Nord Stream 2 pipeline would defeat purpose of Energy Union

Written by Petras Auštrevičius on 2 May 2016 in Feature
Feature

Nord Stream 2 is the embodiment of hybrid warfare and would put Energy Union at risk, argues Petras Auštrevičius.

Energy Union was launched by the European Commission with the intention of developing consolidated action that would provide benefits to everyone involved: secure energy for consumers at affordable prices, competitive market opportunities for suppliers and strengthened solidarity and trust between EU member states.

However, Energy Union is currently at a crossroads as its goals are being ruthlessly contested by our big neighbour to the East, Russia. One of the considerations behind the development of Energy Union is the fact that Russia has used its oil and gas monopoly as a political weapon orchestrated through Gazprom and other Kremlin sidekicks. 

The embodiment of this hybrid warfare is the Nord Stream 2 gas pipeline project, which is set to begin supplying gas from the Russian Federation to Germany by the end of 2019, duplicating the existing Nord Stream 1 pipeline. Nord Stream 2 could rightfully be called a killer-project as it would irreversibly sabotage the vision and key objectives of European Energy Union.


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The EU is heavily dependent on imported natural gas. And while Russia's share has decreased rather dramatically over recent years it still remains very high: Russia supplies 39 per cent, Norway 30 per cent and Algeria and Qatar far less. Twelve EU member states rely primarily on one source, with Russia supplying between 75-100 per cent of their supplies. 

One of the key goals of Energy Union was to address such problems and achieve greater energy diversification by finding alternative sources and routes - ideally, at least three gas suppliers for every EU member state. 

This is an opportune moment to move towards alternative ways of addressing gas demand and to seek more geopolitically sound energy partnerships with reliable partners outside the EU. 

It has been estimated that Europe's gas deficiencies can be largely covered by the import of Liquid Natural Gas (LNG) from Australia and the United States and even Algeria, alongside investment in domestic or biogas production. 

Nord Stream 2 does not correspond to the Energy Union's goals as it represents neither source nor supply diversification. On the contrary, it will increase our dependence on Russia, concentrating 80 per cent of Russian gas imports through one route and increasing Gazprom's share of the German market from 40 per cent to over 60 per cent.

In order to stay resilient, the EU needs to become more cooperative and interconnected. The aim of this killer-project is to open up old divisions by destroying recently installed interconnectors in Central Europe and by creating winners and losers - those that will be directly supplied by Nord Stream 2 and those bypassed by it.

Ukraine's European future would also be put at risk as Nord Stream 2 would create the conditions to cut off the gas that currently transits through the country, thus depriving Kyiv of around $2bn annually in transit revenues.

This, money would instead pile up in the bank accounts of corrupt Russian officials and businessmen. The Yamal pipeline via Poland could also be endangered while the potential of LNG terminals in both Lithuania and Spain would be jeopardised.

We cannot isolate economics from politics and price should not be the single decisive factor in this case.

Developing infrastructure for alternative energy sources, boosting energy production within the EU and building new pipelines and interconnections require extra expenditure on new technologies and innovation. This is an investment towards a common and secure energy future. 

Energy security is a key pillar of the European Energy Union strategy and I believe that Nord Stream 2 would eliminate any prospect in achieving a competitive and resilient internal EU gas market, free from political manipulation.

 

About the author

Petras Auštrevičius (ALDE, LT) is a member of Parliament's foreign affairs committee

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