“The situation today is fundamentally different,” German chancellor Olaf Scholz announced earlier today. It’s actually not all that much different, as Russia has more or less occupied now what its proxies have occupied for the last eight years, while Germany opted for cheap energy rather than containment. With Vladimir Putin’s aggression now undeniable, Germany has belatedly moved to cut off Russia’s new pipeline and major revenue source.

At least for now, as “halting” a project sounds a little … temporary:

German Chancellor Olaf Scholz halted the Nord Stream 2 gas pipeline project designed to bring more Russian gas to Germany on Tuesday after Russia formally recognised two breakaway regions in eastern Ukraine.

Europe’s most divisive energy project was finished in September, but has remained idle since then pending certification by Germany and the European Union.

The project is designed to double the amount of gas flowing from Russia straight to Germany under the Baltic Sea, bypassing traditional transit nation Ukraine.

That was one of the strategic issues around Nord Stream 2, and perhaps the one that mattered most before Putin escalated the crisis of late. The new pipeline would allow Putin to maintain gas revenues from Europe even in the event that an invasion shut down the existing pipeline. Putin launched Nord Stream 2 ostensibly to deny Ukraine transit fees, but clearly after 2014 Putin saw the older pipeline as vulnerable if and when he tried to re-annex Ukraine into Russia. That would result in a massive loss of revenue. Hence, Nord Stream 2 would exist as a work-around if necessary, and additional distribution if not.

Germany belatedly woke up to the strategic issue, or perhaps better put, has now gotten shamed into addressing it:

“This a huge change for German foreign policy with massive implications for energy security and Berlin’s broader position towards Moscow,” said Marcel Dirsus, non-resident fellow at Kiel University’s Institute for Security Policy.

“It suggests that Germany is actually serious about imposing tough costs on Russia.”

True enough, although the costs are more theoretical — at the moment. Russia still sells its gas through Ukraine and can probably distribute it by other methods, albeit at higher costs. With the region on the cusp of war, futures prices will skyrocket on oil and natural gas anyway, so Putin can make up some of those costs, if not all of them. However, Putin now has to worry about some revenue loss via the existing pipeline that will almost certainly get targeted by either the regular Ukrainian military or by partisans in the event of a full invasion.

However, before we get too cheery about all of these costs, let’s remember that Germany hasn’t canceled Nord Stream 2. Scholz has only committed to halting the certification process. All that means is that Russia can’t distribute natural gas through the new pipeline for now. In fact, Scholz didn’t quite commit to “halting” the process, but instead subjecting it to a much longer cycle of scrutiny:

“That may sound technical, but it’s a necessary administrative step without which the certification of the pipeline cannot happen now,” he said.

Scholz added that Germany’s Economy Ministry would reassess the situation in light of the latest developments.

“That will certainly take time, if I may say so,” he added.

Again, better late than never, but it would be better to be firm than bureaucratic on this point, too. Scholz wants to keep some wiggle room in the same manner as Joe Biden has with the White House’s curiously wishy-washy interpretations of what “invasion” means, which I’ll discuss in my next post. There is some wisdom in this by incentivizing Putin to stop at the hard-line partition he has imposed rather than a full invasion of the rest of Ukraine. However, it’s too little and too late to get Putin to reverse course and withdraw from the Donbas, just as the White House’s reactions seem designed as a tacit acceptance of this fait accompli.

Had Germany refused to partner on Nord Stream 2 when it mattered, it might have kept Putin at bay. It seems doubtful that Scholz’ bureaucratic delay on the pipeline will convince him to do anything other than what Putin already has planned.

Update: Does anyone still wonder why Russia wanted to build that pipeline?

German Chancellor Olaf Scholz has issued an order to halt the process of certifying the Nord Stream 2 gas pipeline. Well. Welcome to the brave new world where Europeans are very soon going to pay €2.000 for 1.000 cubic meters of natural gas!

— Dmitry Medvedev (@MedvedevRussiaE) February 22, 2022

For readers more used to American numeric representations, that’s two thousand euros for one thousand cubic meters of natural gas. To give an idea of Medvedev’s threat, the price in the US for a thousand cubic meters of natural gas was $7.03 in November of last year, the last data in this table from the EIA.

It seems pretty clear now that Putin wanted his thumb on the EU and NATO by addicting them to Russian natural-gas resources. Perhaps this tweet will jolt Germany back to its senses and get them to return to nuclear energy and keep coal at least as a transitional source.