Nord Stream 2: a project that should not exist

Though the combat operations area of the Russo-Ukrainian war is limited to the territory of Ukraine, Russia deploys warfare far beyond the borders of Ukraine. Europe is involved in the full-scale war, as it resists the aggressor on the economic and diplomatic front. The gas issue is one of the battlefields that Russia uses in order to blackmail European countries and destabilise the situation in the region.

Since the 70s during the twentieth century, Europe bought gas from the Soviet Union and Russia later. In 2022, 40% of the gas Europeans received came from the Russian Federation. Today, several gas pipelines are running from Siberian deposits. Gas comes through the Baltic and Black Seas seabed to the north and south of Europe and through the mainland territories of Eastern European countries to Central Europe. One of the stages for implementing Russian energy projects in Europe was the construction of the “Nord Stream” (hereinafter NS). It embraces the first and second phases of the gas pipeline through the bottom of the Baltic Sea between Russia and Germany (they are widely referred to as “Nord Stream 1” and “Nord Stream 2”).

The construction of NS2, which began in 2011, was criticised due to the increased influence of the Russian Federation on the region and the deliberate bypassing of the territory of Ukraine. The latter allows Russia to cut off gas supplies to Eastern European countries while not stopping the “feeding” of Western Europe.

In 2022, Gazprom, Russia’s largest producer and exporter of liquefied natural gas, stopped supplying gas to Europe, contrary to agreements with buyer countries. It uses various excuses to accuse the other parties of the agreement of the failure of supplies. It is important to understand that the actions of Russia are based on the political motivation rather than the economic one, since the Kremlin uses gas as a weapon to put more pressure on and manipulate a number of countries. This treatment of the Russian Federation is called weaponization of gas. In this storyline, NS2 plays a key role as a tool of Russian influence on Europe.

How Europe “got hooked” on Russian gas

In 1968, Austria signed the first contract for gas supply from the USSR to Europe. In exchange for Siberian gas, the latter provided the Union with gas pipelines and granted loans for its construction. Eventually, Germany entered into a similar agreement under the scheme of the pipes in return for gas. The foundations of strong ties between Germany and the Soviet Union, and then Russia as the successor of the USSR, were laid. Thus the extensive system of gas pipelines connected to Siberian deposits appeared across Europe. Over time, it became a key gas duct in some countries. For instance, the share of Russian gas import in North Macedonia, Bosnia and Herzegovina, and Moldova was as much as 100% as of 2020.

Meanwhile, Germany was the leader in Russian gas consumption among the EU’s biggest economies. A nuclear power phase-out was one of the factors that contributed to gas dependence. Despite the global economic crisis, the movement against nuclear power gained momentum after the Fukushima nuclear disaster. Back in 2011, Germany used to have 17 operating nuclear reactors, yet now only 3 of them are working. They had been scheduled to decommission by the end of 2022, but later it was decided to continue using them.

“Energiewende” (Ger. Energy transition) is the German term that means the renewable energy transition, gradual nuclear power curtailing and the downshifting of fossil fuels. This decision must create a sustainable, self-sufficient energy future for the country that will eliminate its dependence on fuel import.

Germany is currently 95% dependent on gas import. Although this natural resource is supplied by Norway and the Netherlands, the largest fraction belongs to Russian gas. As of May 2022, it accounted for about half of the import (46%).

The number of gas pipelines in the West began to increase after the first contract had been signed between Europe and the USSR. Built in the 1960s-1980s, the Bratstvo pipeline (also known as Trans-Siberian pipeline, Brotherhood pipeline, or Urengoy-Pomary-Uzhhorod pipeline — tr.) was the first Siberian pipeline that runs through Ukraine, Slovakia, and Czech Republic. Its branches also reach other European countries, such as Italy, France, and Germany.

The construction of some other gas conduits started soon afterwards. The Yamal-Europe pipeline that passes through the territories of Belarus and Poland, was finished in 1999, and Blue Stream that delivers gas under the Black Sea to Turkey, was built in 2001.

Nord Stream 1, the new gas pipeline, has been working since 2012. It was supposed to deliver gas from the territory of the Russian Federation straight to Germany across the bed of the Baltic Sea. It must have increased the volume of fuel supply as well. This project was less profitable than the alternative decision to lay another mainland gas line paralleling the existing Bratstvo pipeline. However, Russia saw the benefit of NS1 in delivering gas to the western countries bypassing Eastern Europe.

Therefore, after NS1 had been launched, in 2010, work began on NS2. This pipeline was expected to lie parallel to NS1 and completely duplicate the capacity of Ukrainian and Belarusian mainland lines. The announcement of the project made the world community question the true purpose of the NS2 construction.

From that point on, countries divided into two camps.

Germany and France noted that the new pipeline is essential for securing energy supply due to increasing gas prices and risks of cold winters. The US and some other European countries, particularly Ukraine, stood up against the NS2 construction, as it increased Europe’s dependence on Russia.

Due to allowing gas transit through its territory, Ukraine received significant revenues for the state budget. In 2020, they amounted to 2 % of GDP. At the same time, Ukraine has not been buying gas from Russia since 2015: we managed to get off Russian gas and establish a reverse fuel supply from European countries. And yet, Ukraine remains dependent on the stable operation of the European gas market.

Moreover, for Ukraine, gas transit is a security issue. When gas was supplied through our territory, both Europe and Russia were guarantors of national security. It basically reduced the probability of a full-scale invasion of the Russian Federation into Ukraine. As one can see, the shift of gas transit from the ground gas pipeline to NS1 made an invasion a reality.

