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Nord Stream 1 Gas Link

Context:

Nord Stream 1 is a 1,224-km underwater gas pipeline from Vyborg, Russia, to Lubmin, Germany. Nord Stream 1, Germany’s main source of Russian gas, was shut down July 11 for maintenance. European countries fear Russia will extend the temporary gas supply suspension in retaliation for current sanctions.

Relevance:

Mains Paper 2: International relations: Important International Institutions, Bilateral, regional and global groupings

Mains Question:

What are the two Nord Streams that have recently made headlines? Are they a strong pillar for Russia’s strategic importance in Europe? Comment.


 

Nord Stream 1 and 2

  • Nord Stream 1 is a 1,224-kilometer underwater gas pipeline that connects Vyborg, Russia, to Lubmin, Germany, via the Baltic Sea.
  • According to Reuters, the pipeline, which is majority owned by the Russian energy giant Gazprom, is the primary route through which its gas enters Germany.
  • According to Reuters, it transports 55 billion cubic metres of gas per year, the majority of which goes directly to Germany, while the remainder travels west and south through onshore links to other countries and into storage caverns.
  • During its November 2011 inauguration, former German Chancellor Angela Merkel stated that the 7.4-billion-euro pipeline would pave the way for a “safe, sustainable partnership with Russia in the future.”
  • Germany is Russia’s largest European gas consumer, and the majority of it is delivered via the Nord Stream Pipeline. According to Deutsche Welle, its share of Russian gas supplies was 55 percent in 2021 and is now 35 percent.
  • Nord Stream 2 was completed in September 2021 and has the capacity to handle 55 billion cubic metres of gas per year once operational, running from Ust-Luga in Leningrad to Lubmin.
  • For at least 50 years, the twin pipelines can transport a total of 110 billion cubic metres (bcm) of gas to Europe.
  • The Nord Stream pipeline crosses several countries’ Exclusive Economic Zones (EEZs), including Russia, Finland, Sweden, Denmark, and Germany, as well as Russia, Denmark, and Germany’s territorial waters.
  • The pipeline connects to the OPAL (Baltic Sea Pipeline) and NEL (North European Pipeline) in Germany, which connects to the European grid.

Objections to the Pipelines:

  • According to environmentalists, it contradicts German efforts to reduce reliance on fossil fuels and combat climate change.
  • Nord Stream 2 has yet to begin operations because Germany claims it violates German law and has suspended its approval. The European Commission must also approve the project.
  • The strategic objection, particularly from the EU, is that it will increase Europe’s reliance on Russia, thereby increasing Russia’s influence in Europe.
  • Furthermore, there are fears that Russia will use it as a geopolitical weapon.
  • Ukraine has objected, claiming that once the pipeline is operational, it will lose approximately USD 2 billion in transit fees.
  • Countries such as Poland and Belarus stand to lose transit fees as a result of the pipeline, which will bypass existing pipelines running through them.

Importance of the pipelines:

  • Every year, Europe consumes more than 100 billion cubic metres (bcm) of natural gas, with Russia accounting for roughly 40% of that total.
  • Europe has become more reliant on gas imports in recent years as domestic gas production has declined. It is difficult to reduce reliance on Russian gas because there are no easy replacements.
  • Many European businesses have made significant investments in Nord Stream 2, putting pressure on governments. Finally, a reduction in Russian gas would raise already high domestic gas prices, which would be unpopular.
  • In Russia, which has the world’s largest natural gas reserves, gas and oil sales account for roughly 40% of the country’s budget.
  • Nord Stream 2 is significant because it eliminates the risks associated with sending gas through transit countries, reduces operating costs by eliminating transit fees, and provides direct access to Germany, its most important European customer.
  • It increases Europe’s reliance on Russia while providing it with a reliable customer.

The European Attempts to Handle the dependence

  • Despite efforts to reduce reliance on Russian gas, Germany, Europe’s largest economy, remains heavily reliant on it.
  • The Nord Stream 2 pipeline, which was scheduled to be completed in September 2021 and would have doubled the flow of direct Russian gas to Germany, was suspended in February in response to Ukraine’s invasion.
  • However, Nord Stream 1 continued to be used, despite Moscow reducing its gas flow by 60% in mid-June.
  • According to Reuters, Russia blamed the reduction in supplies on the delayed return of a turbine that was being serviced by Germany’s Siemens Energy in Canada.

What are Europe’s alternative sources of energy?

  • There has been growing concern that additional restrictions on European gas supplies may be imposed, in addition to the scheduled maintenance that has already been imposed.
  • European countries rely on Russian energy for their cold winters, but they now fear that Russia will weaponize their dependence in response to sanctions imposed as a result of the Ukraine conflict.
  • If Nord Stream 1 does not restart its supply to Europe, Europe will not have enough gas by the end of the year.
  • As an alternative energy source, European countries have increasingly turned to the United States, from which they purchase liquefied natural gas (LNG) delivered by ship.
  • Because ship-delivered gas is far more expensive, there are also efforts to obtain non-Russian pipeline gas from Norway and Azerbaijan.
  • While EU countries had previously sought to phase out fossil fuels in favour of renewable energy sources, many are now turning back to coal to address the energy crisis. Despite efforts to phase out coal entirely by 2030, Germany’s parliament passed emergency legislation to reopen their old coal plants for electricity production.
  • According to The Guardian, Economics Minister Habeck called the change “painful but necessary,” and the country’s environment-friendly Green Party supported it.

Canada stepped in to help Germany

  • To assist Berlin in its energy crisis, the Canadian government announced that it would circumvent its own sanctions and return to Germany a repaired Russian gas turbine required for the Nord Stream 1 gas pipeline.
  • While the Canadian government announced new sanctions against Russia’s industrial manufacturing sector, it also announced the introduction of a “time-limited and revocable permit” to allow the return of the key component.
  • Gazprom blamed the delayed return of the turbine last month for the reduced supply of gas through the pipeline, which was required for the scheduled maintenance work.
  • Without a supply of natural gas, the German economy will suffer greatly, and Germans will face the prospect of being unable to heat their homes as winter approaches.
  • The Ukrainian government has expressed its displeasure with this decision, stating on Sunday that the return of the Russian gas turbine would “strengthen Moscow’s sense of impunity.”
  • It has asked Canada to reverse its decision, claiming that it would violate sanctions against Russia.

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