Sabotage In The Baltic

As expected, evidence surrounding the underwater explosions along the Nord Stream 1 and 2 pipelines in the Baltic Sea on Monday is leaning towards sabotage as the cause. And just as predictably, fingers in Europe and Washington are instinctively pointing east towards Russia. Two explosions caused large leaks in both undersea natural gas pipelines. The Nord Stream pipelines originate in Russia.

Now experts are trying to decipher the meaning behind the attacks while energy and security officials in Europe are now forced to deal with the possibility of further attacks on fuel infrastructure sites. Retired senior German intelligence official Gerhard Schindler told German news channel Welt that Russia is the only real suspect behind the attack.  “An unnoticed, conspiratorial damage to pipelines at a depth of 80 meters in the Baltic Sea requires sophisticated technical and organizational capabilities that clearly point to a state actor. Only Russia can really be considered for this, especially since it stands to gain the most from this act of sabotage.”

What exactly can Moscow expect to gain from sabotaging its own natural gas pipelines, provided they are responsible? For starters, with Nordstream 1 now out of commission for an extended period because of the explosions, Europe is caught between two chairs. With winter approaching and concern about whether there will be sufficient energy supplies to get through the season, the eastern option is now completely off the table. This means that now European nations that are heavily dependent on Russian natural gas, especially Germany, have to find new energy sources to replace what was permanently lost following Monday’s explosions and leaks.

Despite official claims by Berlin that its natural gas stockpile is robust, German officials continue to seek new energy sources for the short term with increasing urgency. Perhaps the German government miscalculated the stockpile numbers and Germany really does not have anywhere near sufficient natural gas available. If this turns out to be the case, expect the blowback from it to be decidedly unpleasant around Europe and the rest of the world.

Central Asia Cools Down and a European Energy Update

  • Last week’s border clashes between Tajikistan and Kyrgyzstan have ended and a fragile ceasefire is in place. Both nations have agreed to withdraw considerable amounts of military hardware and troops from the disputed area of the Tajik-Kyrgyz border. The fighting that took place along the border between 14-16 September included tanks, aircraft, and artillery. Over 100 deaths were reported during the strife.

On Sunday, Russian President Vladimir Putin called for there to be “no further escalation” between Tajikistan and Kyrgyzstan. He also reached out to the leaders of both countries and urged them to take steps to resolve the border dispute through peaceful means. Although being members of the Collective Security Treaty Organization (CSTO) Tajikistan and Kyrgyzstan have a history of tensions accented by the occasional border clash.

“We continue our efforts to resolve the Kyrgyz-Tajik border issues in a purely peaceful way,”    Kyrgyz President Sadyr Japarov told his citizens in an address Monday. Tajik government officials spoke along similar lines, calling negotiations the key to resolving Tajik-Kyrgyz issues.

  • European government continue to make plans and preparations for an anticipated energy crunch this coming winter. Germany is moving promptly to secure LNG contracts with a number of Persian Gulf states as the flow of gas from Russia is running at severely reduced levels. Meanwhile, Spain and France are revising their respective contingency plans in the hope of avoiding power cuts.

French energy corporation EDF’s efforts to repair and reactivate a number of nuclear reactors is meeting delays. Corrosion has had more of an affect on the reactors and plants than originally thought. If the reactors cannot be brought back online by winter, EDF has warned it might be forced to take ‘exceptional measures’ once the weather turns.

Spain is looking at the possibility of requiring energy-intensive companies to cease operations during consumption peaks. Meanwhile, Finland’s national grid operator Fingrid is warning that Finns should be prepared for power outages come winter.

UN General Assembly Returns Next Week Amid Serious Challenges

With UN General Assembly set to get underway next week,  UN Secretary-General António Guterres acknowledges the glut of troubles facing the world at the moment. He described the state of the world as “A time of great peril.” Fair description considering the wars, economic crisis, poverty, climate chaos and other issues in play across the planet right now. The question is: What is the United Nations prepared to do about it?

