Northern Europe: The Quiet War for Energy

Harsh, endless winter was more than I bargained for.

The lakes are frozen, every cobbled street and sidewalk glazed with ice. Wrapped head to toe in layers of wool and insulated ski jacket, I don't dare go out without my hat and scarf. A ten-minute walk to the grocery store is a lesson in survival. Produce on the shelves is from Senegal, Egypt, Brazil.

I have no doubt that Europe would freeze and starve to death without oil and natural gas. Food, industry, housing, medicine, transport - everything to sustain life depends on heat energy, price no object.

That's why Germany, Denmark and France are backing the $6 billion Nord Stream gas project to build an undersea pipeline from Russia's Yuzhno-Russkoye field, bypassing Ukraine, Belarus and Poland. Proposed in 1997, Nord Stream drew emphatic protests from the start, because it would give Russia enormous leverage against land-based gas transit countries and the proposed Baltic Sea route was strewn with unexploded WWII mines, chemical weapons, and wrecks.

Finland, Sweden, and the Baltic states of Latvia, Lithuania and Estonia were outraged about environmental dangers. Russia blithely issued an environmental impact assessment in 1997 that declared the 1200-kilometre Baltic undersea route "safe."

Contracts for pipe, concrete, turbines and dredging have been let, with German ex-chancellor Gerhard Schröder in charge of finance. Based in Switzerland, the managing director of Nord Stream AG is Matthias Warnig, a former East German secret police officer and personal friend of Vladimir Putin.

In 2006, sizing up the parties and their proxies, Poland's defence minister Radosław Sikorski rather cruelly compared the Nord Stream project to the infamous 1939 Nazi-Soviet Molotov-Ribbentrop Pact. And such fears are not entirely rhetorical.

"Valuable partners must be nurtured and promoted," wrote BASF executive director John Feldmann in 2005.

"To this end, we have established the joint venture Wingas (35 per cent Gazprom, 65 per cent BASF Wintershall)...We have also teamed up with Gazprom to produce natural gas in Russia together in the form of the joint venture Achimgaz... If not from Russia, then where are our resources to meet growing demand for gas going to come from?"

That's what Poles and Ukrainians are wondering. When the twin 48-inch Nord Stream pipeline is completed, supplying 55 billion cubic metres per year directly to Germany, bypassing former Warsaw Pact pipelines and concessionary pricing, Russia could freeze Poland to death in winter with the flick of a pump switch.

The drama has two or three more winters to play out, while the Baltic Sea is swept of obstacles like shipwrecks and secret Russian chemical weapon dumps. According to sea salvage experts Bactec International, "there are 150,000 unexploded bombs sitting on the floor of the Baltic Sea, left there by the Russian and German armies in the 1940s. Clearing them all will constitute the biggest commercial mine-clearance project ever. About 70 of these mines, each filled with 300 kg of explosive charge, sit in the pipeline’s path, mostly in its northern section."

Clearing them will be an ecological nightmare.

"After sounding a warning to surrounding ship traffic, scaring fish away using a small explosive, and then emitting a 'seal screamer' of high intensity noises designed to make the area around the blast quite uncomfortable for marine mammals, Bactec’s engineers [will] erupt a 5 kg blast, forcing the mine to detonate."

Emphatic environmental opposition in Sweden, Finland, Estonia, and Latvia is echoed by the World Wide Fund for Nature, International Maritime Organisation, Greenpeace, and of course Poland. The Swedes further allege that fiber-optic monitoring sensors on the planned pipeline could be used for Russian espionage. The European Parliament voted 542 to 60 calling on the European Commission to evaluate the impact caused by the Nord Stream project.

But Poland isn't waiting to be frozen by a gas shut-off. Fifteen shale gas concessions have been awarded in the Gdansk Depression, five in the Danish-Polish Marginal Trough, and six on the East European Platform Margin northeast of the Marginal Trough. Ten of the concessions are held by supermajors Exxon, Chevron, and Marathon.

Poland's shale gas resources could be gigantic. In the Warsaw Trough and Lublin Trough, more than 10,000 ft (3,050 m) of organic-rich Silurian section may be present. It puts a new twist on Exxon's $31 billion acquisition of XTO Energy, a US horizontal shale fraccing outfit. I wouldn't be surprised if XTO's staff, rigs, and multistage fraccing strings were packed up and shipped to Gdansk, as special forces deployed in Europe's not-so-quiet energy war.

What worries me most is Russia's inherent instability, corruption, incompetence, and history of neglecting its own population. They are at greatest risk of freezing to death if Gazprom fails.

I know it sounds preposterous to suggest Gazprom is vulnerable, but when the survival of whole nations depends on Kremlin muscle and morality, it's prudent to think twice.

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