Geopolitics

Some Thoughts on the Recent American Sabotage of Both NordStream Pipelines

As most of you have likely heard, both NordStream (NS) pipelines were sabotaged by underwater explosions in the past few days. NS1 was inactive at that that time because of a cat-and-mouse game between Russia and Germany surrounding issues related to repair and sanctions, while NS2 was never turned on because of American pressure on Germany. But as you will soon see, them being inactive at the time of sabotage has no real impact on the very significant down-stream consequences of this dumb move. But before we talk about the many bad consequences of this boneheaded move- let us talk about who likely did it and who did not. Of all parties involved in this pipeline drama, Russia has the least motive to blow up NS1 and NS2. Not only did they partially pay for building these two, but they were supposed to eventually replace the older above ground pipelines between Russia and Germany which transited through unfriendly countries such as Poland and Ukraine.

It is also no secret that successive American governments have wanted to stop Russia selling natural gas to western Europe- especially Germany, so that they could sell their own highly-expensive liquified LNG to them. This is also why Germany, for longest time, kept buying natural gas from Russia. See.. a large part of their ability to price their manufactured products competitively in global market comes down to the cost advantage of using very inexpensive and plentiful Russian natural gas. As some of you might also know, the rise of the environmental movement in Germany has caused it abandon other cheap sources of power such as nuclear and coal. It does not help that their over-500 billion Euro investment in “green” energy (mostly wind and solar) is not able to provide much power when necessary- especially during the winter and during peak hours. Long story short, Germany and many other west European countries are heavily dependent on inexpensive natural gas from Russia.

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Categories: Geopolitics

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