Your humble blogger is supposed to be on vacation in Maine. The “in Maine” part is holding up, but I felt compelled to make a remark about the Nord Stream pipeline attacks and perhaps more important give readers the opportunity to weigh in on the latest developments.
Since the “whodunit?” part has been well covered in Links and comments, I thought I would do a very high level recap and then move to what the Russian response might be.
We admittedly do not have much in the way of information about the leaks, which are now up to four, two in Sweden’s economic zone, two in Denmark’s. An investigation is promised. But normally even-handed commentators are skeptical about how thorough and transparent they will be:
https://t.co/XPHG2wOLpX Yes, Jake Sullivan is supporting efforts to investigate the "apparent sabotage" of the Nord Stream pipelines, much as OJ Simpson promised to help locate the killer (who is still out there!) of Nicole Simpson and Ron Goldman.
— Marshall Auerback (@Mauerback) September 29, 2022
It’s already widely believed that the explosions were the doing of a state actor. On top of that, the area of the attack was heavily monitored by both Sweden and Denmark, and the Baltic generally is also well surveilled…by NATO members. And as many have pointed out, on top of Russia having at best limited opportunity, it lacks apparent motive.
Notably, today, even the staunchly pro-West Radio Free Europe published: NATO, EU Say Gas Pipeline Leaks Are ‘Sabotage’ But Stop Short Of Pointing Finger At Russia.
By contrast, the former diplomat M. K. Bhadrakumar pointed out yesterday:
The German security services are of the opinion that only a state actor could have damaged the undersea pipeline, suggesting “divers or a mini-submarine” could have installed mines or explosives on the pipeline. When asked to comment, the US Secretary of State Antony Blinken was non-committal saying “these are initial reports (of sabotage) and we haven’t confirmed them yet. But if it is confirmed, that’s clearly in no one’s interest.”…
Principally, Russia loses whatever leverage it has over German policies at a juncture when a grave economic crisis looms ahead and there is growing demand to review Berlin’s decision against the commissioning of Nord Stream 2. Last week, large demonstrations took place in Germany calling for the commissioning of Nord Stream 2 to resolve energy shortage.
As for the German leadership, it too no longer has an option to bite the bullet and seek resumption of Russian gas supplies (except by begging Poland and Ukraine to cooperate in the reopening of the Yamal and Druzhba pipelines.) On the other hand, Chancellor Scholz’s trip to the Gulf region (Saudi Arabia, the UAE and Qatar) last weekend seeking more oil supplies failed to produce the results he had hoped for….
From another perspective, the Nord Stream pipelines have been disabled at a defining moment in the Ukraine conflict when a lull is expected through the fall until December. Conceivably, this presents a small window of opportunity for dialogue with Moscow. There are rumours that Scholz’s Gulf tour also aimed at seeking help from Saudi Crown Prince Mohammed bin Salman who has excellent relations with Russian President Vladimir Putin….
Therefore, whoever struck Nord Stream struck had a perfect sense of timing. This dastardly act is state-sponsored and it only highlights that there are powerful forces in the West who want the conflict to prolong and will go the whole hog, no matter what it takes, to smother any incipient stirrings that aspire for ceasefire and dialogue.
Global Times, the English-language official organ for China, in a plausibly deniable manner, pointed a finger at the US:
The anonymous expert said that Russia has no reason to destroy the infrastructure and throw away its own bargaining chips in managing the energy crisis, and that basic logic suggests that whoever benefits most from the current situation is most likely to have carried out, or at least maneuvered, the sabotage.
If the US is behind it, Washington could bind Europe, particularly Germany, closer to confront Russia, and American energy giants could earn enormous amounts as Europe’s alternative source of gas purchases, the expert said.
Note also that the suspension of the ability of Germany to get Russian gas Nord Stream 1 or as Russia clearly preferred, Nord Stream 2, for at least months has come when Europe’s energy luck has turned against it. From Interfax:
Europe’s current temperatures are reaching all-time lows for the month of September, and could be the coldest for the past nine years at more than two degrees below last year’s figure. The forecast in Europe until the end of the month is light winds or calm weather.
Another cold spell has begun in Europe, and it should last at least a couple of days.
Electricity generated from wind power has dropped for the second consecutive day. Wind turbines generated 22.8% of the European Union’s energy balance on Monday, falling to 13.6% on Wednesday. Meantime, the figure is only 6.8% in Germany and 3.3% in the Netherlands, according to data from the WindEurope association. The average for September 2021 was 9.6%.
The weather picture is clearly a bigger deal than short-term wind power shortfalls but the latter is certainly unhelpful.
It is too early to tell how widespread Bhadrakumar’s and the Global Times expert’s point of view are in India, China, and the Global South generally.
But if this view were to become conventional wisdom, it would lead to great alarm and distrust towards the US. It would mean, as Michael Hudson argued early on, that the US was willing to inflict severe and lasting economic damage on an important ally and harm the health and welfare of its citizens. This would be an appalling betrayal as well as compelling evidence of the lengths to which the US was willing to go to try to keep its status as the global hegemon. Alexander Mercouris was not exaggerating to depict this scenario as “nihilistic” But he also pointed out that unlike past US Administrations, it was not inconceivable for Team Biden, which has been exceptionally belligerent and reckless.
