How Globalization Rose and Fell With Nord Stream

A short while later, Sweden, Denmark, the European Commission, and the U.S. government announced the leaks were the result of sabotage. Whoever the culprit, the sabotage meant the dramatic end of the two pipelines, conceived at the height of globalization to supply Germany and other European countries with natural gas from Russia.

Artsman wasn’t just any citizen waking up to the terrible news. She was one of only a few people in Sweden who had objected to the construction of Nord Stream 1, the first of the two pipelines to be built. That was in mid-2007, and Artsman was a member of Gotland’s municipal council for the center-right Moderate Party. At that time, the Moderates also led Sweden’s center-right government coalition, a staunchly pro-business group of ministers who firmly believed in globalization. Then again, most people, regardless of ideology, seemed to believe in the virtue of closer commercial links between countries. And all over the world, trade was booming.

One day, Artsman was summoned to an unexpected meeting involving her party’s municipal politicians, regarding a potential contract with Nord Stream. The company, majority-owned by Russia’s state-owned energy giant Gazprom, was planning a new pipeline that would transport gas from Russia to Germany through the Baltic Sea. And Gotland, located in the middle of the Baltic Sea, was crucial to the construction.

The proposed project would give Nord Stream sole access to the island’s Slite harbor for the duration of Nord Stream 1’s construction needs. In Stockholm, the government had already indicated that it was content for the project to go ahead. And what was not to like? It was a commercial project involving companies from several different countries that would build crucial energy infrastructure—and bring revenue to Gotland in the process.

“It was a very rushed meeting, and the purpose was that we should decide to take a positive view on Nord Stream getting access to Slite harbor for the construction of Nord Stream 1,” she told me. In her notebook, she still has the points her party colleagues made to her: “You should trust specialists. You’re a Russophobe. Europe, especially Germany, needs energy. I trust those who have more expertise than I do. This can be a peace project.” So convinced were other council members of the wisdom of Nord Stream’s construction that a few of them tried to intimidate Artsman and some of the other dissenters. “We were told that if we voted against the deal we’d bring down the government,” Artsman recalled.

After the initial meeting with her party colleagues in 2007, “they gave me a couple of weeks to do my research, and I began looking into the project. And the more I read, the more I doubted that this was a good idea,” she recalled. She worried about harm to the seabed. She thought about unexploded ordnance from two world wars that might injure the construction crews. And she wasn’t willing to bet on Russia. “It doesn’t matter how many million krona they’re willing to ‘give’ us. I’d never sell Gotland out in this way. Considering Nord Stream’s ownership, with Russian interests, it would jeopardize the island’s security,” she told the local newspaper.

Fifteen years later, with Nord Stream 1 and Nord Stream 2 hemorrhaging gas into the Baltic Sea and the atmosphere, with the world’s attention on the waters surrounding Gotland, and with public opinion concluding that Western energy infrastructure wasn’t safe from attacks, Artsman’s warnings seemed prophetic.

Artsman logged an official reservation, noting that “the pipeline project brings risk to the security of Sweden. It is every citizen’s duty to defend the security of our country.” Her public opposition came at great personal cost. “After the Nord Stream decision, my spare time was essentially consumed by having to defend myself,” she told me. “Other council members crossed the street when they saw me.”

A few weeks after the pipelines exploded, I visited Lubmin, the town on northeastern Germany’s Baltic Sea coast where they come ashore. This is where Achim Langert and Jana Burow live. Burow grew up nearby. Langert grew up in Dresden and later worked as a criminal investigator. A few years ago he retired and moved north, where he met Burow. From their front door, the beach is only a couple of minutes away. If they keep walking and then climb on top of a low embankment, they can see Nord Stream 1 and Nord Stream 2 emerge from the Baltic Sea. In the 1990s, Burow—who had been unemployed since the nearby nuclear power plant was shut—began renting out rooms in her house to tourists. Then, starting in 2009, she got a fantastic string of new guests: geologists and engineers from countries like Britain and Italy who were based in Lubmin for months at a time. They were working on Nord Stream 1.

