Europe's Nord Stream Pipeline - the tug of war between US and Russia

The politics behind the Nord Stream pipeline - 2022 update

Europe's Nord Stream Pipeline - the tug of war between US and Russia

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• The story: The US has issued a fresh warning saying that if Russia attacks Ukraine, it will stop the Nord Stream Pipeline. This is an extreme warning, never issued before.
• Nord Stream Pipeline: This is the longest subsea pipeline, an export gas pipeline running under the Baltic Sea carrying gas from Russia to Europe. It consists of two pipelines, which have two lines each. The Nord Stream 1 was completed in 2011 and runs from Vyborg in Leningrad (Russia) to Lubmin near Greifswald, Germany. The Nord Stream 2 which runs from Ust-Luga in Leningrad to Lubmin was completed in September 2021 and has the capacity to handle 55 billion cubic meters of gas per year.

1. The twin pipelines together can transport a combined total of 110 billion cubic metres (bcm) of gas a year to Europe for at least 50 years.
2. The Nord Stream crosses the Exclusive Economic Zones (EEZs) of several countries including Russia, Finland, Sweden, Denmark and Germany, and the territorial waters of Russia, Denmark, and

• Objection against the pipeline by European countries: In Germany, the pipeline connects to the OPAL (Baltic Sea Pipeline) and NEL (North European Pipeline) which further connects to the European grid. According to environmentalists, it does not fit in with German efforts to cut dependence on fossil fuels and fight climate change. The Nord Stream 2 has not yet started operating because Germany says it does not comply with German law and has suspended its approval. The project is also awaiting approval from the European Commission. It will make Europe too dependent on Russia, increasing Russia’s influence in Europe and there is concern that Russia could use it as a geopolitical weapon.

1. Ukraine has objected because it will lose around US $ 2 billion in transit fees once the pipeline becomes operational and as long as Russian gas transits through Ukraine, Russia is unlikely to intervene and cause instability in Ukraine and Europe will stay invested in its security.
2. Countries like Poland and Belarus also stand to lose transit fees and hence oppose the pipeline as it will bypass existing pipelines running through them.

• Importance for Europe: Europe requires more than 100 billion cubic metres (bcm) of natural gas each year and around 40% of its gas comes from Russia. Europe has become more dependent on gas imports because of a decrease in domestic gas production. Reducing dependence on Russian gas is difficult as there are no easy replacements. Many European businesses have large investments in Nord Stream 2 and there is pressure on governments from these businesses. Reduction in gas from Russia would increase already high gas prices and that would not be popular domestically.
• Importance for Russia: Around 40% of Russia’s budget comes from sales of gas and oil. The Nord Stream 2 is important for Russia because it eliminates the risks related with sending gas through transit countries, cuts operating costs by doing away with transit fees and gives direct access to its most important European customer, Germany. It increases Europe’s dependence on Russia while giving it a reliable customer.
• Summary: The pipeline is important for Russia and Europe both. Some type of deal satisfying all the parties could provide win-win situation for the crisis.
• EXAM QUESTIONS: (1) Discuss the importance of Nord Stream Pipeline for Europe and Russia. Suggest ways to solve the 2022 crisis. (2) Discuss the political developments in Ukraine. Should they be of any concern to India?

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