And it’s not as if there’s would even be very good long-term payoff. The military industrial complex was already all in. The US can’t produce enough LNG surplus to its needs to make up for the European loss of Russian gas, which was already greatly reduced due to the reduced shipments through Nord Stream 1 and Ukraine suspending deliveries though another pipeline. OilPrice noted last week: Russia’s Gas Exports To Europe Drop By 82% In A Year. De-industrializing Germany (which includes reduced output of ammonia, a key input for most chemical fertilizers) will impoverish Europe. Broke customers do not make for good customers.
And that’s before we get to supply chain damage and the rising odds of a financial crisis, with far too many possible triggers. With the dollar continuing to levitate, emerging economy debt crises look baked in. It’s pretty hard to see how the contagion would not reach the US.
Mind you, some argue that it’s inconceivable that the US led or helped enable the attacks:
It's ridiculous to imagine the U.S. blew up the Nord Stream pipelines. The U.S. national security and diplomatic establishment is insanely deferential to Germany, they would never consider doing it. Biden personally admires Merkel.
— Matt Stoller (@matthewstoller) September 29, 2022
Nevertheless, in a phone talk with Erdogan today, Putin depicted the attacks as “international terrorism” and said Russia was going to make a stink at the UN Security Council. Frankly, I’m surprised Russia hadn’t played that card sooner but perhaps it needed to make a preliminary assessment of damage and talk to key allies privately first.
There’s no readout for the call yet on the English language Kremlin site, so for now, we turn to TASS:
The unprecedented sabotage against Nord Streams was in fact an act of international terrorism, Russian President Vladimir Putin said on Thursday in a telephone conversation with his Turkish counterpart Recep Tayyip Erdogan, the Kremlin press service reported after the leaders’ conversation.
“The Russian president gave a principled assessment of the unprecedented sabotage, which is in fact an act of international terrorism against the main gas pipelines Nord Stream 1 and Nord Stream 2. It was noted that Russia is bringing this issue up for urgent discussion in the UN Security Council,” the statement reads.
Given that Russia has unsurprisingly taken the position that it was the victim, and not a perp, in the Nord Stream attacks, one wonders what it will do next. It can’t afford not to respond to this level of infrastructure destruction and undermining of a possible path to resolution of the war.
Putin will be making a substantial address at 15:00 Moscow time tomorrow upon the signing of the treaties with the four territories to admit them to the Russian Federation. No doubt he will Say Something about l’affaire Nord Streams.
Tucker Carlson pointed out that Russia could cut underseas fiber optic cables between the US and Europe, which would crash financial markets and a lot of commercial activity. That sort of apocalyptic act is out of character with the measured responses Russia has made so far to Western sanctions.
Russia already has a military plan of sorts for at least the near term set in connection with its partial mobilization. While Russia can engage in targeted missile strikes in addition to that, Russia now faces the new issue of what to do about attacks that more and more look not to be the doing of Ukraine (remember Ukraine has been begging like crazy for all sorts of US/NATO military support).
Russia has threatened to strike the real decision centers, which means the Western moving forces, in the event of an attack on Russia. It did not do so in response to the comparatively minor shellings of Belgorod and the PR-worthy but not terribly impactful attacks on Crimea. The hawks in Russia will no doubt depict the Nord Stream attacks as the result of Russia not responding forcefully to earlier hits on Russia territory.
IMHO even though the pipeline sabotage was a kinetic attack, the impact was diplomatic and economic. The most surgical response Russia has is turning up the sanctions pain dial. But Russia has chosen to hew to the position that economic sanctions must be approved by the UN.
Russia can walk through the door opened by the US via the G7 oil price cap threat by stopping sales to the G7 and any other cap adoptees, and moving up the end of sales from when the cap was supposed to start to some earlier date, in response to the pipeline destruction.
The US is still planing to implement that, and Congress is working to pass legislation requiring the US to impose secondary sanctions on countries that didn’t adopt the price limit. The Biden Administration is opposed to the plan but the Wall Street Journal makes it sound as if key Congresscritters have the bit in their teeth. It could and almost assuredly will act on its threat to withhold Russian oil from the US and EU. The EU keeps threatening to sanction it anyhow, so this move would also give Ursula von der Leyen what she wants. The Saudis would almost certainly not fully fill the gap, since they don’t want the West interfering with OPEC perogatives.
The wee problem is that markedly higher oil prices hurt Russia allies too. My understanding is Russia has been discounting oil on a percentage of market basis, as opposed to absolute price level. How would Russia ameliorate the damage to China, India, and the Global South if oil spiked to $180 a barrel or higher? Or would it just rely on pinning that tail on the G7 donkey?
Russia could also employ the countersanctions framework (“special retaliatory economic measures”) it devised in connection with Germany’s seizure of Gazprom Germania assets. But to fit this legalistic approach, Russia would need to present evidence supporting who it had targeted, if nothing else to play to its allies. And what might the measure be? Cutting off supplies of critical materials like aluminum, copper, tungsten and platinum?
Russia finally has the problem that even if it can fix its preferred pipeline, Nord Stream 2, sooner rather that later, it would be vulnerable to a new attack. How could it prevent that?
Again, we’ll know more via Putin’s speech, likely not a definitive response but a sense of direction.