Practical actions for the construction of the Nord Stream pipeline are moving along according to schedule. The construction of the Gryazovets-Vyborg gas pipeline, which will connect Nord Stream to the Unified Gas Supply System of Russia (UGSS), is more than halfway complete. The government of Saxony has already granted permission for the construction of the first section of the Opal pipeline, which will connect Nord Stream with the German gas transmission networks. A number of contracts for work on the offshore areas have been signed. Meanwhile, on October 17, 2009, a representative of the Vyksunsky Metallurgical Plant reported the completion of pipes for the first stage of the Nord Stream pipeline (25% of all the necessary pipes are produced at the plant, 75% will be purchased from Germany). Contracts on the Russian gas supply have been signed, including with E. ON Ruhrgas and Wingas (Germany), Dong Energy (Denmark) and GdF Suez (France).

No problems with financing the offshore portion of the project are expected. According to the latest estimates, which were released in the spring of 2008, the total cost of the first and second phase of the project amounts to €7.4 billion. This is a large number. The Norwegian project, Langeled – which is comparable in length and basic parameters to a single thread of Nord Stream – cost only €2.5 billion. Gazprom will most likely be able to reduce some costs due to the falling prices on steel pipes. However, taking into consideration the falling price of the dollar, the project cost may actually increase, although this is unlikely to be critical to the consortium.

Despite the decline of Gazprom investments that has taken place since 2009, the volume of funds allocated for the Nord Stream project continues to increase. In the summer of 2009, Gazprom approved the provisioning of guarantees, with a limit of €24 billion, to Nord Stream AG for future gas supplies. In August, Nord Stream AG requested from banks a syndicated loan in the amount of €3.9 billion needed for the first phase of the project. Personal resources of the consortium members, as well as their ability to attract commercial loans, provide confidence that if the construction in the offshore section is to begin in April 2010, then the first stage of the pipeline will be completed by 2011. The only problem lies in gaining permission from the countries involved.

Political constraints and economic interests

The position of Poland, Latvia, Lithuania and Estonia is primarily political in nature. Considering the difficult relations with Russia, any action made by Gazprom, down to its very existence, are perceived as a threat to the energy security of the EU. Representatives of these countries even try to deny EU’s obvious interest in the project because it “will increase EU’s dependence on Russian gas supplies.”

Thus, in late September, during a press conference at the European Parliament, Lithuania’s newly elected president, Dalia Grybauskaite, said: “This is the first time that I hear this project being a priority for the EU.” This type of rhetoric is also economically motivated. By trying to disrupt the construction of Nord Stream, these countries are hoping to return to a land based project, the Amber gas pipeline.

This would allow getting substantial geopolitical (strengthening its status as transit countries) and economic (rent and transit fees) bonuses. The conflict between European and national interests is clear; for some reason, it is assumed that the transfer of Russian natural gas through Poland and the Baltic states won’t increase European dependence on Russian natural gas. However, because the pipeline route does not enter the economic zones of these countries, they are not able to block the project.

Denmark's interest in the implementation of the Nord Stream project is linked to its plans to increase the share of natural gas in its energy balance. This will allow fulfilling the commitments to reduce carbon dioxide emissions, which will be especially difficult to achieve if the project fails. In early October, Gazprom signed an additional contract with Dong Energy, according to which Russian gas supplied to

Denmark will double, from 1 to 2 billion cubic meters annually. It seems that the signing of this contract was the decisive argument in favor of the Danish government granting a building permit.

Finland's position is determined by both environmental concerns and economic considerations.

Finland’s economic interests were met by deciding to build a branch pipeline to Finland and hiring Finnish companies as subcontractors. The probability of gaining Finland’s permission to construct the pipeline is relatively high, though difficulties may arise.

Today, Sweden plays the key role in the fate of Nord Stream. Meanwhile, its position is becoming more and more skeptical. Particularly worrisome is the negative attitude toward the project of the authorities of Gotland Island, and signs that a negative position may be forming within two parties of the ruling coalition.

Sweden does not have any direct economic interests in the project, because it does not currently, nor does it plan to, purchase Russian natural gas. Relations between Sweden and Russia leave much to be desired, in particular due to Sweden’s critical attitude toward Russia’s domestic political situation and its policies in the post-Soviet territories.

Sweden has traditionally been particularly attentive to the interests of the Baltic countries. Of course, there is also a significant number of environmental concerns. It should be noted that a great number of requirements that were made by Sweden have been met, most importantly, Nord Stream AG agreed to abstain from building a service platform around Gotland Island.

Who benefits most from Nord Stream?

The assumption that the project solely serves Russia’s interests is unfounded. It’s worthwhile to remember that in addition to Gazprom, the consortium consists of German E. ON Ruhrgas and BASF/Wintershall, as well as Dutch Gasunie, not to mention the desire of the French GdF Suez to join the project.

According to estimates made in 2007 by the European Commission, European gas consumption will grow from 314 billion cubic meters to 509 billion cubic meters in 2025. Deliveries via Nord Stream will provide a quarter of the incremental gas consumption in the EU. It wasn’t by chance that in 2001, the EU assigned the pipeline the status of a “project of European interest,” and European Energy Commissioner Andris Piebalgs has recently been expressing support for the project on a regular basis.

The pipeline will also allow reducing transit risks, which is in the interests of Russia as well as the EU.
In regard to the environmental safety of the Baltic Sea, the pipeline received a positive assessment from studies done by Germany, Denmark and Finland.

