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Why the US has changed its mind on Nord stream 2 pipelines?

  • Category
    International Relations
  • Published
    2nd Aug, 2021

Context

In the latest Development, the United States gave its approval for the completion of Nord 2 Pipeline, a major new gas pipelines project between Russia and Germany.                                                         

Background

  • The US, which had previously imposed sanctions to prevent the completion of major new gas pipelines between Russia and Germany.
  • Now, the President of US Joe Biden has decided not to kill the energy system with sanctions.
  • It has instead gone with the softer option of threatening Russia with consequences should it use the pipeline to harm Ukraine or other countries in eastern Europe.
  • The joint statement of US and Germany states that “united in their determination to hold Russia to account for its aggression and malign activities by imposing cost via sanction and other tools”

Analysis

What is Nord Stream 2 Pipeline Project?

  • Nord Stream 2 is an underwater twin pipeline that would transport natural gas from Russia directly to Germany.
  • At a length of 1,230 kilometres, it is to follow the route of the existing Nord Stream twin pipeline underneath the Baltic Sea.
  • It will carry 55 billion cubic meter of gas per year.     
  • The pipeline crosses into the exclusive economic zones of five countries: Russia, Germany, Denmark, Finland, and Sweden.     
  • It would transport natural gas from Russia directly to Germany.
  • Natural gas is a lower-carbon fuel that can replace other fossil fuels in the energy mix and deliver a reliable output to complement intermittent renewable energy.       

Quick facts of the Project                                            

  • Nord Stream 2 is being built by Nord Stream 2 AG, a consortium incorporated in Switzerland.
  • Moscow-based, state-owned Gazprom is the project’s sole shareholder.    

How will it be done (the process)?

  • Gas source:The gas that the pipeline is to carry lies in northern Russia’s Yamal Peninsula, which holds nearly 5 trillion cubic metres of gas reserves.
  • Extraction and transportation:Once extracted, the gas is to be transported to coastal Russia.
  • Pipeline:There, it is to pass through a compressor station – a facility that raises the pressure of the fuel – and then be fed into the pipeline. 
  • Flow:After entering into the Gulf of Finland, the pipeline is to re-emerge on land in north-eastern Germany, near Greifswald.
    • Russia, Germany, Finland, Denmark and Sweden have grantedall the permits necessary for construction of the planned pipeline within their jurisdictions.

The original project

  • The original Nord Stream pipeline, with an annual capacity of 55 billion cubic metres (bcm), was finished in late 2012.
  • The pipeline system’s total capacity is set to double to 110 bcm following Nord Stream 2’s completion.

Current status of project-:

  • The pipeline falls in German and Danish Territory, and all but 150 km pipes for the project have already been laid.   

Facts about Russia Energy Reserve-:

  • Russia has the largest known natural gas reserves of any state on earth.
  • This is the 32% of world proven natural gas reserves mainly owned and operated by Russian monopoly Gazprom, which produces 94% of Russia’s natural gas Production.

Largest natural gas fields in Russia

  • Urengoy field – 10.9Tcm: Located in the northern West Siberia Basin, the Urengoyskoye gas and condensate field has been in production since 1978.
  • Yamburg field – 8.2Tcm: Yamburg, which is operated by Gazprom and located in Yamalo-Nenets Autonomous Okrug in Tyumen Oblast, is also the world’s third biggest natural gas field.
  • Bovanenkovo field – 4.9Tcm: Located in the Yamalo-Nenets Autonomous Okrug, the onshore Bovanenkovo field operated by Gazprom has been in production since 2012.
  • Shtokmn field – 3.9Tcm: Discovered in 1988, the Shtokman gas and condensate field is located in the central part of the Russian sector of the Barents Sea, approximately 600km north-east of Murmansk and in water depths of ranging from 320m to 340m.
  • Zapolyarnoye field – 3.5Tcm: The Zapolyarnoye field is located in the southern part of the Taz District, 220km away from Novy Urengoy, Yamal-Nenets Autonomous Area.

Significance of the project-:

  • The pipeline will help Germany secure a relatively low-cost supply of gas amid falling European production.
  • It is also part of Gazprom’s decade long efforts to diversify its export options to Europe as a region moves away from nuclear and coal.       

Reasons behind the US’s earlier stand:

  • More power to Russia:S. fear that the Baltic pipeline would give Russia too much power over European gas supplies. It will lead to handing of a wider market and geopolitical power at a politically precarious time by Russia.
  • EU’s dependency on Russia: The Nord 2 project would increase Europe’s dependence on Russia for Natural gas, thus boldening its President Vladimir Putin.
  • Currently, EU countries already rely on Russia for 40%of their gas needs.
  • The EU’s domestic gas production is in rapid decline. To meet demand, the EU needs reliable, affordable and sustainable new gas supplies. 

Why Ukraine is opposing the project?

  • Elimination of middleman nation (Ukraine):There is an existing land pipelines between Russia and Europe that runs through Ukraine, which feels that once Nord stream 2 is completed, Russia could Bypaas the Ukrainian pipeline, and deprive the country of lucrative transit fees of around 3 billion Dollar per year.
  • Nation isolation:Bypassing Ukraine with the new pipeline, will isolate the nation and make it weak.

Why US changed its mind now?

  • The US-Germany deals Lays out that if Russia attempts to “use energy as a weapon or commit further aggressive act against Ukraine”.
  • Germany will take steps on its own and push for the actions at the EU including Sanction”, to limit Russian export capabilities to Europe in energy sector”.                       

Conclusion

Getting the go-ahead for the pipeline’s completion is, of course, is good news for Russia. It will not only increase Europe’s dependence on Moscow, but will also make Germany and other Western European countries economically stronger. Eventually, in turn, it will boost their ability to promote democratic values. 

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