Around the same time, Lubmin’s newly elected mayor, Axel Vogt, was learning the ropes. A lawyer by training, he’d won election in his first run for public office a few months earlier. “I campaigned to become mayor focusing only on local issues, and then when I became mayor I realized how much global politics we had here in our small town,” he told me. A longtime Lubminer, he’d known about the plans for Nord Stream 1, which involved not just the undersea pipes stretching nearly 800 miles from the Russian town of Vyborg to Lubmin but also a land-based facility in Lubmin and pipelines carrying the gas on to other parts of Germany.

As Vogt took office, Nord Stream 1 was making global headlines. Globalization supporters viewed the pipeline, jointly owned by a consortium comprising Russia’s Gazprom and a minority group comprising the German energy giants Wintershall and E.ON, Engie of France and the Dutch company NV Nederlandse Gasunie, as a stunning success for borderless business. Poland, Ukraine, and the Baltic states, by contrast, accused Germany of making itself dangerously dependent on Russia. It was undeniable, though, that Germany’s postwar commercial integration with other countries had been a smashing success. Why should Russia be any different? Germany, now the world’s leading proponent of commerce-based coexistence, was the country that could prove that optimism and commercial links were the right approach.

After Vogt collected me at Lubmin’s town hall, we drove to the port office, passing Nord Stream’s land-based facility on the way. “I’ve learnt through personal experience that you have to be open to new things,” Vogt told me in the office’s conference room, from where I saw several docked vessels, the German federal police’s Port of Lubmin office, and a hostel ship housing maritime construction workers. “We had to develop the industrial area so that Lubmin would become an attractive place both for our residents and for those considering moving here. You can’t just place all your bets on tourism.” As a young man, Vogt trained in East Germany’s famous cadre program for sports coaches. But when East Germany collapsed, so did Vogt’s career plan. He started over and became a lawyer.

When Vogt assumed his mayoral post, his predecessor had already agreed to host Nord Stream. “Lubmin was stagnating,” he told me. “We had the old nuclear power plant and one other major employer, but that was pretty much it. Our income from business taxes was low, and we didn’t really have any prospects for more companies. I needed to do something about getting businesses to come here. Like many other small towns, they’d been hoping for a major employer to arrive, but that never happened.”

Nord Stream’s impending arrival was, of course, the result not just of mayoral charm offensives under Vogt’s predecessor but also of great-power politics. Nord Stream had always been considered a geopolitical undertaking as well as a commercial one. Indeed, ever since the ’90s, the Russian government and the EU had tried to find ways of delivering more Russian gas to Europe.

For Lubmin, Nord Stream promised to be a boon. The struggling town would benefit from the income brought by long-term renters, from the permanent jobs maintaining Nord Stream’s land-based facility, and most especially from the local taxes the company would pay once the two pipelines became operational. Lubmin’s location had turned out to be an unbeatable asset. To Burow and other residents, the pipelines felt like an enormous blessing after years of anguish over the town’s future.

On Nov. 8, 2011, Nord Stream 1 was inaugurated. In the end, the ambitious project had gone significantly over budget, but the pipeline was now ready for use. It would be able to deliver 55 billion cubic meters of natural gas each year, enough to supply 26 million households. As an engineering undertaking, the pipeline was a marvel. “It was the first time that such a long pipeline, nearly 1,200 kilometers on the seabed and some additional kilometers on land, had been built without any intermediate base stations,” Vogt reflected. “It was amazing to see such a major international project located in our little town in this economically weak part of Germany.” At the inauguration ceremony, Chancellor Angela Merkel sat in the front row in a party tent raised just a few meters from Mayor Vogt’s office. Further back among the assembled potentates sat Vogt. On this day, he was simply a local mayor in the company of some of the world’s most powerful people, but after their departure that evening it would be his responsibility to ensure that the mighty pipeline enjoyed a peaceful existence in his town.

Just over 10 years later, on Feb. 24, 2022, Russian national television aired an address by Vladimir Putin. “Today, I again consider it necessary to come back to the tragic events taking place in the Donbas and the key issue of ensuring Russian security,” the Russian president began, and continued: “I am referring to what causes us particular concern and anxiety—those fundamental threats against our country that year after year, step by step, are offensively and unceremoniously created by irresponsible politicians in the West. I am referring to the expansion of the NATO to the east, moving its military infrastructure closer to Russian borders.” While television stations were airing the speech, Russian troops launched a coordinated attack on Ukraine.

