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26 July 2022

What do Russia’s Nord Stream 1 cuts mean for Europe’s gas supply?

Gazprom’s move to cut gas flows through the Nord Stream 1 pipeline threatens supplies ahead of the winter.

By Ido Vock

Editor’s note: This article was originally published on 18 July 2022 and has been updated in light of recent events. On 25 July, Russian state energy giant Gazprom announced it will cut gas flows through the Nord Stream 1 pipeline to Germany to just 20 per cent of maximum capacity. The limited flow will begin from Wednesday 27 July, Gazprom said, citing repairs of another turbine. The move has increased fears that Russia could halt the flow of gas to Europe completely.

Berlin is squirming. Gas deliveries from Russia to Germany dropped to zero last week after the Nord Stream 1 pipeline was closed for maintenance – works which were scheduled long before the war in Ukraine.

Officially, the state-owned Russian energy giant Gazprom says that the German company Siemens has failed to return a turbine it was having repaired in Canada which is needed for the deliveries to restart. Unofficially, Russia is dangling the prospect of a complete end to gas deliveries ahead of the winter, which would very likely cause a recession and certainly a freezing end of the year, as a test of how far the West’s support for Ukraine extends.

“I would be lying if I said I was not afraid of [Russian turning off the taps],” the German economy minister, Robert Habeck, told the broadcaster RTL.

[See also: Georgia is now a hub for Russian opposition in exile]

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Germany depends heavily on natural gas to power industry and heat homes. In December 2021, about a third of its supply came from Russia. The government says “protected customers” – including households, small businesses and essential services such as hospitals and schools – would be prioritised if energy had to be rationed. Natural gas reserves are just 65 per cent full. The government’s target is 90 per cent ahead of the winter: this will be difficult to meet if deliveries do not restart.

If flows to Germany stop, industry would be instructed to cut its energy use, much of which could not be replaced. This would be likely to have a disproportionate impact on the production of energy-intensive materials including chemicals and steel, with possible ripple effects throughout the German economy, Habeck warned. Analysts at UBS, the Swiss bank, expect a complete shutoff of flows to Germany would trigger a recession of almost 6 per cent, a greater fall than in 2020 when the economy contracted about 5 per cent as a result of the coronavirus pandemic.

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[See also: The ethical dilemma of rebuilding Ukraine after the war]

Leonid Volkov, the former chief of staff to the imprisoned Russian opposition leader Alexei Navalny, wrote that Russian president Vladimir Putin is hoping for Western electorates to pile pressure on their leaders to push Ukraine to accept a ceasefire formalising Russia’s control over the territories it already occupies in the east and south of the country.

“Ukraine’s Achilles’ heel is its dependence on the West. The war has destroyed much of its economy, and there’s nothing left to fight with apart from Western armament. Kyiv can’t cope without European support right now – and this creates opportunities for blackmail,” Volkov wrote.

A ceasefire would end the worst of the bloodshed and help soften a looming economic crash. It would allow Moscow to spin the first phase of the war as a Russian victory, having annexed swathes of Ukraine. Russia’s exhausted forces could use the time to rest and regroup, with the option of restarting open hostilities in the years to come, likely with much more effective strategy and tactics than have been seen for much of this war.

An end to hostilities on Russia’s terms would provide short-term relief to many Europeans. It would also be a mistake. Unless Russia is defeated militarily, Putin will not abandon his imperial ambitions, in Ukraine or elsewhere. Western leaders, above all Germany’s, should level with their electorates that the coming winter is the price to be paid for years of complacency towards the Kremlin.

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