Russia smiles as the EU debates its energy future

Brussels, Belgium—The European Union persists in its effort to reach an agreement with Russia over the construction of an underwater gas pipeline.

The European Commission, the EU’s executive branch, has been trying to cajole member-states to keep the expansion of the Nord Stream II gas pipeline on the table despite concerns over EU’s increasing energy dependence on Russia.

In 2017, the Gas Directive was introduced in order to guarantee that all foreign gas pipelines comply with EU regulations on security, transparency, and competition.

“It’s possible that this proposal to amend the third gas directive to such an extent is also there to signal to counterparts that the willingness to act is very strong,” said Luca Franza, a researcher with Clingendael, an international affairs think-tank based in the Netherlands.

Currently, the pipeline can pump 1.9 trillion cubic feet per year.  The proposed expansion would double that number to an astounding 3.9 trillion cubic feet—a quarter of Europe’s energy needs. Ukraine, however, would be the ultimate loser in case the expansion proceeds. The planned underwater pipeline would reach Germany and Europe through the Baltic Sea, ignoring Ukraine, who currently makes a hefty sum over transit rights.

Nord Stream became operational on November 2011.

U.S. sanctions could also complicate the outcome. Every new wave of sanctions against Russia could target companies that are involved in the pipeline. Such a scenario would strain the already strained transatlantic relations to their limit.

“The proposal was and is highly contentious and I take a very critical view of it as well. Especially because it is obvious that we are talking about a ‘Lex Nord Stream 2.’ Internal European regulations, for example third-party access, should now also apply for gas pipelines to and from third countries,” said Knut Fleckenstein, a member of the European Parliament.

Some Europeans are also skeptical about the Commission’s motives. They perceive its actions as an attempt to intervene in the market. “That the Commission is trying to realise its proposal now – without impact assessment and stakeholder consultations – clearly shows that the Commission’s and Parliament’s primary objective is a politically justified intervention in the market,” added Fleckenstein.

“A Nord Stream 2 project without clarity about the Ukrainian transit role is not possible,” said German Chancellor Angela Merkel.

“The fact is that we cannot allow that, with Nord Stream 2, Ukraine would have no significance at all any more with regard to gas transit,” added Merkel.