Vogt heard the news in the early hours. “I couldn’t believe it; it was like 9/11, that kind of shock,” he told me. “And it immediately became clear to me that we’ll never see gas flowing through Nord Stream 2. That was a feeling we’d been having for some time. But I still thought that our contracts with Nord Stream would keep going and that the gas that was already flowing through Nord Stream 1 would keep being delivered. My lawyer self said, it’s a contract, there’s just no way that they can just stop delivering the gas.”

Western governments immediately responded by dramatically adding to the sanctions they’d already imposed on Russia. In France, Finance Minister Bruno Le Maire informed a radio station that “we’re waging an all-out economic and financial war on Russia. We will cause the collapse of the Russian economy.” The West could levy this massive economic punishment precisely because Russia had spent the past three decades and some integrating its economy with the West. Some days later, the Russian Duma passed a law allowing the government to confiscate Western-owned planes leased by Russian firms.

Aircraft owners and their insurers were facing combined losses of $10 billion. Russia won: The ink was barely dry on the legislative papers when the Russian government seized hundreds of Western-owned aircraft. McDonald’s, BP, and other Western giants that had been operating in Russia since the 1990s announced they were leaving.

That summer, Nord Stream 1 was shut for maintenance, first once, then twice—and on Sept. 5, the company announced that the pipeline would remain closed indefinitely. Three weeks later, Vogt awoke to find the catastrophe had arrived. Someone had caused the gas-filled Nord Stream 1 and 2 to explode, and suddenly the Ukraine war was no longer just a tragedy in a remote country: a part of it had spread to his small part of the world.

The explosions had rendered unusable the extraordinary pieces of infrastructure conceived of more than two decades earlier to link former antagonists and provide energy for a growing globalized economy. “I don’t want to say that I was expecting it,” Vogt explained. “Sure, when I went to bed in those weeks I didn’t assume it would happen, but I did consider it possible. In the morning of that day, lots of officials arrived, the Bundespolizei [federal police] was on call. And we had a meeting involving all the entities around the port to decide what needed to be done. I immediately thought of the security of all the facilities. I canceled all my meetings and we held security discussions all day.” That’s how the day transpired. After a day full of emergency meetings, Vogt went home. Lubmin’s unexpected starring role in the globalized economy, and its surprising reprieve from poor financial prospects, was over.

Even to its detractors, globalization felt unstoppable. Indeed, political leaders and businesspeople didn’t create globalization as a united effort, let alone to spite ordinary citizens: For often very different reasons, they simply contributed to the blend that was to become known as globalization. And they did so not because they wanted to impose an idea known as globalization on the world, but because suddenly opportunities arose that were so attractive that not seizing them seemed foolish.

In the late 1980s and early 1990s, the Western countries that had been perfecting market economies thus went about exporting them to closed countries all over the world that had begun opening themselves up. It was an exhilarating time, with limitless opportunities for companies, cheaper products for consumers, and better relations between countries. Western policymakers even hoped that Western-style free markets would bring Western-style liberal democracy to the many countries now embracing capitalism. This revolution of combined hope and commerce touched almost every part of society: Ordinary citizens could buy consumer products at much lower prices, while workers found themselves part of global supply chains or had to find new jobs as their employers offshored. A whole generation has grown up knowing no world other than this globalized one.

The cheerful 2008 Beijing Olympics, conducted under the motto “One World, One Dream,” perfectly symbolized this harmonious state of global affairs. Countries seemed to get along, and if there was any ill will, it was toward the bankers who’d caused the financial crisis then ripping through the world.

Now Russia is fighting a war in Ukraine, the United States and China are squabbling over the very nature of their coexistence, and there’s even fear of war involving China. Two new blocs are emerging, and unlike the Cold War’s two blocs, they’re based less on military allegiance than on commercial fealty. Scores of Western companies, for their part, are swiftly trying to withdraw, at least partially, from the new front line. Even at the beginning of this decade, decision-makers were holding out hope that globalization would recover after it, too, was laid low by COVID-19. Instead, things got worse.

Nord Stream 1 and 2 have come to symbolize misplaced hope in globalization. I asked Artsman whether the explosions felt like a vindication. “No,” she said. “But I’ve thought to myself, ‘This Nord Stream project, it was part of Russia’s power plan all along.’ I just didn’t manage to convince anyone of it.”