Nord Stream, the controversial natural gas pipeline linking Russia directly with Germany has hit another snag. The Swedish government has denied the company’s application for building the line.

Consortium Nord Stream’s application for Swedish permission to build a gas pipeline under the Baltic Sea is too incomplete to take a stance on, the Swedish government said on Tuesday. Sweden’s Environment Ministry said it had on Tuesday asked Nord Stream to augment its application with environmental impact assessments along with consideration of possible alternative routes, among other things.

“Among other things” is of course code for complete rejection and the pipeline not being built. The Swedish Ministry of Defense also objected on the grounds that increased Russian naval activity and intelligence gathering in their commercial waters would be a security risk. While the Russians did little to ease these concerns with the comment that the Russian Baltic fleet would ensure the ecological safety of the project, the fact remains that it is unclear what exactly the harm would be as today’s advanced spying technologies make the presence of outdated Russian ships not particularly dangerous. Nevertheless, Sweden’s longstanding position of official neutrality could give it ample cover to any diplomatic course it chooses.

In addition, the Nord Stream pipeline raises a number of other issues. While Europeans see it as increasing their direct reliance on Russian natural gas exports, Russia sees it as diversifying its export routes and bypassing the continually unreliable land routes which pass through Belarus and Ukraine among others. Indeed, a direct route to Germany would ensure that future payment disputes in Eastern Europe do not endanger Western Europe’s access to natural gas. In addition, it is claimed that around 1 billion dollars would be saved in transit fees annually, yet simultaneously lost by Eastern European countries.

Although agreed upon and begun under former German Chancellor Schröder, current Chancellor Angela Merkel has distanced herself from both Putin and Russia and given that Merkel grew up in the former East Germany, she is bound to be wary of a former KGB agent stationed in the GDR. Europe is already dependent on Russia for over 60% of its natural gas imports and may opt for a compromise including Eastern Europe. Pipeline politics are both endlessly complicated and delicate. So, Russia’s forthcoming reaction should be an interesting one. Stay tuned.

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