The consortium seeks to consider the possible negative implications for the European business sector. For example, on September 15, Nord Stream AG signed an agreement on compensation measures with fishing associations of the Baltic countries. Also, Russian authorities have settled certain economic disagreements with Finland and are ready to discuss Denmark’s proposed preferential investment plan.

There is no reason to assert that these decisions are somehow connected with the project, but it would also be naive to assume their complete coincidence.

Opponents of the project are basically left with two arguments. First, the Baltic Sea argument: it isn’t a place for the construction of pipelines. But in addition to the Nord Stream project, today gas pipeline projects are being developed by Denmark-Poland (length of 230-280 km), Germany-Denmark-Sweden (220 km) and Finland-Estonia (80-120 km). And second, Nord Stream is unacceptable from a political point of view because, as Finnish Foreign Minister Alexander Stubb stated in early September, it “undermines the unity of the EU.”

The disruption of this project due to political and economic interests of a few European countries will be of great disappointment to Russia. It may even be a reason to reassess the prospects of energy cooperation with the EU and pay more attention to the development of liquefied natural gas projects. Moreover, the disruption of the project will not only create problems for Russia but a large number of European countries as well.

Today, Finland and Sweden face a choice: give priority to domestic political considerations and very specific interests of a few European countries, or prioritize a project that will improve the energy security of the continent and give new momentum to economic cooperation between the EU and Russia.

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Last Friday, the Russian Ministry of Interior displayed the capabilities of the Russian robot cop during exercises at a military aircraft range in the Moscow suburb of New Balashikha. The robot assisted special forces in storming a house where terrorists were allegedly hiding. The machine released a smoke bomb and cleared the way for the policemen by throwing a grenade at a barricade in front of the “militants’ hideout.” The role of “Metalist” is to handle intelligence operations and provide fire support for the special forces.

“A VSK-94 rifle is installed on the machine, and a Yarugin pistol is set on the lifting mechanism,” said Sergey Volkov, the designer of the robot. “There is also a hand grenade launcher.”

A speaker can also be installed (to communicate with the terrorists, for example) or a special system for laying explosives.

The robot cop is controlled with a remote control that is equipped with monitors displaying the machine’s movement. By using two joysticks, one can choose the route, correct the movement, aim and shoot. The maximum distance that is allowed between the robot and the remote control is 200 meters. The battery is designed to last for 2.5 hours.

The Russian “RoboCop” was created in just two years at the Kovrov Electromechanical Plant. The developers accomplished the basic requests of the Interior Ministry: the machine is light-weight and able to use two types of weapons and grenades.

For now, there is only one model of the “Metalist.” The machine is not yet officially being used by the Interior Ministry; first, it must undergo testing in different situations. Special forces officers say that they have been asking for the “RoboCop” for a long time.

“Such a robot is capable of saving many lives, but it will be long before it will be used by our special services. It's simply too expensive,” Sergey Goncharov, president of the Group Alfa Veterans Association, told Trud. “This machine is a few steps more technologically advanced than the robot snipers, which are currently being used by the operatives.”

It cost about $10 million to develop the apparatus.

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Presidential opponents were the first to mention the suspicious nature of the epidemic that took over Ukraine. Deputy Inna Bogoslovskaya said that, according to her sources, bacterial infections are being counted as viral illnesses in order to make it look as a rampant endemic. It’s allegedly similar to the Chinese pneumonic plague. It’s important to note that regions that initially supported Yushchenko and then became far-right were the first to fall victim to the illness.

Only a strong hand capable of lifting any disaster can turn them onto the right direction. Yushchenko, who is apparently aware of this, visited the ailing Lviv and promised that he will stop the epidemic in about a week.

Another leader with a strong yet feminine hand, Yulia Tymoshenko, is not spending her time visiting the regions. She is fighting the flu from Kiev by holding governmental meetings and demonstrating that she is the only one among the ministers capable of dealing with the disaster. The government has already allocated 3 billion hryvnas (about $400 million) to fight the disease – and this will not be the last outlay of funds.

In the competition to be the first to show awareness and cancel all pre-election public events, the winner was Viktor Yanukovich. Tymoshenko followed him in canceling her tour of electoral concerts.

Yushchenko’s campaign came in third. Besides getting the loud PR slogan, “Our nation’s health is more important than our victory,” the candidates are saving money that would otherwise be spent on meetings and their travel around the country.

Meanwhile, the candidates were given free PR time during the TV marathons that have now been continuing for three days in Ukraine. During this time, the candidates are advertised along with one-time-use gauze bandages, which are just as useless in fighting the influenza as the politicians. To protect oneself from the disease, thick cotton-gauze bandages from the Soviet civil defense days are needed, or respirators.

Following the flu crisis, a drug crisis awaits Ukraine – due to the attempts to impose a moratorium on the rising costs of medicines in accordance with the exchange rate, only one month’s worth of drug supplies remains in stock. The epidemic and the panic exhausted them in three days.

Even the ministerial cabinet was taken over by panic. In a private, governmental pharmacy, lines reached up to 200 people. While they are waiting for oxolinic ointment, simple Ukrainian people are saving themselves with vodka, onion and garlic. The most effective type of garlic is called “Moscal.” In just one day, its price increased six-fold – to $4 per kilogram.

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