Ukraine is angry with the pipeline because it bypasses the country and thus denies it transit fees for Russia’s gas exports. 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, 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, and despite the strain in Moscow-Berlin ties over the Alexei Navalny affair – Merkel blamed the Kremlin for the attack on the Russian opposition leader – the $11-billion pipeline was completed in September 2021, although it is awaiting German certification to become operational.

Even before the current crisis over Ukraine, the US had imposed some sanctions against it, 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 .

“If Russia invades, that means tanks or troops crossing the border of Ukraine again, then there will be – there will be no longer a Nord Stream 2,” Biden said during a joint news conference with the German Chancellor Olaf Scholz. “We will bring an end to it … I promise you we will be able to do it.”

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, and 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.

Nord Stream 2

Scholz steps in

Scholz, who undertook the US visit in response to criticism at home and abroad that he has been “missing in action” during the Ukraine crisis even as French President Emmanuel Macron took the lead with his shuttle diplomacy between Kyiv and Moscow, held out the reassurance that Germany was not about to break away from its NATO allies.

“We’re one voice, and do things together and we made it very clear if there was military aggression against Ukraine, this will entail severe consequences that we agreed upon together,” Sholz said. 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 metres (bcm). Among the buyers are France, Italy, Spain, Greece, Portugal and 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.

Source: The NYT

Nord Stream capacity

Nord Stream 2 is an expansion of Nord Stream, which became functional in 2011. Like the first pipeline, Nord Stream 2 comprises two pipelines with the identical combined carrying capacity of 55 bcm of gas per year. Russia is reported to have exported 168 bcm to Europe through this and other pipelines transiting through Ukraine in 2020. Germany was the biggest buyer at 56 bcm, Italy bought 20 bcm and the Netherlands 11 bcm.

Russia’s economy is mainly dependent on exports of oil and gas, and Europe is its largest buyer. This is why Nord Stream 2 can cut both ways. This is perhaps why Scholz was moved enough to say it was his “damned duty” to prevent war.

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