Hello! Wishing you all a very happy Friday once again. We’ll talk a lot about climate change, and oil and natural gas exploration this week because of two unconnected developments in one area of the world.
The result of the Norwegian parliamentary polls, which were pegged as a ‘climate election’, are out. But the real story is about how it will shape the nation’s future.
Then there’s a bit about a massive pipeline project’s significance. The Nord Stream doesn’t just help supply natural gas, but also acts as a geopolitical tool. You’ll find out more in here.
This day that year
2011: Occupy Wall Street protest, seeking to highlight income inequality, political corruption and corporate greed, started in New York City, United States. The movement later went global.
1978: The Camp David Accords were completed, leading to a peace treaty between Egypt and Israel. The agreement, negotiated by then US president Jimmy Carter, included a broader framework for peace in West Asia.
Norway’s ‘climate election’
Prime Minister Erna Solberg of the Conservative party conceded the parliamentary election on September 14, making way for a new premier to take over after her eight-year reign. The Labour Party, led by Jonas Gahr Støre, bagged 48 of the 169 seats that were up for polls. A party or a coalition needs 85 seats to prove majority.
Solberg’s party won 36. Thus, Støre is the frontrunner to form the next government that he says he’ll take Norway on “a new course”.
Støre could form a coalition with the Centre Party and the Socialist Left. Together, they would have enough numbers to avoid a tie-up with the Red Party or the anti-oil Greens. That’s important because they don’t agree on issues such as oil exploration.
What this means: Støre doesn’t need the Green party’s support to form the government. So the country is unlikely to announce a major move away from fossil fuel exploration anytime soon.
The election campaign was dominated by issues such as climate change.
The Green party, which wants an immediate halt to oil exploration and no production after 2035, has seen rise in its popularity in recent years. Its supporters have highlighted how neighbouring Denmark is stopping exploration and that it aims to end all such production by 2050.
Yet, the Conservatives and Labour have been in a broad agreement that oil and gas production should continue even after 2050. They argue that current oil revenues help in transition.
Balancing act: But some of the prospective allies may still push for a an aggressive response to climate change leading to possible friction within the coalition in the future. For this, Støre has hinted at a compromise that will focus exploration around already developed areas.
Why it’s a contested issue: Crude oil and natural gas account for 40 percent of Norway's goods export value (2020) and the industry employs 7 percent of the total workforce. Oil and natural gas export is around 17 percent of the country’s Gross Domestic Product.
Norway also uses surplus revenues from the petroleum sector to maintain the world’s largest sovereign wealth fund. The fund, holding over $1.3 trillion in assets, helps subsidise the country’s much talked about electric vehicles push (watch this 2017 Vox video for more on that), et al.
There are apprehensions among those involved in the sector about what the future holds if the government confirms a radical shift away from oil and gas exploration.
Why Nord Stream matters
Gazprom, the Russian state-owned natural gas company, announced on September 10 that it has completed construction of the Nord Stream 2. The massive infrastructure project comprises sub-sea pipelines connecting Russia’s western coast to Germany.
It is of major significance to both Russia as well as Germany as it allows the world’s largest country (by area), along with the existing Nord Stream (1) pipeline, to double its gas exports to Europe. Russia is already the world’s second-largest natural gas producer. The supply of gas through the new pipeline will not start until the German regulator gives a nod. It’s not just an economically lucrative arrangement, but also a key geopolitical tool for President Vladimir Putin’s government.
Big geopolitical tool: You see, Russia has been exporting natural gas to European countries using pipelines that run through eastern Europe. That area comprises countries like Poland and Ukraine which are at loggerheads with Russia. “Loggerheads,” I concede, is an understatement. Russia and Ukraine have been involved in a conflict since 2014 (German state-owned broadcaster Deutsche Welle has explained the conflict in this April 2021 video).
All land-based Russian gas pipelines pass through either Poland or Ukraine on their way to other European countries. Plus, these countries levy billions of dollars in transit fees on the Russians.
The Nord Stream 2 allows the Russian Federation to export gas to key consumers like Germany from underneath the Baltic Sea. The new 1,200-kilometre pipeline network allows Russia to completely bypass eastern Europe and effectively pull the plug on a source of income for rivals like Ukraine.
