Why the Russian-German Nord Stream 2 gas pipeline matters

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The Ukraine crisis seems to have turned around and Russia has declared this withdrew some troops from the border, but an elephant remains in the room. Called Nord Stream 2, it is an underwater gas pipeline from Russia to Germany, but perceived by some as a geopolitical weapon.

Ukraine is mad at the pipeline for bypassing the country, denying it transit fees for Russia’s gas exports. It has also sparked fears that Russia could shut off gas supplies to Ukraine without jeopardizing its own gas exports to Europe. It could give Russia complete dominance over gas supplies to Europe, leveraging and influencing those countries. In some countries, it has also raised old fears that Russia and Germany might be fighting back against the rest of Europe.

Some members of the European Union have security concerns about the Russian presence in their waters, which must guard the 1,222 km pipeline that runs under the Baltic Sea past Finland, Sweden and Poland before reaching Germany.

America’s troubles

The United States believes the pipeline could give Russia too much clout and influence over Europe, increase the threat of a Russian invasion of Ukraine and hamper its own efforts to contain Russian leader Vladimir Putin.

The US was opposed to the project from the start, but Germany under then-Chancellor Angela Merkel pushed it ahead, and despite tensions in Moscow-Berlin relations over the Alexei Navalny affair — Merkel blamed the Kremlin for attacking the Russian opposition in charge – the $11 billion pipeline was completed in September 2021, although it still awaits German certification to become operational.

Even before the current Ukraine crisis, the US had imposed some sanctions on Ukraine, although in May 2021 the Biden administration waived two crucial sanctions that it would have completely torpedoed to give diplomacy a chance.

In July 2021, President Joe Biden and Merkel sat down for talks and largely agreed that Russia should not be allowed to use the pipeline as a weapon against Ukraine. But Merkel also said that both sides “came to different conclusions about what this project entails”.

The two leaders are said to have prevented a collapse in the transatlantic alliance that US sanctions against Germany and other supporters of the pipeline in Europe – notably France, Austria and the Netherlands – could have brought about. But some saw it as a capitulation by the United States.

In recent weeks, Biden and other US officials have made it clear that if Russia invades Ukraine, Nord Stream 2 would be among the first casualties.

“If Russia invades, that means tanks or troops cross the border into Ukraine again, then there will be — there will be no more Nord Stream 2,” Biden said during a joint press conference with Chancellor Olaf Scholz. “We’re going to put an end to this… I promise we’ll get through it.”

According to some analysts, the US sees the joining of Russia and Germany in an economic partnership as a harbinger of reversing its role as guarantor of security in Europe and Nord Stream 2 as a threat to an arrangement that has been in place since the beginning of World War II and the beginning of the Cold War.

north stream 2

Scholz intervenes

Scholz, who made the US visit in response to criticism at home and abroad that he was “absent from action” during the Ukraine crisis, even as French President Emmanuel Macron took the lead with his shuttle diplomacy between Kiev and Moscow took over, he assured that Germany was not about to break away from its NATO allies.

“We are one voice and we do things together and we have made it very clear that military aggression against Ukraine will have serious consequences that we have jointly agreed on,” Sholz said. But it was noticeable that he didn’t say the word Nord Stream during his visit.

Like Macron, Scholz also held talks with Ukrainian President Volodymyr Zelenskyy and went to talks with Putin next to Moscow. Despite repeating their differing positions and demands, Russia announced on the same day that it had “partially” withdrawn troops from the Ukrainian border. It’s unclear whether Russia’s troop withdrawal had anything to do with Scholz, but it helped salvage some of his image as a European leader.

US, EU and gas

The US’s persistent opposition to Nord Stream 2 across three administrations – Obama, Trump and now Biden – has reignited discussion of an old question asked whenever the US enters an arena of conflict – “is it all about the oil” , or in this case, gas?

The EU imports less than 5% of its gas from the US (the top four suppliers are Russia with 41%, Norway with 16%, Algeria with 7.6% and Qatar with 5.2%, according to 2019 figures). But as a net exporter of LNG since the middle of the last decade, the US wants to expand its markets and reach into the continent. According to one estimate, 23% of US gas exports currently go to the EU, reaching a peak of 21 billion cubic meters (bcm) in 2021. Among the buyers are France, Italy, Spain, Greece, Portugal and many smaller countries. US exports are seen by some as crucial to Europe’s energy supply diversification and energy security. In January, Europe imported more gas from the US than from Russia in a war-like atmosphere.

Source: NYT

Nord Stream capacity

Nord Stream 2 is an extension of Nord Stream that became operational in 2011. Like the first pipeline, Nord Stream 2 comprises two pipelines with an identical combined transport capacity of 55 billion cubic meters of gas per year. Russia is said to have exported 168 billion cubic meters to Europe in 2020 via this and other pipelines running through Ukraine. Germany was the largest buyer with 56 bcm, Italy bought 20 bcm and the Netherlands 11 bcm.

Russia’s economy is mainly dependent on oil and gas exports, and Europe is the largest consumer. Because of this, Nord Stream 2 can cut in both directions. Perhaps that’s why Scholz was moved enough to say it was his “damned duty” to prevent war.

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