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Nord Stream pipeline and the Russia-Ukraine issue

Context:

German Economic Affairs Minister warned in an interview of “severe consequences’ for the Nord Stream 2 gas pipeline from Russia to Germany if Moscow attacked Ukraine.

Relevance:

GS-II: International Relations

Dimensions of the Article:

  1. About the Nord Stream 2 Pipeline (NS2P) project
  2. About the Strains in Nord Stream 2 completion
  3. Energy security dilemma in EU – Positive and Negative

About the Nord Stream 2 Pipeline (NS2P) project

  • The Nord Stream 2 Pipeline (NS2P) project is the successor to the Nord stream 1 system which is already completed. Together with NS2P, it will supply 110 billion cubic metre of gas a year to Germany.
  • The Nord Stream pipeline is a 1,200-km pipeline to carry 55 billion cubic metres of gas per year, that runs from Ust-Luga in Russia to Greifswald in Germany through the Baltic Sea.
  • Once the NS2P project is completed it would bypass Ukraine and deprive it of a significant transit fee of around $ 3 billion per year.
  • It is expected to increase Europe’s dependence on Russia for Natural Gas, currently EU (European Union) countries already rely on Russia for 40% of their gas needs.
  • It can be easily seen as a generational geopolitical win for Russia and a catastrophe for the United States and its allies.

About the Strains in Nord Stream 2 completion

  • The Primary concern is that, once operational, the project would render more leverage and bargaining power to Russia while dealing with Europe and its energy market.
  • Ukrainian authorities call the project a ‘dangerous geopolitical weapon’ in the hands of Russia.
  • There is also strong opposition from the United States and most of the European countries (except for Austria, Germany, Hungary and the Netherlands).
  • Some political commentators share the view that Russia is trying to use Nord Stream 2 as a political weapon to put pressure on European security and ‘undermine the democratic resilience of European institutions’.
  • Throughout its short history, the project has undergone a series of sanctions and controversies, morphing itself into the source of contention and political battleground.
  • At the end of 2019, U.S. President Donald Trump had signed a law that imposed sanctions on any EU company that was involved in completing the Nord Stream 2 pipeline. Many European politicians, including then German Chancellor Angela Merkel, were opposed to the ‘extraterritorial sanctions’, stating that they were able to decide their own energy policies without an ‘interference in autonomous decisions taken in Europe’.
  • In July 2021, the U.S. and Germany reached an agreement to allow completion of the Nord Stream 2 pipeline. Besides, the agreement aimed to invest more than €200 million in energy security in Ukraine, as well as sustainable energy across Europe.

Energy security dilemma in EU – Positive and Negative

  • In the winter of 2021, Europe is facing a ‘perfect storm’ in its energy market, whereby wholesale energy prices have more than doubled in 2021, and there is a limited supply of fossil fuels altogether.
  • Russia is blamed for an intentional decrease in gas supplies to Europe, aiming to speed up the controversial Nord Stream 2 gas pipeline by European Union (EU) market regulators.
  • There is a ‘silver lining’ in the current energy crisis in Europe though, since it could provide additional incentives for green energy investments and production of green hydrogen.

-Source: The Hindu

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December 2022
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