Russia's current transit deal with Ukraine will expire after 2024 and it won’t be obligated to use that route to supply gas to Europe.
The unease: Naturally, Poland and Ukraine are upset about the project and have termed Nord Stream 2 detrimental to European Union’s (EU) security. “[It’s detrimental to] not only Ukraine, not only Central Europe, but also to the security of the whole of Europe, making the EU dependent on Russian gas, contrary to earlier declarations regarding the need to diversify energy sources,” said Marcin Przydacz, Poland’s Deputy Foreign Minister.
The US, a key Ukrainian ally and a Russian foe, agrees. The Nord Stream 2 competes with US’ shipments liquefied natural gas. The Joe Biden administration had in August slapped sanctions on a Russian ship and two companies involved in the project, months after waiving sanctions on a firm building the pipeline.
Why Germany backs Nord Stream: Despite a push back from Washington DC and governments in Warsaw and Kyiv, Berlin has continued to back the Nord Stream project.
That’s because Germany needs natural gas for domestic consumption. With the country opting to move away from nuclear power under its Energiewende programme, it has started compensating the deficit with more natural gas use.
Until last year, Germany imported a third of its natural gas from Russia, another third came from Norway and around 30 percent was brought in from the Netherlands. The remaining was sourced domestically. However, with the Netherlands hinting at ceasing gas production by 2030 citing environmental concerns around gas extraction, Germany needs to find a reliable alternative. This September 2020 Politico piece explains in-depth why Germany can’t say no to the Nord Stream.
Opinion polls show that the German public overwhelmingly supports the project.
US-Germany deal: To assuage some of these concerns, Washington DC and Berlin struck a deal in July by which Germany will take steps and seek actions at the EU-level, including sanctions, “to limit Russian export capabilities to Europe in the energy sector” if Russia tries to “use energy as a weapon or commit further aggressive acts against Ukraine.” Germany will also use “all available leverage” to extend the Russia-Ukraine gas transit agreement by 10 years.
The country will further contribute at least $175 million to a new $1 billion ‘Green Fund for Ukraine’ aimed at improving the eastern European country's energy independence. US and Germany's full joint statement on the deal can be read here.
What else?
AUKUS rises
Australia, the United Kingdom and the US announced the ‘Aukus’ security pact on September 15. It’s being seen as an effort to counter China’s growing influence in the Indo-Pacific.
As part of the agreement, Australia will build nuclear-powered submarines for the first time, using US’ technology. The three countries will also share cyber capabilities and some other technologies.
While China was not named directly, Beijing has called the pact as “extremely irresponsible”.
France is also upset about losing a mega Australian defence contract. French foreign minister Jean-Yves Le Drian told Franceinfo radio that the “brutal, unilateral and unpredictable decision reminds me a lot of what Mr. [Donald] Trump used to do". A French company, partly owned by the state, was to build 12 submarines for Australia in a deal worth around $35 billion.
Dropping coal power plant plans
Here’s a positive news for the planet. E3G, an independent climate change think tank, has said in its report that the global project pipeline of new coal power plants has collapsed since signing of the 2015 Paris climate agreement.
There has been a 76 percent fall in proposed coal power plants since Paris agreement negotiations. As many as 44 countries have already committed to ‘no new coal’ with another 40 having cancelled previously proposed plants, the report suggests.
“The structural transformation of the global electricity sector is accelerating, with countries increasingly steering away from coal power generation as they recognise that coal is a fuel of the past,” said Leo Roberts, the report's author and Research Manager at E3G.
The report further adds that action by just six countries could remove 82 percent of the remaining pipeline of pre-construction projects. The full report by E3G can be read here.
This comes at a time when the US, EU and South Korea, among other wealthier nations, are looking to stop their export-financing agencies from backing coal-based power projects overseas, according to The Wall Street Journal.
This is being seen as the West’s attempt to pressure developing economies such as China and India into taking a stricter position against coal use for power generation. Both countries have so far pushed back on pressure from ‘developed’ economies to commit to ending subsidies for coal-fired electricity.
Korean arms race?
North Korea successfully test-fired a new type of long-range cruise missile last weekend, Yonhap reported citing news reports from North’s state media. Its 1,500-kilometre range is enough to threaten US’ forces deployed in Japan, besides South Korea. The test was seen by some as a provocation by the North amid stalled talks with the US.
