Nord Stream 2: The Project Dividing Europe

  Written by Felix Schulz, Member of the Editorial Team of Libertas    Nord Stream 2 is probably one of the most disputed projects in the European Union. To make matters worse, it is also one of the most complex issues. It touches upon economic, geopolitical, ethical and legal dimensions and involves actors with opposite interests.   After over a decade of negotiations and construction, the first Nord Stream gas pipeline started operating in 2011. The company Nord Stream, which operates the pipeline, delivered since then up to 55 billion m³ of natural gas annually to the German mainland. However, the same year the Nord Stream AG started evaluating the possibility of extending the project and adding two additional lines. This project was supposed to increase the overall annual capacity up to 110 billion m³. Gazprom signed an agreement in 2015 witch Royal Dutch Shell, E.ON, OMV, and Engie for the two additional pipelines. That is the Nord Stream 2 project as we know today. But why is the project controversial among EU members and beyond? First of all, the new project would be able to meet the entire natural gas demand of the EU. Therefore, critics fear a major dependence on Russian natural gas, which reduces diversification drastically. Second, transit countries like Poland, Slovakia but also Belarus and Ukraine would lose billions in revenues from transit fees. The loss could destabilize the two economically weak European neighbors even further.  Third, the United States also worry about further dependence of the EU on Russian natural gas. That is why they introduced sanctions on companies, which are involved in building the Nord Stream 2 pipeline. But the United States have another intrinsic motivation. Due to the domestic shell gas revolution, they aim at selling their own abundantly produced gas to the EU. Therefore, Nord Stream 2 is just considered as another competitor on the European gas market. Fourth, the project has become even more politicized after the attack on the Russian opposition leader Alexei Navalny and his subsequent conviction. According to critics, it is unethical to cooperate with Russia economically, while its opposition is silenced.   Considering the reasons above, it is utterly clear, that there is tremendous criticism on the EU level against Nord Stream 2. The European Parliament voted last January once again against the project. In the resolution, the parliamentarians also urged the EU Member States to introduce sanctions against Russian oligarchs. The European Commission also voiced harsh criticism. According to the Commission, the endeavor undermines the completion of the Energy Union and counters its ambitions for decreasing dependence on individual supplier countries.   Despite all the criticism, the German government was long in favor of the project. The argument has always been economical. Nord Stream 2 would reduce natural gas prices and deliver a constant flow of natural gas to the federal republic. However, a study by the “German Institute for Economic Research” from 2018 suggests that importing natural gas through Nord Stream is not necessary. According to the study, the amount of imported natural gas is already sufficient – in Germany and the EU. As a consequence, Germany is now in a difficult situation. Either it continues to support Nord Stream 2, which would infuriate EU Member States and its transatlantic ally or it abolishes the project, leaving an even wider gap between the West and Russia.   So what should Germany do? First, one has to assess the likelihood of completion of Nord Stream 2. With the new Biden administration it is improbable that the sanctions in place will be lifted any time soon. The president has been clear that he will defend US interest against Russia. Therefore, for now, no European company will be involved in laying pipelines on the sea floor or insuring such ventures. Second, Germany is becoming increasingly isolated in the EU. Even important partners like France are against the project since Russia convicted Alexei Navalny. Third, Germany called for more solidarity amongst EU members during the corona pandemic. But solidarity for eastern European states and the Russian opposition has never been a topic for the government, when talking about Nord Stream 2. Hence, it seems quite hypocritical to rely on the notion of solidarity only when it suits one’s own interests.   There is no easy solution to the complex issue of Nord Stream 2. But let’s hope that the German government will truly listens to the European community and its transatlantic partners. Because one thing is clear: Nord Stream 2 has many dimensions and focusing only on the economics does not meet the challenges we deal with.   About the author:  Felix Schulz is a young liberal from Germany. Since 2015, he is a member of the FDP in Germany and joined the young liberals in the beginning of the year, where he is also a member of the editorial team. Just after his studies, he went to Ukraine for the Friedrich-Naumann-Foundation.