, it would also have a negative impact on Russia, as the country depends on the revenue from the gas exports.
https://www.pbs.org/newshour/world/a-historical-timeline-of-post-independence-ukraine
https://www.npr.org/2022/02/09/1079338002/russia-ukraine-europe-gas-nordstream2-energy
After years of warnings from the EU, Germany is now seeing the reality of the vulnerable position they are in with heavy reliance on Russian natural gas. With Germany using the halt of NS2 as a sanction against Russia, Russian officials have warned that in return prices of gas from the NS1 pipeline, which Germany still relies on, will increase. German officials are quickly looking into alternatives to avoid extreme inflation. The country is putting focus into emergency reserves of gas as well as renewable energy alternatives.
https://www.politico.eu/article/germany-russia-gas-ukraine-crisis-nord-stream/
One thing I found interesting is this opinion article that says sanctions on Russia does not work, almost doing more harm to the people imposing them than good. This is very interesting because we want to keep things diplomatic for the sake of maintaining peace, but either going to war or imposing sanctions come at incredible costs, even for households.
https://www.ft.com/content/3d5b851a-02eb-4bd6-b7a4-1cda74b108f5
It appears Germany and other nations are setting up a wide variety of sanctions across many of Russia’s exports. In coordination with the halt of NS2, the state of Bavaria has announced they will not be going forward with producing Russian COVID-19 vaccine, Sputnik, in German facilities. The deal for production, first negotiated in April of last year, had not yet been officially signed, but was set to produce 10 million vaccines monthly going forward.
https://www.reuters.com/business/healthcare-pharmaceuticals/bavaria-freezes-sputnik-v-production-germany-citing-sanctions-against-russia-2022-02-23/
After reading this article, I see a possible connection to the new German Coalition Deal signed on December 07, 2021. German Chancellor Olaj Scholz’s decision to effectively halt the Nord Stream 2 Baltic Sea Gas pipeline project seems to go, in part, with the new policies and plans discussed in the Coalition Deal. Germany appears to be more focused on becoming economically independent and bolstering its foreign policy following the signing of this new Coalition Deal. Thus, despite the negative economic impact Chancellor Scholz’s decision will have on Germany in the short term, the decision may not come as a massive surprise. The article below explains the Coalition Deal and its implications on the German economy and infrastructure.
https://www.fitchratings.com/research/sovereigns/german-coalition-deal-broadly-consistent-with-our-expectations-16-12-2021
Some background knowledge on the Russia/Germany natural gas relationship. Russia has been sending natural gas to Germany for decades and it has strengthened the relationship between the countries. However, things are changing. As Russia has been sending less natural gas to Germany, prices have skyrocketed. This has forced Germany to look elsewhere for resources. Liquified Natural Gas terminals exist in Europe, but not Germany is looking to build it’s own terminal on the northern coast. The counties natural gas reserves are depleting, which is a huge problem considering that 27% of Germany’s energy consumption is from natural gas, and that percentage is increasing. Roughly two thirds of the natural gas used comes from Russia, thus creating this massive energy crisis.
https://www.nytimes.com/2022/02/14/world/europe/germany-energy-russia-gas-pipeline.html