On September 15, South Korean military said that the North had fired two ballistic missiles into the sea. This time, it coincided with Chinese foreign minister Wang Yi’s visit to Seoul. Within hours, South Korea confirmed it had again successfully conducted its first underwater-launched ballistic missile test.
While the cruise missile’s firing by North Korea didn’t violate United Nations resolutions, the sanctions are meant to prohibit the country from using ballistic technology.
In August, we had discussed how Kim Jong-un’s government had appeared to have restarted operations at its Yongbyon nuclear reactor. This was seen as Kim’s way of attracting attention of Biden administration, which has shown little interest in dealing with him so far.
Some experts told American news website NK News that North’s latest test could be simply to boost domestic morale. But last week, South Korea had also successfully tested a domestically-built submarine-launched ballistic missile (SLBM). There are concerns that these actions may lead to another arms race between the two nations still technically at war with each other. Read more about this here.
Haiti’s PM barred from leaving country amid assassination probe
Prime Minister Ariel Henry was barred from leaving Haiti amid an investigation into his alleged involvement in President Jovenel Moïse’s assassination in July. A prosecutor has sought charges against Henry.
Henry was asked to explain his links with Joseph Felix Badio, a key suspect in the attack. Prosecutors pointed at records showing the two had phone calls hours before the assassination.
Moïse’s death triggered political crisis in the troubled country. These problems worsened when an earthquake measuring 7.2 on the Richter scale hit Haiti in August.
Interesting reads
South Korea’s population is shrinking. That led to the government shutting bus routes to small remote villages, leaving carless citizens without affordable options to commute. The New York Times' Choe Sang-Hun writes about how one county’s plan revolutionised public transportation in rural areas and is being replicated across South Korea. People, mostly older residents, are paying as low as 100 won (9 cents in USD or 6 Indian Rupees) for short trips. The local government picks up the remaining fare. The story can be read here.
GZERO Media’s Carlos Santamaria and Alex Kliment write down alternative versions of 9/11 and what unfolded after that. What if the Taliban had simply handed over Osama bin Laden after 9/11 to avoid a US invasion? Worth a thought. Read it here.
What’s next?
US President Joe Biden will host the first-ever in-person Quad Leaders’ Summit at the White House on September 24. Biden will be joined by prime ministers of Australia, India and Japan.
The Biden administration has made “elevating the Quad a priority” and hosting the meeting demonstrates US’ keenness in engaging in the Indo-Pacific, the White House said in a statement. Leaders are expected to focus on deepening ties and advancing cooperation in areas such as combatting the COVID-19 pandemic, handling climate change, partnering on emerging technologies and cyberspace, and promoting a free and open Indo-Pacific, the statement added.
Canadian Prime Minister Justin Trudeau is hoping to get re-elected after calling for a September 20 snap parliamentary election. But that gamble now looks increasingly risky. His rivals are now leading, according to the opinion surveys. We had discussed this earlier and we’ll continue to track it.
Federal election campaign in Germany is in its final leg ahead of voting on September 26. Chancellor Angela Merkel’s CDU/CSU party has slipped further in the latest opinion polls and rival Social Democratic Party of Germany (SPD) now leads comfortably after allying with the Greens and Linke. Remember, this election will decide who becomes the country’s new executive leader as Merkel steps down after 16 years in power. The Guardian is running an interactive opinion polls tracker and has listed the key candidates fighting to replace Merkel as the next chancellor.
Before you go…
Finding the newsletter in your inbox
Understanding algorithms deployed by tech giants is difficult. Many of you have been receiving the Untwined newsletter in your Promotions or the spam folder instead of the main inbox. This is a common problem with a lot of newsletters. While there’s currently no way to ensure these emails land in your primary inbox, one of the popular fixes is to manually move these emails into the primary inbox a few times when possible. Something that takes just a couple of clicks, might help beat the skewed algorithm. Empirical evidence supports this jugaad.
There’s a long way to go with this newsletter. The format will continue to be modified in coming weeks. But I remain hopeful that you’ll help spread the word and share this with others who may be interested in stuff like this. Please feel free to give feedback. You can also send a quick email to untwinednewsletter@gmail.com (I really read all of them).