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The Nord Stream Sabotage: Potential Consequences Exposed

The sabotage of the Nord Stream 2 pipeline near Sweden, Poland and Norway created a huge headache for big tech, in the sense that risk just crossed into unacceptable territory. Big Gas and the prosperity it seeks to ride by cutting Russia out of the Western gas supply club, may have exposed Big Tech to an old risk which could spike. As Rishi Sunak in the U.K. indicated: the risk that Europe and the U.S. can become disconnected across the Atlantic, is substantial.

Whereas Joe Biden threatened openly that we “CAN” bring an end to the Nord Stream 2 if Russia invades Ukraine – and the ex Polish minster of defense openly thanked the U.S. – nobody has yet admitted to sabotaging the pipeline, thus at this point in time it is still speculation who is to blame.

It is not to say that after Russia’s brutal campaign against Ukrainian infrastructure, like Azovstal in Mariupol – that Westerners will have much sympathy for any retaliation in kind. However some questions remain:  Who damaged the Nord Stream 2 pipeline? Who benefits the most from it? What might be the consequences if the Russians retaliate?

Some Interesting Natural Gas Facts:

  • The U.S. is the largest producer of LNG in the world and stands to gain the most in theory if prices can remain high,
  • One day after Nordstream got sabotaged, Norway turned on a new gas pipeline into Poland. Around the same time, Bulgaria connected to it – and a new EU funded pipeline between Bulgaria and Greece was initiated – these coincidences are just too substantial,
  • Russia is the 2nd largest producer and could simply turn off the tap to Germany, it had no need to blow up the pipeline.
  • What sanctions failed to achieve, in terms of damaging the Russian economy, a cessation of Gas exports by capping Nord Stream and replacing it with Gas from Norway, Israel and Cyprus may well achieve.
  • Strategic thinking in both the Democrats and Republicans showed disapproval of Germany buying Russian Gas. This was shown during a NATO meeting between Trump and Stoltenberg and again recently, when Biden promised that he has the ability to bring an end to Nordstream.
  • One interesting view is that should big Tech suffer underwater interruptions, replacements such as Starlink from Elon Musk, may be a viable substitute.
  • Following the Nord Stream sabotage, Donald Trump offered to broker a ceasefire and peace deal.

A 5 year old could have easily formulated the puppet-like statement attempting to blame Russia, which came from the CSIS: “Context is important. The explosions come after Russia has mobilized for war, organized sham referendums, and made nuclear threats to make up for its floundering invasion of Ukraine. Russia may feel the West is underestimating its strength and wants to send a clear message that it must be taken seriously”. Yet a seemingly pro-Russian advocate, colonel Douglas Macgregor, told Judge Andrew Napolitano that he believes the Russians would not have done it, although he does not know who did it.

Putin lashed out and called the West satanic. But really: can we say that IF the West sabotaged Nord Stream, that it measured up to the destruction of Ukraine? Probably not. Yet we do wonder how his possible responses may impact the investment landscape in Big Tech, as explained below.

How might Russia retaliate?

If the assessment of the Pentagon and the British are to be relied on, Russia might be too bogged down in Ukraine to be planning on geostrategic responses. However, if thoroughly supported by other state actors such as China and Iran – and Putin caves in to the suggestions of his generals, then a response could target underwater communication cables and data centers.

It is unlikely that the sabotage of Nordstream could lead to World War 3 simply because the Russians alone do not have the means to last long in such an event. But they can certainly retaliate at the time and place of their choosing. This brings us to the vulnerability of Big Tech.

What people think of as “in the cloud”, actually runs under water. Facebook, Amazon, Microsoft and Google are the majority owners of global undersea cable infrastructure that connects the world, and certainly the Western world too. The biggest fear right now, is that Russian submarines may retaliate by sabotaging underwater communication lines. Data centers are kept underwater too, to provide for natural cooling. These may also represent a target for the Russians and possibly China in the future.

Global terror on infrastructure – a new normal?

Fingers have been pointed at Russia, Poland, Norway, Sweden, The United States – and the U.K. Royal Navy as potential actors who were capable of damaging Nord Stream. It may be that we simply reached the end of an era for Nord Stream, but also the beginning of a new era for global terrorism, sponsored by various states as geopolitical rivals, spiraling out of control – all at the expense of the environment and humanity.

Finally, yes, our own leaders in the West may not have been the best lately: limited free speech, excessive and brutal pandemic measurements, wrecking the economy on purpose etc. HOWEVER – do not think for one second that a world led by Russia and China will be more just. Sometimes, choosing between the lesser of two evils is required.