Controversial Russian gas pipeline makes Czech progress

Illustrative photo: btr, Wikimedia CC BY-SA 2.5

One of the most controversial pieces of energy infrastructure in Europe, a new gas pipeline linking Russia and Germany, appears to be making progress in the Czech Republic. Prague has been in an awkward diplomatic spot over the proposed pipeline which is supported by Germany but vigorously opposed by Poland, Slovakia, and Baltic States.

Major Russian gas pipelines to Europe,  photo: Samuel Bailey,  CC BY 3.0
The Nord Stream 2 pipeline under the Baltic Sea, bringing more Russian gas to Germany and the rest of Europe and avoiding existing pipeline across Poland and through Slovakia and Ukraine, has been a diplomatic hot potato for the Czech Republic. It has put Prague in the middle between its biggest trading partner, investor, and the EU’s main motor, Germany, and some of its traditional regional friends and allies.

And it has not been an easy or comfortable position to be in. That was highlighted in the past when former Czech industry and trade minister Jan Mládek had to perform diplomatic somersaults after first supporting the pipeline and then finding himself forced back to a more balanced position mixing support and criticism. That stance has been maintained up till now.

Jakub Janda is a member of the Prague-based European Values think tank which supports Czech security and Central Europe and strong links with Western Europe. He outlined what he perceives to be the Czech official position so far:

ʺIt looks like the Czech government position on Nord Stream 2 has been, I would say, hesitant. So it has not been critical as in other Central and Eastern European countries. It practically means that there were several critical letters signed by Central European prime ministers or ministers while the Czech Republic has joined only one of them. But in practical terms the Czech Republic is not opposing heavily the Nord Stream 2 build-up.ʺ

ʺThe Czech Republic is basically now supporting Nord Stream 2 regardless of what our allies in the region say.ʺ

The Czech foreign ministry when asked for its position pointed to a declaration in 2016 by the then prime minister Bohuslav Sobotka when he joined other regional leaders in dispatching a letter to the European Commission president, Jean-Claude Juncker. It was a fairly modest missive compared with some others, demanding that if Nord Stream 2 did go ahead then that it be in accord with EU law.

For many months afterwards European lawyers looked at whether EU laws and energy rules could apply to the pipeline. An opinion this month from the European Council’s legal service suggest that EU law does not apply to the undersea pipeline in what is seen as a blow to Nord Stream 2 opponents.

Janda says he believes local energy companies have made a lot of the running in shaping the current Czech stand and elaborated further:

Jakub Janda,  photo: archive of European Values
ʺI think the Czech Republic is trying to be somewhere in the middle, not to be visible as a big opponent. There is no political leadership in the Czech Republic which would understand that this whole concern of our allies in Central and Eastern Europe should be out concern as well. So unfortunately now the Czech Republic is basically now supporting Nord Stream 2 regardless of what our allies in the region say.ʺ

And as well as putting strains between Prague and notably Warsaw and Bratislava, it has also contributed to souring relations further between Poland and Germany and clouded those between Berlin and Bratislava.

ʺThey [Poland, Slovakia and other Nord Stream opponents] are saying basically saying that if you speak about solidarity, for example in the migration issue, you are not taking solidarity in any way seriously in this energy sector if you are supporting Nord Stream 2. This is a big clash between Central and East European countries and the German political establishment.ʺ

But as often in such cases involving money and investments, action can speak louder than words, especially when they are couched in diplomatic ambiguity. And the main Czech gas pipeline company NET4GAS this week confirmed that it has plans to build an entirely new 150 kilometre stretch of gas pipeline across the north-western corner of the country. The estimated 13 billion crown project would shadow the path of the existing path of the Czech Gazela pipeline. That already connects with a German pipeline transporting gas from the existing Nord Stream 1 connection for Russian gas on the German coast and moves it south to some of it main consumers in the rest of Germany and southern Germany. It would link up with another new German pipeline taking the Nord Stream 2 gas onwards. While NET4GAS don’t like to describe this as a Nord Stream 2 link, this is clearly what it is. Other gas providers though will be able to access the new pipeline.

They add that gas particles don’t need passports and should be allowed to travel freely.

Some in the Czech energy sector are less cautious about hiding their support for Nord Stream 2. At a recent Prague energy conference, the chairman of the Czech energy regulator, the Energy Regulatory Office, Vladimír Outrata, came out fully in support of the new pipeline project. Outrata’s argument is that the new Russian pipeline can massively expand the amount of gas being shipped across Czech territory, possibly around 40 billion cubic metres a year much of it heading towards Italy. That’s more than the amount of natural gas currently being shipped through the country annually to an onward destination. Such sizable shipments could massively increasing local earnings from the transport charges for such business and help further establish the Czech Republic as a strategic gas transport country and hub.

And he hopes that the hitherto Czech hesitance in supporting Nord Stream 2 might evaporate soon with a more enthusiastic official posture bringing rewards diplomatic and economic rewards. Czechs, he argues should be supporting Czech interests not Polish.

Illustrative photo: btr,  CC BY-SA 2.5
There are others in Czech government circles who argue that the whole pipeline argument has been exaggerated. According to such arguments one more pipeline, whether it be Nord Stream 2 or another, adds up to diversification of supply routes, something that Europe is supposed to be encouraging. They add that gas particles don’t need passports and should be allowed to travel freely. Only around 5 percent of current Czech gas supplies are shipped through gas pipelines through Ukraine and Slovakia. And they point out that alternative sourcing gas supplies, such as the liquefied natural gas from the United States which Poland is looking to import, will be more expensive.

European Values’ Janda though argues that there are basic concerns about the new pipeline:

ʺI think there are two major concerns about North Stream 2. Basically, number one is that Nord Stream 2 will increase mainly German dependency on Russian energy. This is concern number one, which actually does go against the principles which are now the official policies of the European Energy Union. The second concern, which has been articulated for example by some of the Balkan intelligence agencies, is that North Stream 2 can actually provide means for strategic corruption.ʺ

ʺThis is a big clash between Central and East European countries and the German political establishment.ʺ

Janda highlights existing top political links between former German chancellor Gerhardt Schroeder and Russian state dominated gas company Gazprom and suggests that reinforced links could compromise Berlin even more.

Nord Stream 2 is backed by Gazprom with five West European energy firms helping to finance the 1,225 kilometre project to carry 55 billion cubic meters of gas per year. These are German energy groups Uniper and Wintershall, Anglo-Dutch group Shell, Austria’s OMV and France’s Engie.