Russia's Gas Gamble: Four Risks Putin Faces with the Nord Stream 1 Pipeline Closure

On September 3, 2022, Russia took a huge gamble by cutting all gas to Germany from the Nord Stream 1 pipeline. Energy exports are the Russian government's primary source of revenues. So why is Moscow denying itself critical money in the middle of an expensive war in Ukraine? And how might the strategy backfire?

0:00 Russia Shuts Down the Nord Stream 1 Pipeline
1:11 Lost War Funding
2:56 Driving a Wedge in the West
6:30 German Political Backlash
8:46 German Gas Stockpiles
12:17 Permanent Changes to German Energy Consumption
13:30 Impacts to Negotiations between Russia and Ukraine

By OSCE Special Monitoring Mission to Ukraine:

By rolf_acker:

[ramseya]

You missed a couple of points.

1) By stopping Nordstream, Russia removes any hesitation Germany and the rest of the EU had towards expanding the armament of Ukrainian forces.

2) gas pipelines are being expanded to Africa and will provide a cheap alternative, cutting Russia out further.


3) China and India will keep buying Russian gas, but they dictate the price they offer for it as they know Russia has no other options

[tobiwan]

Germany considered LNG terminals before, but there is a big pipeline network with the Netherlands and Belgium which always had underused terminals. The problem is also not the lack of terminals, but the lack of LNG ships globally. Germany filled its storage to 87% now. up from an historic low of about 20%.

[quato]

From my German perspective I think Putin's strategists severely underestimate the European people's resilience to take one for the team. I'm not in the slightest worried about the winter without any significant heating (in a very old building without any insulation) since I tested minimal heating for several years now. Not nice but managable - and I'm by far not the only one.
It's of course (as per usual) the industry that whinges the loudest - but that is just the usual plea for relief payments out of the public purse (as per usual) - they can ride out a lot of it as well without going bankrupt. It's a German tradition not to overextend the finances of your company in the good times just for that reason (to be able to ride out the bad times).

And the third point is, that the present German government is fairly fresh elected and hasn't to face another one for the next few years - so no panic stages there as well.

Just 2cents from an armchair strategist.

[Arterexius]

I think Russia has severely underestimated both the resilience, creativity and intelligence of its European neighbors. As a Dane, I can imagine that Germany would be highly interested in our gas field as well (yes, we have gas, but its closed for repairs as of now, although scheduled to reopen around 23/24). The Danish gas field Tyra, will of course first serve the Danes, but with the vast majority of Danish homes using only electrical appliances and almost 50% of our energy usage, comes from wind and solar, I believe there should be gas left to supply some of Europe too, which I am certain that a lot of Germans are fully aware of. Tyra can of course not supply anywhere near as much gas as the Russian fields can do, but that's where LNG comes into the picture, as well as the projected heavy increase in renewable energy and better housing (low wattage electrical appliances & better insulation). Geothermal energy could also play a larger role in the future, when it comes to heating up homes, seeing as the pipes only need to be buried approximately 1½ meters below the ground (about 5 feet) in order to generate about 20 °C (68 °F) indoor during the winter months. It's pretty awesome and I expect Europe to struggle for only a few short years, before making it out on the other side even stronger. Perhaps this crisis can be a stepping stone for a trading deal between the EU and the US.

[Mandanara]

Poland was bugging Germany that Nordstream could be used as a weapon since the beginning of this project but cheap gas was more important than integrity and strategic planing.

[stdata]

German citizen here. I am genuinely happy that Gazprom has finally closed Nordstream 1. Russias blackmail potential against Germany is now down to zero and everyone here understands that we have to pull off solid counter measures at all possible levels.

Germany dealt with the oil crisis in the 70s and it will deal with the gas crisis as well. If we could finally come to deliver heavy weapons to Ukraine according to our industrial capabilities I might even get somewhat satisfied with our government.

[eliaschevette]

The craziest thing is that out of all this destruction and death we may get a more united Europe and more renewable energy on some of the biggest economies in the world.

[PbPomper]

The Netherlands already reduced its gas use by a whopping 25%! This whole thing might actually be a blissing in disguise making us more aware of efficiency and energy usage and helps the EU accelerate even faster to a sustainable and independent economy.

[SLOPPY]

We've discussed as a family how to reduce our use of energy to reduce costs. We want to help Ukraine as much as we can, we're more than happy to pop a jumper on this winter. We've got LED's in every room, don't watch TV as much, take shorter showers, don't use the oven, cook things that take less time, heating has been turned down a few degrees and timer shortened. I'm happy to pay more, just a bitter pill to swallow when we hear Gas companies making record profits, I don't get why governments aren't doing anything to stop that. Either way, I can rest in peace we're doing our upmost to help Ukraine survive.
UK sending love.
❤️🇺🇦🇺🇦🇺🇦❤️

[apextroll]

Putin wouldn't play the card in March because he didn't understand the resolve and if he waited until winter it would expire. Playing it now was the only option, but still not a very good one. He gets a D- for strategy.

[PragerFenster]

Actually, from what I learnt from German media in multiple places, German gas storage had already reached a level of 85 or 87 percent by the time Northstream 1 was shut off. Also, most German houses already are equipped with excellent insulation compared to any other European neighbor. So it would really take an exceptionally cold winter for most of us to really freeze. Job concerns and inflation are more worrying, but can be counteracted in part by the government.

[uweinhamburg]

What is not mentioned in the video - you cannot turn on and off gas production from operating gas fields like you turn on and off your water tap on the kitchen. Should Russia run down production even further - that means without finding new customers like Turkey or China - it will become more and more expensive and difficult to start production again.

To the video in general - very comprehensive and balanced description of the German situation! Something most other English-speaking channels completely miss!

[roybakker]

Dutch guy living in Germany here.
Two pionts of interest:
First ist that cutting off the Gas is a sharp Dagger for Russia but only now. The Dagger will depleat its sharpness over time as Europe starts up the replacement of russian gas. Thats why they stab it now and not halfway Winter.
Second is that the Netherlands have gas enought to supply the whole of Europe and also has the capacity to get it out of the ground now. The problem is that they closed the field 2 years ago due to occurring earthquakes. If the need is there it is possible to start up the field again in 2 or 3 weeks, just need to buy out anyone who gets damage when an earthquake again occurrs.

[snooky]

Could rebound and backfire on Russia big time, regardless of a pipeline to China. Other LNG producers are vying for Europe’s massive consumption of gas. Short term pain for Europe was probably wake up call they needed.

[larryking]

Insightful and interesting. Keep up the good work!!!

[citizentex]

How have I not found this channel before? Excellent analysis!

[Alpha]

If Europe stands together and we all show each other solidarity, things will be fine for everyone. If we don't, that's a different matter.

[DMulabiTalejan]

One more important point: Russia cant easily redirect to sell that gas to other people, it has pipelines coming only to Europe. It is costly to get to China by ship, as such China and India are buying it at knock down prices

[fatdaddy-viii-]

Great work! Very informative may always be successful in your endeavors.

[VFella]

From a purely personal point of view: Awesome, 4 risks, plus an introduction. An excellent example of a 5 paragraph essay !! (I am doing an academic writing course right now).
I am, obviously, also interested in the subject and analysis for its own merits, but it's doubly interesting.