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The controversy of the Nord Stream 2

The new gas transmission pipeline would not only improve the reliability of gas distribution but also facilitate the progress of the European gas market.

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Much has been said about Nord Stream 2, and not an awful lot of it has been positive. In fact one online source referred to it as the embodiment of the hybrid warfare being conducted by parties conniving against the Energy Union.

Yet those who protest do so as records last year hit an all-time high for gas exports from Russia to Germany. This year we’re seeing more of the same – already an increase of 2bn m3 – up almost 20% – in the first quarter of 2016 compared to last year. In that light the importance of the gas pipeline, set to begin supplying gas from the Russian Federation to Germany in three years’ time, is clear. The issue supporters say is political for one group, and business for another.

A meeting between Gazprom Management Committee and the German Vice Chancellor and Minister for Economic Affairs and Energy discussed the need to increase supply. Alexey Miller and Sigmar Gabriel stressed the importance of the Nord Stream 2 project. They said that not only would the new pipeline improve the reliability of gas delivery but it would also facilitate the development of the European gas market.

A letter was reportedly issued to EU President Jean-Claude Juncker from a number of states making up the Videgrad Group. They argued the project would be destabilising.

Not so, say Nord Stream 2. It issued a statement contradicting the letter’s claims. “EU energy supply has never been more diverse than it is today, in contrast to the letter’s claim of threats to security of supply and diversification of sources, suppliers and routes.” It said the line will increase security of gas supply for the whole EU and “precisely those countries who worry most about dependence on one gas supplier have the most to gain from projects like Nord Stream 2, which will enable them to procure more gas through a competitive internal market and from more diverse supply routes.”

In a bid to appease the dissenting voices, Germany said it would only go ahead if Russia does not cut off gas flows to Ukraine and eastern Europe when the transit contract comes to an end in 2019. Nord Stream 2 says that two thirds of the gas will flow towards the Central European Gas Hub in Baumgarten, Austria. “This hub offers ideal connectivity and can handle large flows to central, east, southeast and south European countries, boosting their gas markets to comparable levels of liquidity and competiveness as in northwest Europe.”

The crux of the matter is that it will be decided not by the EU but the permitting authorities of the five countries whose waters would be crossed by the pipeline: Russia, Finland, Sweden, Denmark and Germany. While “the world has changed since the first Nord Stream was launched in 2008” ( Alan Riley at City Law School London) it doesn’t disguise the fact that Nord Stream 1 faced significant opposition and was still built, and is still working today.

There are still many mountains to climb in this project and the outcome is uncertain. However someone needs to find an answer to the question posed by the Nord Stream Consortium Head of Communications Ulrich Lissek who asked, “Do we have to stop every economic exchange with Russia? Why is so much importance attached to this project? That’s not very fair.”