Nord Stream 2 and Polish Coal Dust

Nord Stream 2 and Polish Coal Dust

The Nord Stream 2 project will help to both reallocate the gas-supply routes into Europe as well as implement the Paris Agreement on climate. Such was the stated opinion of Russian Foreign Minister Sergey Lavrov in Yekaterinburg, at the opening of the Russian-German summer program, «Paths of Development for the Energy Sector. Current Challenges», which he was attending along with his German counterpart Frank-Walter Steinmeier. «We are convinced, just like our European partners who are developing this project together with Gazprom, that it will help diversify gas routes into the European market and that overall it fits in with the program that exists within the EU to develop Europe’s gas infrastructure, while being consistent with the EU’s main goal of creating an energy union and a single, open gas market in Europe», emphasized the Russian minister. He claims that the realization of the project «will help further the implementation of the agreements that were reached at the Paris Conference on climate in terms of reducing emissions».

For his part, Frank-Walter Steinmeier spoke out against the politicization of the Nord Stream 2 project, calling for action «at the corporate level»: «This issue must be resolved by Gazprom and European companies – politics have nothing to do with it». 

Looking past the diplomatic wording, it is clear that both ministers were primarily addressing Poland. Currently Warsaw is doing everything it can to block the implementation of the Nord Stream 2 project, reprising approximately the same role played by Bulgaria in its attempts to thwart South Stream. The Bulgarian government, however, simply refused to green-light the project, deferring to the position of the European Commission, but the Poles are proceeding with more subtlety. In particular, Poland’s anti-monopoly watchdog, UOKiK, announced its objections to the shareholders’ plan to create a Nord Stream 2 consortium only in late July, despite the fact that the application to establish the joint venture was filed in December 2015. That application was signed by representatives from Gazprom, E.ON Global Commodities SE, Engie SA, OMV Nord Stream II Holding AG, Shell Exploration and Production (LXXI) B. V., and Wintershall Nederland B. V. A decision should have been made on that by early 2016, but in February, the regulator took a six-month break, citing the need to seek the opinions of Polish gas companies. And they interpreted their cue correctly – alluding to the threat that Gazprom would monopolize the Polish market. This was despite the fact that the gas pipeline itself does not even pass through Poland.

Of course, UOKiK’s move can’t exactly derail the project all by itself. The stakeholders, aware of the political subtext behind the Poles’ actions, have already announced that they are rescinding their notice of the merger that they filed with the Polish anti-monopoly watchdog. But they have confirmed that they still consider the Nord Stream 2 project to be important for Europe’s energy matrix and intend to search on their own for ways to remain part of the project. The applicants’ decision to backpedal on their announcement will not affect the construction schedule of the Nord Stream 2 AG pipeline company.

Warsaw’s position looks all the more speculative because of the environmental problems that are worsening in Poland and which are caused by a serious energy imbalance in favor of coal. Fifty-five percent of the primary thermal energy that is processed in that country comes from coal, as does 75% of the electricity. Poland is the second-biggest coal producer in Europe (after Germany), ranking ninth in the world, and almost all the coal it mines is consumed domestically.

Such an energy matrix poses a threat to the environment not only in Poland itself, but in all of Europe. Polish law offers only very vague guidelines for preserving the country’s energy security. As Poland’s energy experts themselves acknowledge, energy from coal is hardly capable of ensuring energy security, since coal-fired power plants, cooled by water from rivers that are drying up, become ineffective – as do the transmission networks – when there is increased demand for electricity, not only in the winter but also in the summer.

Poland itself does not much like to advertise the fact that the European Union ranks Poland dead last in terms of compliance with the requirements of energy security, but it is so: in its December 2015 report, the European Network of Transmission System Operators (ENTSOE-E) suggests that Poland might have problems balancing capacity in the very near future, for various reasons.

Initially, Poland showed quite understandable interest in the Nord Stream 2 project and even expressed its readiness to link into that system in order to bring its own energy industry into balance. But then politics reared its head, and the official stance ended up being dictated in Brussels and Washington, not Warsaw. The Poles’ desire to keep playing the Ukrainian transit card was also a factor, which was intended to put pressure on Russia, as did their desire to exhibit their independence in relation to Germany (this is not the finest hour for Polish-German relations).

And Germany itself, which is also heavily dependent on coal power, has characteristically taken a far more sober view of the Nord Stream 2 project. The Frankfurter Allgemeine Zeitung has commented that «Europe is hurting itself by rejecting the Nord Stream 2 gas pipeline across the Baltic Sea». The newspaper writes that the argument that «the pipeline increases dependence on Russian gas» cannot be viewed as «the definitive conclusion». And as for the problems that come with having that gas travel across Ukraine – a state of affairs that Brussels and Warsaw would very much like to preserve – the Frankfurter Allgemeine Zeitung points out that «after a decade of negligence and rampant corruption in the gas business, Kiev is also to blame for this situation».

That’s quite true. But what can one do if the minds of Polish politicians are clogged with coal dust?

Tags: Nord Stream