July 3, 2020, 17:44

Pros and Cons: ‘Unstoppable’ Nord Stream 2 Dividing EU Into Two Camps

Pros and Cons: ‘Unstoppable’ Nord Stream 2 Dividing EU Into Two Camps

Europe remains divided over the Nord Stream 2 project but even the endeavour’s ardent antagonists are forced to admit that the construction of the pipeline can’t be halted. Meanwhile, European countries are increasing Russian gas imports, according to preliminary Gazprom data.

While the Nord Stream 2 pipeline is due to become operational in 2019, the Russo-European endeavour continues to be a bone of contention dividing the EU into two camps amid US threats to impose sanctions against the project’s participants.

Nord Stream 2 Proponents

Germany is interested in the project as it would turn the country into a major gas hub: Nord Stream and Nord Stream 2 are due to deliver 110 billion cubic metres of gas per year to Europe through Germany.

In response to Washington’s threats and Brussels’ criticism, Berlin has repeatedly emphasised the importance of the energy project.

“Nord Stream 2 is the wrong whipping boy,” German Economy and Energy Minister Peter Altmaier told Handelsblatt on 20 January, adding that it was “far advanced, with pipes laid over kilometres in the sea”.

Austria also supports the endeavour. As Russian Ambassador in Austria Dmitry Lyubinsky told Sputnik 28 December 2018, Vienna believes “that this project will be successfully implemented”.

Of the five countries whose permission is needed for the construction of the offshore pipeline running through the Baltic Sea, Germany, Russia, Finland and Sweden have already signalled their consent.

Business interests of European energy giants are also at play: The project’s participants include France’s Engie, Austria’s OMV AG, UK-Dutch Royal Dutch Shell, and Germany’s Uniper and Wintershall. To date, the parties involved have invested over 6 billion euros ($6.8 billion) in the construction of the Nord Stream 2 gas pipeline.

Nord Stream 2 Antagonists

Meanwhile, Nord Stream 2 antagonists are claiming that the endeavour poses a grave threat to European energy security.

In May 2018 Polish Prime Minister Mateusz Morawiecki dubbed the pipeline a “hybrid weapons” aimed against the EU and NATO.

Poland’s rationale is clear: the country is pushing ahead with its own energy initiative — the Baltic Pipe — which envisages the construction of an offshore gas pipeline connecting transmission systems of Poland and Denmark.

However, Morawiecki admitted in late January 2019 that it is practically impossible to axe the Nord Stream 2 project: Russia and Germany “are two powerful states, so to speak, and it is not easy to forbid them from doing anything”, he admitted, reiterating that Nord Stream 2 is “against European values”.

Ukraine is also up in arms about the Russo-European pipeline as it may hypothetically deprive it of gas transition revenues. Additionally, Estonia, Latvia, Slovakia, Romania, Lithuania and Croatia have voiced energy security concerns over the project.

Denmark is somewhere in the middle, being the only country that has not approved the pipeline construction so far, citing security and environmental concerns. Earlier, in November 2017 the country’s parliament passed the law allowing it to ban the pipeline going through its waters on grounds of security or foreign policy.

However, Nord Stream 2 operator came up with a “plan B”. In accordance with it, the gas pipeline can be laid through the country’s exclusive economic zone, bypassing the territorial waters. It will pass the north-west of the Danish island of Bornholm and will be 36 km longer than the original one. Nord Stream 2 AG stated that Denmark would not be able to block it, as it is not subject to the aforementioned legislation, adding that it expects to get the green light from Copenhagen by the end of 2019.

Nord Stream 2Nord Stream 2 pipeline construction underway in Finnish waters in the Baltic Sea.

Brussels Throwing Sand in Nord Stream 2 Gears

For its part, the EU leadership is also trying to throw sand in Nord Stream 2 gears. According to Eurocrats, the construction of Nord Stream 2 contradicts the bloc’s objectives as well as the provisions of the Third Energy Package — a legislative package for the union’s internal gas and electricity market.

Brussels consider it necessary to diversify energy supplies and ensure the bloc’s gas market competitiveness, stressing that Nord Stream 2 would increase the EU dependence on cheap Russian pipeline gas.

On 12 December the European Parliament adopted a non-binding resolution calling for the cancellations of the Russia-led Nord Stream 2.

However, as Russian Foreign Minister Lavrov suggested during his November interview on Rossiya 1 broadcaster, the pipeline’s European antagonists are simply dancing to Washington’s tune.

Trump Stepping Up Pressure on EU Over Russian Gas

The Trump administration has been steadily stepping up the pressure against Nord Stream 2 since the US president’s inking the Countering America’s Adversaries Through Sanctions Act (CAATSA) into law on 2 August 2017.

Initially, Donald Trump merely castigated his European partners, especially Germany, for becoming “captives” to Russian energy and urging them to buy American liquefied natural gas (LNG). Then, Washington started issuing veiled threats to European energy companies referring to potential sanctions over the Nord Stream 2 project.

Thus, in January 2019 US ambassador to Germany Richard Grenell sent letters to Russia’s energy partners in Germany warning they could face sanctions from the US. These letters prompted criticism from both German businessmen and officials.

Russian Gas and US’ Vested Interests

For its part, Moscow has repeatedly warned the international community against politicising the purely economic gas pipeline project.

Addressing Kiev’s concerns the Kremlin signalled that the implementation of Nord Stream 2 and Turkish Stream still leave the room for the Ukrainian gas transit.

As for the US, observers suggest that Washington’s concerns have nothing to do with European “energy security”.

“The United States holds interest in this discussion,” Dirk Wiese, the German government’s coordinator for cooperation with Russia, told the ARD broadcaster on 31 January. “[The US] explicitly incorporated a requirement to promote LNG into its sanctions policy, it should be remembered”.

Russia is ready to compete with the US in the European gas market as its pipeline gas is considerably cheaper than the American LNG. According to Gazprom’s preliminary data the Russian energy giant has sold 17.6 billion cubic metres gas to the Far Abroad countries in January 2019 which is 1.6 per cent more than in January 2018.

“In particular, exports grew to Italy (by 109.8 per cent), to Austria (by 25.5 percent), to the Czech Republic (56.5 per cent), to France (17.9 per cent), to Finland (20.4 per cent), to the Netherlands (6.9 per cent) and to Denmark (21.8 per cent),” Gazprom’s official site says.

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