High oil prices are driving Russian economic growth

A2: Economic crash stops oil pipeline

Russia won’t stop investment in pipelines-key to their economic prosperity and increased competition

(Adam N., Associate Professor and Co-Director, Center for International Strategy, technology, and Policy in the Sam Nunn School of International Affairs, Russia in Global Affairs, “Eurasia’s Pipeline Tangle,” September 24, 2011, http://eng.globalaffairs.ru/number/Eurasias-Pipeline-Tangle--15337, Accessed: 7/9/12, LPS.)

Russia’s “gas wars” with Ukraine and Belarus and pointed objections to Europe’s “third energy package,” as well as heated competition to develop rival and commercially dubious “southern” energy transit routes, have re-ignited concerns about pipeline politics across Eurasia. Typically, Western commentators and policymakers regard Russian-backed pipeline projects as tantamount to “steel umbilical chords” of dependence, ripe for commercial and strategic exploitation. Even champions of “resetting” relations with Russia caution against complacency, advocating multiple and transparent Eurasian pipelines to temper coercive inclinations over vulnerable downstream customers across Europe and Asia. Similarly, Russian officials and policy experts who trumpet both a new “business-oriented” foreign policy and “eastern vector” for energy exports complain that the volatile Eurasian energy transit landscape handicaps pragmatic pursuit of energy security to the detriment of Russian suppliers and their international customers alike. Arbitrary shifts in terms of transit for Russian energy, Western suspicions about Russia’s entry into the LNG market, as well as the push to construct the Nabucco gas pipeline – a project that would bypass Russia but that remains mired in controversy over sources of throughput and financing – feed Moscow’s anxiety over antagonistic “politicization” of Caspian energy exports. The angst surrounding these episodes is symptomatic of broader debate over the strategic dimensions to cross-border Eurasian energy transit in which pipelines are viewed as either instruments of competitive resource nationalism or conduits for strengthening interdependence and regional cooperation. This, in turn, betrays a conventional wisdom that politics and geostrategic posturing trump the economics of pipelines, rendering the “lands between” Russia/Caspian suppliers and markets in Europe and Asia as mere pawns in the global quest for energy security.

Pipeline capacity to be doubled by 2014- current economic state relies on oil pipeline-investment won’t stop

(Richard, Correspondent for BBC News, BBC News, “Energy Fuels new ‘Game Change’ in Europe,” http://news.bbc.co.uk/2/hi/8090104.stm, Accessed:7/10/12, LPS)

Projected European gas pipeline routes The first pipeline, called Nord Stream, would go from western Russia under the Baltic Sea to Germany, while the second, called South Stream, would go from Russia's south coast under the Black Sea to Bulgaria, eventually ending up in Italy. Gazprom wants to pump gas under the sea directly to Europe so it can avoid transit countries such as Ukraine which lie along the existing land routes. It argues this will improve Europe's energy security. But it will also give Russia the ability to pump much more gas to Europe. Mr Medvedev of Gazprom believes that by 2020, Russia's share of the European gas market will increase from 26% to 33% "because local production is going down and demand is increasing". Energy 'weapon' Construction of the first stage of the Nord Stream pipeline is already underway. Anybody who links up with that gas pipeline and becomes dependent on Russia is very much at their mercy Professor Marshall Goldman Harvard University The Gazprom workers can be found deep in the mosquito-infested forests of Western Russia about two hours' drive from St Petersburg. We were allowed onto an old airbase once used by Soviet nuclear bombers, where pipes have been piled up ready to be welded together. We were then taken to see completed parts of the pipeline being laid in a freshly-dug trench stretching through the forest far into the distance. It was an impressive operation and it was advancing steadily towards the coast. Workers told us they expected early next year to reach the Baltic Sea, where the pipeline will disappear under the water on its way to Germany, assuming all the necessary environmental agreements are signed with countries bordering the sea route. The pipeline is due to start delivering gas in 2011, with a second pipe ready by 2014 that will double the capacity. Energy expert Marshall Goldman, a professor at Harvard University, is convinced that Europe is sleep-walking into an increasingly dangerous level of dependence on Gazprom, a state-owned company with close links to the Russian government.

EU backs pipeline investment- Russia won’t stop investment

(Richard, Correspondent for BBC News, BBC News, “Energy Fuels new ‘Game Change’ in Europe,” http://news.bbc.co.uk/2/hi/8090104.stm, Accessed:7/10/12, LPS)

He argues that Europe has already been divided by Moscow's skilful political use of its energy resources. Individual EU countries such as Germany which have signed big bilateral energy deals with Russia, he says, have "started pulling their punches, fearful of provoking the Russians" when it comes to raising sensitive political issues with Moscow. Nord Stream is being built by a consortium which includes top German and Dutch energy companies, and which has the former German chancellor, Gerhard Schroeder, as chairman of its shareholders' committee. It also has some backing from the European Commission, which describes it as a "project of European interest". Competing projects While the Commission seems unconcerned by the long-term implications of Nord Stream, there is real worry about Gazprom's other big pipeline project, South Stream. No construction work has begun on it yet, but Gazprom insists feasibility studies will be completed this year and the pipeline will be built across the Black Sea to Bulgaria and into the heart of Europe by 2015. Advertisement Austria is home to one of the largest gas-storage facilities in Europe For Europe this could spell disaster. It could kill off one of its most important schemes for breaking away from its dependency on Russia. For five years, the EU has been pushing for a pipeline to be built from the Caspian region to Austria which would carry gas from Central Asia, the Caucasus and Middle East. Crucially, the pipeline called Nabucco would not go across any Russian territory. But like South Stream it would enter Europe via Bulgaria and possibly use several of the same European transit countries.