Why Nord Stream 2 Is Needed

The title of the article is not at all designed to start a discussion with sectarians who say “no one needs this gas” and “it would be better to distribute the money to citizens”. This is for those like Navalny, Krutikhin, Kungurov, “El Murid”, and other persons who are not burdened with responsibility for their words and, even more so, for deeds that do not exist in principle.

Nevertheless, although not for discussion, but, as the latest hyped options, they will be suitable for reasoning.

So, a self-respecting state with a population of 145 million, considering itself in the perspective of more than one century, has no right to think in such categories and can not afford any extremes.

The Nord Stream 2 gas pipeline is just one of a large number of projects being implemented in Russia: energy, infrastructure, production, defence, cultural, scientific, and so on. Not all of them are visible, because not all have faced such public opposition, which indicates that it is very necessary to bring Nord Stream 2 to the finish line.

Judge for yourself.

Why did Nord Stream 2 suddenly become “useless”? Because at the moment gas consumption in Europe fell? Because there was a warm winter, and then a pandemic that almost stopped consumption altogether? And what – winter has turned into summer forever, and the quarantine is now forever? This is the poor logic of flawed people. According to this logic, a large country does not need any major projects at all.

But there is another logic: a country like Russia, especially after the desolation of the 90s, needs a lot of different projects, designed not for short-term margins, but for decades to come. The state of affairs is a volatile lady, today she has one mood, tomorrow another, and her tastes are the level of a young high school student who dreams of getting married successfully.

Any business project, even a small one, has a payback period of 3-5 years, not to mention one with the scale of a continent, where the implementation of the project alone takes years, and sometimes decades. Infrastructure projects generally do not lend themselves to the logic of payback. This is an equation with an infinite number of unknowns and all the results are indirect.

In Russia, dozens (in fact, hundreds) of projects similar to Nord Stream 2 in scale are being implemented simultaneously. Well, let’s say Nord Stream 2 is a strategic mistake and the pipe from Yamal did not need to go into the sea in the direction of Germany.

Let’s count. The cost of laying on the bottom of the Baltic sea is known – €9.5 billion, of which Gazprom accounts for 50% – €4.75 billion, and in rubles at the current exchange rate – 375 billion rubles. Let’s say we take this “bundle” of money and distribute it to “all the sisters with earrings”. As a result, each Russian gets 2,500 rubles! What is this in general about?

However, if you do not invest, for example, in a dozen similar projects, the amount in your pocket already increases by an order of magnitude. But where will it come from for a state that does nothing? This is an open question.

But we, nevertheless, go further: what if we don’t invest in hundreds of projects on a scale similar to Nord Stream 2? Need a calculator? Hint: 2.500*100=₽250,000 in everyone’s pocket. It’s suitable?

Well, that’s good, we are all much richer, but not for long, although long enough for the populists.

And now I will answer an unvoiced question: what hundreds of projects are we talking about?

There is no open secret here. Here are the lists of more than 1000 major projects from 2000 to 2024, most of which have already been implemented, some are under implementation, and some are under development.

The list was compiled at the beginning of 2018, so it clearly requires significant additions, because there are already projects with an implementation timeframe up to 2030 and beyond. At the same time, 100-200 from the list are projects that significantly exceed the scale of Nord Stream 2. Of course, not all of them 100% meet expectations, but this is normal, because real life is not populist nonsense aimed at short-term hype and ovation of fans, but a strategic vision of the need for broad diversification and comprehensive development of a huge country, where there are still a lot of places that are in disrepair. So, there is enough work for more than one generation.

One last thing: about the “Nord streams” and their feasibility.

The capacity of the two Nord streams is 110 billion cubic meters of gas per year. This is more than twice less than the volume for which the gas transit system of Ukraine is designed. But there are two well-known nuances:

  • Ukraine, from a political point of view, is an extremely unreliable transit country;
  • The Ukrainian gas transit system has not been reconstructed since independence, which has long raised the question of its unreliability from a technical point of view.

Thus, an answer to the question of reducing gas consumption in Europe was obtained: Yes, it’s possible, but it’s better when it’s less, when it’s better — without unpredictable transit payments, without ultimatum manipulations, and without risks (political and technological). After 4 years, the contract for gas supplies through the Ukrainian gas transit system will end and, unfortunately – “Davay, do svidaniya” – a grand soviet project, which was abandoned by Ukraine itself.

And if we talk about competition with American LNG, there isn’t one in principle. But there is an obvious attempt to make everyone bend over at once and milk them for money — the usual overseas technology of persuasion through sanctions and the 6th fleet. But history shows that it can be healed. For a large country, a year or two is no time at all, and if there will be need, we can wait even longer.

Aleksandr Dubrovsky

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