Five leading energy companies from the EU are cooperating with Russia’s Gazprom on the Nord Stream 2 pipeline. Shell, Uniper, OMV, Engie, and Wintershall have committed up to almost €1bn each. European consumers are the main beneficiaries of more capacities for gas import.
Nord Stream 2 allows the most direct and cost-efficient access to the vast new Bovanenkovo gas field. The so called Northern Corridor is over 2000 km shorter than other routes.
Nord Stream 2 is also good news for climate policies as natural gas remains the fastest and most economical solution for meaningful CO2 reduction. Gas and renewables go hand-in-hand: for example Germany has a comparatively high share of renewables, but the UK achieved much faster CO2 cuts by switching from coal to gas. The EU still uses coal for about 25 per cent of its power generation, while gas accounts for just 16 per cent.
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The challenge is that domestic sources are depleting. The European Union is set to lose 50 per cent of its gas production within the next 20 years. Without sufficient gas supply, cheap coal will continue to outcompete gas. Therefore, new import capacities are needed.
A new study by ewi Energy Research & Scenarios concludes that with Nord Stream 2, EU wholesale gas prices in 2020 will be on average eight per cent lower. Also Central and South Eastern Europe will benefit from cheaper gas.
Today, Europe’s gas supply is more diverse than ever before: gas comes by pipelines from North Africa, Norway and Russia, and in the future it may also come from the Caspian and Eastern Mediterranean. Over 20 terminals across Europe have opened the door for liquefied gas from world markets.
No single supplier can achieve and exploit a dominant position as other suppliers would step in immediately. And thanks to the fast-growing number of interconnections, gas imports benefit all consumers in the EU.
It is not in line with today’s reality to claim that a pipeline like Nord Stream 2 would increase political dependency or put parts of the EU at a disadvantage.
It is quite simple: more import infrastructure is better for all the EU’s consumers. And it is risk-free for European taxpayers: Nord Stream 2 does not involve any subsidies. On the contrary, it is a significant driver for jobs, growth and prosperity. Nord Stream 2 has already committed investments worth over €4bn in the European economy.
The implementation of our project involves over 200 companies from 17 countries. In the 60th anniversary year of the Treaty of Rome we should remember that if history teaches us anything, it is that economic cooperation brings stability, prosperity and opportunities.
The Rome Treaty was largely about cooperation in energy and natural resources. It made former opponents overcome their troubled history. The same lesson is still valid today: energy cooperation between the EU and Russia is of course not a threat, it is a great opportunity for both sides.