Recently, the United States gave its approval for the controversial Germany-Russia Nord Stream 2 Pipeline (NS2P) project, sparking discussions about Europe’s increasing reliance on Russia for their energy needs. Formerly, the US had imposed sanctions to halt the completion of this gas pipeline, which is an important conduit between Russia and Germany.
About NS2P
The Nord Stream 2 Pipeline is an extensive 1,200-km pipeline that will transport natural gas from Ust-Luga in Russia to Greifswald in Germany by way of the Baltic Sea. Upon completion, it is projected to carry an impressive 55 billion cubic meters of gas per year. The decision to construct this pipeline was made back in 2015. At the time, the Nord Stream 1 system was already completed, meaning the newly introduced NS2P would be supplementing its supply, providing a total of 110 billion cubic meters of gas annually to Germany.
Implications: Dependence and Geopolitics
Europe’s dependence on Russia for natural gas will be considerably heightened following the completion of the pipeline, given that European Union (EU) countries already procure as much as 40% of their gas requirements from Russia. Moreover, the existing pipeline that connects Russia and Europe through Ukraine will effectively be bypassed once NS2P is functional, thereby denying Ukraine approximately $3 billion in transit fees each year. Such circumstances could amount to a ‘generational geopolitical win’ for Russia or prove catastrophic for the United States and its allies.
The US’s Stance
In choosing to challenge Russia, the US has opted for a less aggressive approach, threatening to impose consequences should Russia exploit the pipeline to harm other countries, particularly Ukraine and those located in eastern Europe. This choice reflects the US’s simultaneous need for access to Russia’s hydrocarbons and misgivings about Russian President Vladimir Putin, who is accused of having instigated the 2014 Crimean conflict and allegedly interfered with the US elections in 2016 and 2020.
Germany’s Actions against Russia
The US-Germany deal stipulates that Germany will independently impose sanctions and curtail Russian exports if Russia attempts to weaponize energy supplies or execute further aggressive acts against Ukraine. This act demonstrates Germany’s commitment to maintaining stability in the region, even as it taps into Russia’s vast natural gas reserves.
Green Fund for Ukraine
As part of the agreement, Germany is obligated to “utilise all available leverage” to extend the current Russia-Ukraine gas transit arrangement by ten years. The country is also required to contribute at least $175 million to a newly established $1 billion ‘Green Fund for Ukraine’, which aims to bolster Ukraine’s energy independence. All these make up the multi-pronged strategy adopted to manage the complex dynamics and implications of the Nord Stream 2 Pipeline project.
