With Russia’s renewed invasion of Ukraine, attention has once again turned to the controversial Nord Stream 2 gas pipeline linking Russia to Europe via Germany.
The undersea pipeline, which is complete but not yet operational, was an irritant in US-German relations long before Russian President Vladimir Putin said he would recognize the independence of the Donetsk and Luhansk regions.
It has now become a major target as Western governments try to leverage Russia to deter further military action against Ukraine.
Nord Stream 2 is a 764 mile long gas pipeline under the Baltic Sea, connecting Russia to the German Baltic coast.
It runs parallel to a former Nord Stream gas pipeline and would double its capacity, to 110 billion cubic meters of gas per year. This means that the Russian state energy company Gazprom can send gas to the European gas pipeline network without using the existing gas pipelines crossing Ukraine and Poland.
WHY DOES RUSSIA WANT THE PIPELINE?
State-owned gas giant Gazprom says it will meet Europe’s growing need for affordable natural gas and complement existing pipelines through Belarus and Ukraine.
Nord Stream 2 would provide an alternative to Ukraine’s aging system which Gazprom says needs updating, reduce costs by saving on transit fees paid to Ukraine and avoid episodes such as brief gas cuts in 2006 and 2009 due to price and payment disputes between Russia and Ukraine.
Europe is a key market for Gazprom, whose sales support the Russian government’s budget. Europe needs gas because it replaces decommissioned coal and nuclear power plants before renewable energy sources such as wind and solar are sufficiently developed.
GERMANY’S RESPONSE TO THE CRISIS
The pipeline was filled with gas but was awaiting approval from Germany and the European Commission.
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On Tuesday, German Chancellor Olaf Scholz suspended the certification process for the Nord Stream 2 gas pipeline after Russia recognized separatist-held areas in eastern Ukraine.
Germany’s utility regulator was reviewing the pipeline to make sure it complied with EU fair competition regulations. It is this approval process that Scholz announced on Tuesday that he was suspending.
Germany was required to submit a report on how the pipeline would affect energy security, and Scholz said that report was withdrawn.
Although he initially supported the project, Scholz warned that Russia would face “serious consequences” and that sanctions should be ready in advance. Germany had agreed with the United States to act against Nord Stream 2 if Russia used the gas as a weapon or attacked Ukraine.
THE US POSITION ON NORTH STREAM 2
Despite strong objections, Biden waived sanctions on the pipeline operator as it neared completion in exchange for Germany’s agreement to take action against Russia if it weaponized the gas or attacked Russia. ‘Ukraine.
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Experts at the time warned that Germany’s deal to allow Russia to supply natural gas would reward Russia for its bad behavior after annexing Crimea in 2014.
European NATO allies and Ukraine, meanwhile, opposed the plan dating back to before the Biden administration, saying it increased Europe’s dependence on Russian gas and gave Russia the possibility of using gas as a geopolitical weapon. Europe imports most of its gas and gets around 40% of its supply from Russia.
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Republicans and Democrats in Congress – in a rare agreement – have long opposed Nord Stream 2.
WILL NORD STREAM 2 SUSPENSION MAKE EUROPEANS FREEZING THIS WINTER?
The approval process was not going to be completed in the first half of 2022, meaning it would not help meet heating and power needs this winter as Europe faces a gas shortage.
The winter shortage continued to fuel concerns about dependence on Russian gas. Russia has refrained from selling gas in the short term – even though it has fulfilled long-term contracts with European customers – and has not filled its underground storage in Europe.
Russian President Vladimir Putin said the shortage underscores the need to quickly approve Nord Stream 2, raising concerns about Russia’s use of the gas to gain influence over Europe.
COULD RUSSIA CUT OFF THE GAS TO EUROPE IN REPRESENTATION?
Many analysts believe that Russia is unlikely to cut off supplies to Europe given the interdependence between the European market and Gazprom.
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Meanwhile, the Ukrainian crisis, in addition to the winter shortage, has already given European governments more reason to find their gas elsewhere, for example thanks to liquefied natural gas brought by ship from the United States, Algeria and other places.
The Associated Press contributed to this report.