One of the most audacious crimes of the 21st century remains unsolved. A bit more than a year ago, a series of underwater explosions wrecked the twin pipelines built to carry enormous volumes of natural gas from Russia to Germany. There is no doubt they were masterful acts of sabotage and coverup. The culprits remain unknown, though there are plenty of suspects.
What is known is that the attack has turned the German energy market on its head. Twenty months after Russia invaded Ukraine, Europe’s biggest economy and industrial power is still reeling from energy shortages, to the point that it is reopening mothballed coal plants ahead of winter to keep the lights on. Before the invasion, Germany was powered by scads of cheap and allegedly reliable Russian gas. But no longer.
The Nord Stream 1 and 2 pipelines are majority-owned by Kremlin-controlled gas giant Gazprom. Nord Stream 1, which opened in 2011, was Germany’s single biggest source of imported gas (before the war, Russia supplied some 40 per cent of all the gas imported by the European Union). Russia shut the pipeline down in August, 2022, officially for maintenance reasons, though there is no doubt Russian President Vladimir Putin was turning energy into a weapon. It worked. Switching off the pipeline sent gas prices soaring, to the point that thousands of energy-intensive businesses in Germany shut their doors.
The newer Nord Stream 2, which runs in parallel, was ready to go just before the war started. German Chancellor Olaf Scholz, under pressure from the West to deprive Russia of export earnings as Russian troops and armour amassed on the border with Ukraine, refused to certify the pipeline for operation.
The pipeline explosions on Sept. 26, 2022, turned the Baltic Sea near the blasts into a boiling cauldron, as methane gas billowed to the surface. Within hours of the attack, Sweden and Denmark, the two countries closest to the ruptured pipelines, called the blasts acts of sabotage. Later, so did the United States and Russia. Who did it and why? The attacks were likened to an Agatha Christie mystery, with several suspects thought to have motives.
Five months after the sabotage, veteran U.S. investigative journalist Seymour Hersh laid the blame squarely on the Americans themselves. Citing a single unnamed source (as is his style) in his Substack post, he said the CIA was behind the plot, was assisted by Norway, and that U.S. President Joe Biden approved the pipelines’ destruction. Indeed, Mr. Biden seemed intent on making sure Nord Stream 2 would never deliver gas to Germany. At a news conference three weeks before the invasion, he said, “If Russia invades … then there will no longer be a Nord Stream 2. We will bring an end to it. I promise you, we’ll be able to do it.”
Mr. Hersh’s reporting received little attention in the U.S. media and was dismissed as risible by some skeptics. Never mind that several other investigative stories later in the year, on both sides of the Atlantic, named no first-hand sources when they raised alternative scenarios.
Chief among them was that a Ukrainian group used a rented 15-metre sailing yacht called the Andromeda to plant the explosives on the pipelines at depths of 70 to 80 metres – theoretically within the range of expert divers. In July, Germany told the United Nations Security Council in a letter that it had found traces of subsea explosives in samples taken from the yacht. “It is suspected that the boat in question may have been used to transport the explosives that exploded at the Nord Stream 1 and Nord Stream 2 pipelines,” the German investigators wrote.
The identities of those who rented and crewed the yacht are not known, nor whether the White House or the inner circle of Ukrainian President Volodymyr Zelensky were aware of any yacht plot. A year after the explosions, investigations by Germany, Sweden and Denmark have yet to reveal anything conclusive, and the Americans have gone remarkably quiet in their questioning. No arrests have been made in connection with the sabotage. Meanwhile, there has been little suggestion that Moscow was behind the attack on infrastructure that it owned. Russia failed to win support at the UN Security Council for an independent investigation.
It seems the culprits will not be found soon. What is clear is that the destruction of the pipelines has played a huge role in overhauling the German and European energy markets at amazing speed – at huge economic cost.
The most obvious change is that Russia is no longer the prime supplier of imported gas to the EU. The U.S. is happily filling much of the gap. American exports of liquefied natural gas (LNG) almost tripled last year to 56 billion cubic metres. The EU is paying dearly for the energy. Reportedly, U.S. LNG last year cost about 40 per cent more than Russian pipeline gas, though the price has since fallen somewhat. Germany is busy building LNG terminals – it had none before the war.
The era of cheap energy in Germany is certainly over. Russian gas is almost all gone, more expensive imports from elsewhere are in, and Berlin earlier this year made good on its incomprehensible promise to close the last of its nuclear power plants. Coal burners are back in vogue. The high energy prices have punished German growth, making it the worst performer among the big developed economies. Both the EU and the International Monetary Fund expect the German economy to shrink this year.
Germany is its own worst enemy. Making itself overly reliant on Russian gas and expecting Moscow to be a reliable supplier of cheap fuel forever was a grave mistake. The only winners are the Americans, who are no doubt delighted about the Nord Stream pipelines’ status as Russian relics on the seabed.