Europe’s source of ‘energy security’ is facing headwinds. This is why 

Zug, Switzerland is known for a few different things. Great views of an Alpine peak once depicted in affectionate detail by Mark Twain. A reputation as a “low-tax paradise.” And a control centre that monitors the flow of gas from Russia to Europe through a $12 billion pipeline.

Or as has been the case recently, not much flow at all.

Since opening in 2011, the Nord Stream 1 pipeline has been a sort of umbilical cord connecting Europe to much of the energy it needs to keep its heat and lights on. By 2020, Russia was supplying nearly a fifth of the natural gas imports in France, for example, about two-thirds in Germany, and 100% in the Czech Republic.

But the pipeline has become fodder for the conflict between Russia and allied countries demonstrating their disgust with the invasion of Ukraine. It recently resumed operations following scheduled maintenance that stirred more anxiety than usual this year – but at sharply-reduced capacity.

Now, importers feel compelled to suck as much gas as they can through the 1,200-kilometre conduit, and into reservoirs, on the eve of an uncertain future.

One thing does seem certain: Europe intends to stop buying Russian gas, eventually. That may make Nord Stream 1 yet another grandiose piece of infrastructure rendered useless, like a Roman aqueduct or a Soviet monument.

It would also serve as a reminder that even well-intentioned plans can go sideways.

Nord Stream 1’s launch was part of a broader expansion of ties between Germany and Russia, the countries at each end of its undersea span that share a difficult history – illustrated by the sunken military submarine and discarded weapons dotting the seafloor along the pipeline’s path.

A Nord Stream executive called the project “an important symbol of the political, economic and cultural ties that will bind our nations.” Russia’s president added: “This is our contribution to Europe’s energy security.”

Now a re-hardening of old divisions has Germany wringing what it can from a frayed relationship. It said recently its storage of natural gas imported from Russia hit 67% of capacity, up from 36% in May.

Nord Stream 1 was criticized from the beginning for bypassing former Soviet states including Ukraine, putting them at a potential disadvantage. Observers also noted that it might only be a matter of time until Russia used its natural gas as an “instrument of coercion.”

The project’s development continued in the wake of Russia’s invasion of Georgia in 2008, and the gas kept flowing in 2014 as Russia annexed Crimea and occupied parts of eastern Ukraine by proxy. The full assault on Ukraine last February, however, proved to be a tipping point.

About a week later, the Switzerland-based company operating Nord Stream 1 issued a statement clarifying that it’s not involved with its Zug neighbour Nord Stream 2 – a suspended companion project that had just been hit with sanctions and is now sitting dormant on the bottom of the Baltic Sea.

As gas flows through Nord Stream 1 continue to be curtailed, EU member states have agreed to cut consumption by 15% this winter.

The impacts are already being felt in Germany, where dimmed street lights make summer nights eerily dark and quiet, and the days feature colder, unheated outdoor pools.

Repercussions could be more severe when temperatures plunge in the winter. Decision-makers may have to choose between providing electricity or heat in some instances.

“It would be unwise to exclude the possibility that Russia could decide to forego the revenue it gets from exporting gas to Europe,” the International Energy Agency said recently. It noted that Russia has done some stocking up of its own, by taking advantage of market uncertainty to double the proceeds it collects from oil and gas exports to Europe.

If Nord Stream 1 does go dormant, however, Russia would also pay a price – by being left with “few other meaningful options for further escalation,” and a big hole in its balance sheet.

That would add yet another victim of the imbroglio to a growing list -- which includes the 140 people in Switzerland who lost their jobs when Nord Stream 2 was hit with sanctions.

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