Case | HBS Case Collection | November 2010 (Revised February 2013)

Energy Security in Europe (A): Nord Stream

by Rawi E. Abdelal and Sogomon Tarontsi

Abstract

Russian and German energy firms initiated the Nord Stream natural gas pipeline project with strong political support from their home governments but encountered resistance from other states. Although the pipeline would connect Russia with Germany directly, the project was not simply a bilateral matter. First, a need to secure construction permits in multiple jurisdictions around the Baltic Sea involved other countries. And second, Germany's membership in the European Union entailed compliance with goals and values of the entire union, which stressed the imperative of collective action in energy matters and dangers of succumbing to "national reflexes." Thus the implications of the project became a matter of concern to the entire European Union but Europeans struggled to articulate the meaning of Nord Stream: was it a "separate peace" between Russia and Germany to the detriment of the rest, or was it a pan-European deal to the benefit of all? As the case chronicles, the success of Nord Stream depended on the ability of its creators to ensure that latter view prevailed over the former.

Keywords: Non-Renewable Energy; Leadership; Distribution; Business and Government Relations; Conflict and Resolution; Energy Industry; Russia; European Union; Germany;

Language: English Format: Print 40 pages EducatorsPurchase

Citation:

Abdelal, Rawi E., and Sogomon Tarontsi. "Energy Security in Europe (A): Nord Stream." Harvard Business School Case 711-026, November 2010. (Revised February 2013.)

Related Work

  1. Supplement | HBS Case Collection | November 2010 (Revised February 2013)

    Energy Security in Europe (B): The Southern Corridor

    Rawi E. Abdelal and Sogomon Tarontsi

    Nabucco natural gas pipeline, initiated by a group of European energy companies, was intended to connect the broad gas-rich region of the Middle East and Central Asia to Europe for the first time, which would diversify supply sources. At the same time, an Italian-Russian consortium announced South Stream natural gas pipeline, which would diversify transport routes for the delivery of Russian gas to Europe. To win support, backers of Nabucco and South Stream insisted that their projects were aimed at fulfilling goals of the energy policy of the EU (reduction of use of fossil fuels to combat climate change and guaranteed physical availability and affordability of imported fossil fuels). But, as the case demonstrates, both projects progressed slowly, encountering many technological and commercial challenges, which, however, were eclipsed by the extreme politicization of Nabucco and South Stream: pipelines became a factor in domestic politics of several European nations and figured prominently in relations between the EU, EU states, Russia, Turkey, former Soviet republics in Caucasus and Central Asia, and the United States. Although they would comprise only a small part in the overall architecture of Europe's energy security, the case of Nabucco and South Stream reveals the limits of the ambitious energy policy of the EU.

    Keywords: Non-Renewable Energy; Governing Rules, Regulations, and Reforms; Policy; Distribution; Business and Government Relations; Conflict and Resolution; Energy Industry; Russia; European Union;

    Citation:

    Abdelal, Rawi E., and Sogomon Tarontsi. "Energy Security in Europe (B): The Southern Corridor." Harvard Business School Supplement 711-033, November 2010. (Revised February 2013.)  View Details
    CiteView DetailsPurchase Related

  2. Case | HBS Case Collection | November 2010 (Revised February 2013)

    Energy Security in Europe (A): Nord Stream

    Rawi E. Abdelal and Sogomon Tarontsi

    Russian and German energy firms initiated the Nord Stream natural gas pipeline project with strong political support from their home governments but encountered resistance from other states. Although the pipeline would connect Russia with Germany directly, the project was not simply a bilateral matter. First, a need to secure construction permits in multiple jurisdictions around the Baltic Sea involved other countries. And second, Germany's membership in the European Union entailed compliance with goals and values of the entire union, which stressed the imperative of collective action in energy matters and dangers of succumbing to "national reflexes." Thus the implications of the project became a matter of concern to the entire European Union but Europeans struggled to articulate the meaning of Nord Stream: was it a "separate peace" between Russia and Germany to the detriment of the rest, or was it a pan-European deal to the benefit of all? As the case chronicles, the success of Nord Stream depended on the ability of its creators to ensure that latter view prevailed over the former.

    Keywords: Non-Renewable Energy; Leadership; Distribution; Business and Government Relations; Conflict and Resolution; Energy Industry; Russia; European Union; Germany;

    Citation:

    Abdelal, Rawi E., and Sogomon Tarontsi. "Energy Security in Europe (A): Nord Stream." Harvard Business School Case 711-026, November 2010. (Revised February 2013.)  View Details
    CiteView DetailsEducatorsPurchase Related

About the Author

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Rawi E. Abdelal
Herbert F. Johnson Professor of International Management
Business, Government and the International Economy

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