Guterres is calling for cooperation from UN member-states, while acknowledging the global response to these crises has been weakened by a number of mitigating factors. In an interview with NPR, the secretary-general admitted that the supranational body’s ability to contend with matters such as the Ukraine-Russia War and the energy crisis now brewing in Europe is limited. More to the point, Guterres doesn’t expect UN efforts to result in progress to be made on many fronts.

This will be the first in-person General Assembly since 2019. During the COVID-19 pandemic and its aftermath many leaders attended remotely. 140 world leaders are expected to attend, a marked increase from 2021’s 80. There will be one exception granted though. Today, Ukrainian President Volodymir Zelenskiy was granted permission by the UN General Assembly to address the body via video link.

European Energy Concerns Deepen

For months European Union officials have claimed the Union should prepared if Russia decides to halt gas shipments to Europe indefinitely. However, Gazprom’s decision halt Nord Stream 1 deliveries, ostensibly due to needed turbine repairs, has shown the earlier EU confidence might’ve been premature. Energy markets are volatile right now with prices surging. If this was not bad enough, many European energy companies are facing margin calls at the worst possible time. Collateral cash is not available in the amounts needed, mainly owing to the volatility of energy markets, which has been sparked in-turn by the energy. The chips are down, and the red light is flashing on the continent as leaders and energy ministers try and come to terms with the crisis now staring directly at them.

Belgian Prime Minister Alexander De Croo warned today that swift action must be taken to prevent a broad economic shutdown continent-wide. “A few weeks like this and the European economy will just go into a full stop. Recovering from that is going to be much more complicated than intervening in gas markets today. The risk of that is de-industrialization and severe risk of fundamental social unrest.” De Croo made these comments in an interview with Bloomberg. Tomorrow 27 EU energy ministers will meet in Brussels to discuss a plan for intervention in European energy markets. As some analysts have said earlier this week, Europe is now facing a “Lehman Event” and swift intervention could be the only tool strong enough to stave off major disaster.

Even though European officials continue to claim gas storage supplies are sufficient enough to get EU nations through the winter, there’s increasing worry that if even one member-state must resort to blackouts and other energy restrictions it will create a domino-effect throughout the entire EU. Given the current state of energy in Europe this is a very possible prospect once winter sets in.

A Look Around Europe 6 September, 2022

Britain has a new prime minister, Gazprom is laying blame for Nord Stream 1’s maintenance issues on Siemens and the French president is imploring French citizens to cut energy usage by 10%. These are some of the events making news and shaping opinions around the continent today.

  • Boris Johnson’s successor has finally taken the reins of power in Great Britain. Liz Truss is now in charge and forming her government. Compared to Johnson, Truss seems almost demure, but when it comes to policy she’s a conservative firebrand. She comes to 10 Downing Street after spending less than a year as foreign secretary. During her tenure as foreign secretary, Russia invaded Ukraine. Truss was harshly criticized for a number of comments she made in the weeks leading up to the war and in the months since. Diplomatic faux pas’ more or less. Most of the criticism has come from the Russian government. Earlier today, Russian Foreign Minister Sergei Lavrov criticized the new British Prime Minister and said her reluctance to compromise will be of no help to Great Britain on the international stage. Time will tell if his words are correct.
  • A Gazprom senior executive stated today that pumping operations for the Nord Stream 1 pipeline will not resume until Siemens repairs or replaced faulty equipment. A turbine at Portovaya compressor station has developed an engine oil leak. Siemens claims the issue should not keep the pipeline closed. Gazprom and the Russian government appear to think otherwise. Winter is approaching and Europe is in the midst of its worst energy crisis. Germany claims the pipeline closure is the latest volley of actions and accusations between Moscow and Europe since the invasion of Ukraine.
  • France is adopting new steps as the energy crisis deepens. With energy prices surging, French President Emmanuel Macron announced Monday that his country will send natural gas to Germany if needed. In exchange, Germany will provide electricity to France if the need becomes necessary. Macron is also urging French citizens to reduce energy usage by ten percent during this crisis. Last Friday the French government announced that French electricity company EDF will restart all of its nuclear reactors by winter to help the nation through the worsening energy crisis.