Eventually, in November 2022, Marco Buschmann, Federal Minister of Justice of Germany, admitted that after the annexation of Crimea, the adherence to the NS2 project looks like Germany’s contribution to the outbreak of war from today’s perspective.

Nevertheless, the issue of gas shortage in Europe was on the annual agenda, and Russia has always come forward as a provider with adequate supply of the resource. Moreover, it was ready to supply as much gas as needed via NS2.

Due to the initial construction plan, NS2 should have been launched in early 2020 but the project was constantly put on hold because of its non-compliance with the EU’s energy regulation and the US sanctions (linked to the Russian Federation’s aggression against Ukraine since 2014 and its official recognition of the Donetsk People’s Republic and Luhansk People’s Republic). In May 2021, the project was 94-95% complete when the US and Germany reached an agreement on the NS2 sanctions waiver. The strengthening of restrictive measures in autumn 2021 could no longer obstruct the pipeline construction.

Thus, NS2 was ready for launch at the end of 2021. It remained only to pass the stage of German certification.

Is NS2 an economic or political project?

ЯIt seems to be one and the other. Russia cares about the distribution of its fossil fuel as the gas sales are a significant share of its economics (14% as of 2019). NS2 makes it possible to deliver gas straight to Germany bypassing Eastern European countries and saving on transit.

On the other hand, the larger share of Russian gas consumption by Europe, the more European countries depend on Moscow’s decisions. In other words, the Russian Federation uses gas as a means of pressure and manipulation. Therefore, Serbia secured a 3-year deal with Russia for gas supply at a reduced price in May 2022, while the distribution from Siberian deposits to the other European countries was shut in August 2022.

Such an insidious policy used to work with the countries of the Eastern Bloc during the Soviet era. Although the USSR dissolved, Russia treats its western consumers the same way. Thus, in 1992, when Latvia and Estonia spoke up for the declaration of their independence, Russia cut off gas supplies to these countries. It also shut down the gas pipeline to Lithuania as the latter started to look for alternative suppliers of fuel.

Multi-year contracts cannot guarantee the permanence of Russian terms of gas delivery. Year 2022 showed it. Gazprom has reduced gas supply to western countries since the beginning of the full-scale invasion of Ukraine by Russia and the imposition of EU sanctions. Gazprom cut the volume of delivery by one half in June, suspended supplies and then resumed them in June, and completely shut down the NS1 pipeline at the end of August.

Therefore, the capacity of NS1 decreased to 40% of its normal level. Gazprom explained this by the fact that Canada had not returned the turbines needed for service of the pipeline. In spite of Ukraine raising objections, Canada decided to transfer those turbines back to Russia through Germany. Nevertheless, this step did not change Russia’s decision to block gas supply via NS1.

In September, Putin claimed that the Russian Federation is up for “freezing Europe” which means complete cessation of supplies of gas, oil, and heavy fuel oil to the West. However, the EU has headed for the decrease in import of Russian natural resources since the beginning of the full-scale invasion of Ukraine by Russia. At the beginning of the year its share was 40%, meanwhile it dropped to 9 % in September. Thus, the European Parliament urged the countries to reduce gas consumption by 15% voluntarily.

Eventually, countries started to fill their gas storage facilities in order to be prepared for winter. As of October, an average fill level among the EU countries was 92%; it even exceeded the recommended minimum of 85%. Europe managed to prepare its energy reserves for the 2022-23 heating season, and yet the question of gas deliveries in the future is still open.

Mass media occasionally shares the idea that Ukrainians are to blame for the rise in prices for heating as they allegedly should have ceded their territory to end a war and restore things to the way they were. Russia aims for these narratives to be spread because they shift focus from the facts that the Russian Federation invaded Ukraine and Ukraine is fighting to defend its territory and people. The civilised world ultimately understands that nowadays, Ukrainian defenders protect the security of all Europe. Therefore, only Russia is responsible for the hard winter.

The unresolved energy issue between Russia and Europe brings back the question of NS, especially after the Nord Stream pipeline sabotage in late September 2022. A series of explosions occurred on both lines and led to pipe damage and subsequent gas leaks into the waters of the Baltic Sea. The pipelines were not operating at the time as Russia had halted the flow due to technical reasons. And yet, the pipes were filled with technical gas.

The perpetrators were not identified. The incident is officially recognized as international sabotage. Ukraine and Poland accuse Russia, and the latter blames the accident on the US maintaining the myth of the “evil West”.

Gazprom has completely ceased gas supplies to Europe via NS since September 2022. European countries apparently anticipated this scenario, so by the time they had managed to fill their reserves enough and increased the import from other distributors, such as the US and the UK. The concern of NS2 was raised again in October when the Russian Federation had confirmed that part of the second line remained operational and gas delivery to Europe was possible.

Due to Europe’s permanent need for gas import, it is reasonable to wonder if the EU countries are going to adhere to the agreement with Russia and receive gas via NS2. Since it remains an open question, the territorial integrity and economy of Ukraine are threatened.

History proves that the Russian Federation uses its fuel reserves as a tool of political influence and a weapon against “disloyal customers”. Despite any concluded agreements, Russia unilaterally decides who receives gas and in what way. That is why NS2 is a project that should not have a future.

If European countries go on purchasing gas from Russia, they will certainly make compromises with Russia’s terrorist policy for the sake of this crucial resource. This step implies financing the Russian Federation’s military aggression in Ukraine and strengthening its “quasi-monopoly” on this resource type. The only way out of Russia’s gas pressure is the complete termination of “gas relations” with the terrorist country and the search for alternative partners for fuel supply. And Europe’s independence from Russia supports Ukraine in the struggle for its existence and independence.