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  October 25th, 2022 | Written by

Europe’s Impending Winter Further Complicated with Nord Stream Potential Sabotage

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On Tuesday Nord Stream pipelines 1 and 2 were hit with explosions and leakages. It is unclear who or what is responsible at the moment but that has not stopped widespread speculation. Prime Minister Mateusz Morawiecki of Poland is blaming Russia while the Kremlin is hinting that the US is to blame. 

Nord Stream 2 has never been operative and Nord Stream 1 has remained dormant since August. Yet, it is the location of the explosions – near the path of the Baltic Pipe project – that is most concerning. The Baltic Pipe project is a new transmission line that will bring Norwegian gas to Poland and its neighbors. Analysts assert it is more than coincidental that both Russian gas pipelines are hit just before the Baltic Pipe project is slated to open.

Since the Russian invasion of Ukraine Norway has been boosting its gas exports to the broader European market. With the Baltic Pipe project, this would only increase, something potentially irksome for the Kremlin. Historically Norway has been a problem for Russia. A key NATO member, Norway controls access routes to Russian commercial and naval ports. With Finland and Sweden now joining NATO, the military build-up on the northern Russian border could be significant. 

Before the explosions, Norway reported unknown drone activity near offshore gas and oil infrastructure. Nord Stream AG, the consortium that operates the pipelines, indicates the damage is unprecedented. The Nord Stream 2 leak was reported on Monday in the Danish section of the Baltic Sea. A navigational warning followed prohibiting the entry of all ships within five nautical miles. The Nord Stream 1 leaks came soon thereafter – the first in the Danish economic zone and the second in the Swedish economic zone. Engineers are quick to point out that the natural breakage of gas pipelines is very rare. 

The escaped gas is nearly entirely methane. Environmental groups are concerned about the impact as according to United Nations data methane is 82.5 times worse than carbon dioxide for the climate. Natural gas prices understandably increased post explosions. The euro fell to a multidecade low (against the dollar) and investors sold off a considerable amount of European stocks shortly thereafter. 

Eurozone countries had reduced their dependency on Russian gas to just under 10%. Compare this with a 40% reliance in the winter of 2021 and that is a consequential shift. Many European countries have also done a reasonable job in stockpiling gas storage reserves ahead of what will undoubtedly be a challenging winter. The coming weeks will hopefully reveal the cause/culprit behind the explosions. If it was intentional this will be a signal that the Baltic Pipe project is a vulnerable target.