Nord Stream 2, Energy, Europe and the Ukraine Crisis : Daily Current Affairs

Relevance: GS-2:Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

Key Phrases: Nord Stream 2, Ukraine Crisis, Geopolitics around Nord Stream 2, US and EU and Gas, Germany’s Intervention, Erope concerns over Nord Stream 2, Ukraine Concerns Over Nord Stream 2

Why in News?

Recently, Russia has announced withdrawal of some troops from the Ukraine border, but US concerns remain around the Russia-to-Germany Nord Stream 2 gas pipeline.
Nord Stream 2 gas pipeline is perceived by some as a geopolitical weapon.

About Nord Stream 2

Nord Stream 2 is a 1,200-kilometer pipeline under the Baltic Sea which will take gas from the Russian coast near St Petersburg to Lubmin in Germany.
It cost €10bn (£8.4bn) to build and was completed September 2021.
The Russian state-owned energy giant Gazprom put up half of the cost and western energy firms such as Shell and ENGIE of France are paying the rest.
Although it is awaiting German certification to become operational.
Nord Stream 2 runs parallel to an existing gas pipeline, Nord Stream, which has been working since 2011.
Together, these two pipelines could deliver 110bn cubic meters of gas to Europe every year. That is about two-thirds of all the gas that European Union countries use annually.

Supporter of the Project

Clearly, Russia and Germany both support the project.
- But in Berlin, especially against the backdrop of the newly formed government consisting of three different parties, there have repeatedly been different views on whether and when Nord Stream 2 should be launched.
- The Greens, for example, reject the project for geostrategic and climate policy reasons.
- The liberal FDP sees a need for action.
In principle, Germany relies on Russian gas, considered to be a transition fuel in the green transition.
The pipeline would be a relatively cheap way to obtain the raw material and cover the country's energy needs.
Moscow would benefit from this, as it could sell its gas, which would bring financial returns.
About 55 billion cubic meters of gas are to be delivered from Russia to Germany through the Baltic Sea every year.
According to the operating company, this could supply 26 million households.

Europe Concerns

Ukraine is angry with the pipeline because it bypasses the country and thus denies transit fees for Russia’s gas exports.
The project could reduce the status of the pipelines that already exist on the land route, and important revenues generated by transit fees could thus be lost.
It has also raised fears that Russia could cut off gas supplies to Ukraine without endangering its own gas exports to Europe.
It could give Russia complete dominance over gas supplies to Europe, and leverage and influence over these countries.
It has also awakened old fears in some countries about Russia and Germany coming together against the rest of Europe.
Some European Union members have security concerns about Russian presence in their waters, required to guard the 1,222-km pipeline that goes under the Baltic Sea past Finland, Sweden, and Poland before entering Germany.

America’s Concerns

The United States believes the pipeline could give Russia too much leverage and influence over Europe.
It increases the threat of a Russian invasion of Ukraine, and hinders its own efforts to contain Russian leader Vladimir Putin.
The US has been opposed to the project from the start, but Germany under then Chancellor Angela Merkel pushed ahead with it.
- Despite the strain in Moscow-Berlin ties over the Alexei Navalny affair - Merkel blamed the Kremlin for the attack on the Russian opposition leader.
Even before the current crisis over Ukraine, the US had imposed some sanctions against the pipeline project.,
- Although in May 2021, the Biden Administration waived two crucial sanctions that would have torpedoed it entirely, in a bid to give diplomacy a chance.
In July 2021, President Joe Biden and Merkel sat down to talk, agreeing in broad terms that Russia would not be allowed to use the pipeline as a weapon against Ukraine.
But Merkel also said the two sides had “come to different assessments as to what this project entails”.
The two leaders were seen to have prevented a breakdown of the transatlantic alliance that US sanctions against Germany and other supporters of the pipeline in Europe - notably France, Austria and the Netherlands - might have brought about.
- But some also saw it as a surrender by the US.
Over the last few weeks, Biden and other US officials have been vocal that if Russia invades Ukraine, Nord Stream 2 would be among the first casualties .
According to some analysts, the US sees the coming together of Russia and Germany in an economic partnership as a precursor to upending its role as the guarantor of security in Europe.
The US sees the Nord Stream 2 as a threat to an arrangement that has existed from the end of World War II and the start of the Cold War.

German Intervention

Olaf Scholz (Chancellor of Germany) undertook the US visit in response to criticism at home and abroad that he had been “missing in action” during the Ukraine crisis.
- Even French President Emmanuel Macron took the lead with his shuttle diplomacy between Ukraine and Russia.
Scholz held out the reassurance that Germany was not about to break away from its NATO allies
But it was noticed that he did not utter the word Nord Stream during his visit.
Like Macron, Scholz also held talks with Ukrainian President Volodymyr Zelensky and proceeded next to Moscow for talks with Putin.
Even as they reiterated their different positions and demands, Russia announced on the same day that it had “partially” withdrawn troops from the Ukrainian border.
It is unclear if Russia’s troop withdrawal had anything to do with Scholz, but it has helped salvage some of his image as a leader of Europe.

US, EU and Gas

The US’s insistent opposition to Nord Stream 2 over three administrations - Obama, Trump and now Biden – has revived discussion on an old question asked whenever the US enters an arena of conflict – “is it all about the oil”, or in this case, gas?
The EU imports less than 5% of its gas from the US (the top four suppliers are Russia at 41%, Norway at 16%, Algeria at 7.6% and Qatar at 5.2%, according to 2019 figures).
But as a net exporter of LNG since the middle of the last decade, the US wants to expand its markets and reach in the continent.
According to one estimate, 23% of US exports of gas are to the EU now, and in 2021, hit a high of 21 billion cubic meters (bcm).
Among the buyers are France, Italy, Spain, Greece, Portugal and a host of smaller countries.
US exports are seen by some as vital to the diversification of Europe’s energy supplies, and its energy security.
In January, in a war-like atmosphere, Europe imported more gas from the US than from Russia.

Conclusion

Bypassing Ukraine sharply reduced the country’s leverage with Russia and reduced its income. However, Europe and Germany depend on Russia’s gas, with this current conflict exposing vulnerabilities, meaning Nord Stream 2 has become both a deterrent to war in Ukraine and a punishment option in the event there is one.

Mains Question:

Q. Evaluate the geopolitics surrounding the Nord Stream 2 pipeline. (250 Words)

Source: Indian Express