Although the undersea pipe is completed, it is not yet operational. It connects Russian natural gas to Europe via Germany. As Western governments attempt to stop a Russian attack on their neighbor, it has become a major target.
It has been a source for tension in the past between Germany and the U.S. who opposed the project. While Olaf Scholz stated that all options were available, he did not mention NordStream 2 at a Washington news conference.
Biden stated Monday that if Russian tanks enter Ukraine, there will be “no longer a Nord Stream 2”. Scholz stressed that Russia must be kept in the dark about its sanctions, so they can deescalate.
These are the key points to know about the pipeline
WHAT IS NORD STEAM 2?
The Baltic Sea pipeline is 1,230 kilometers long (764 miles) and runs from Russia to Germany.
It will double the Nord Stream’s capacity to 110 billion cubic metres of gas per year. This would also avoid Ukraine and Poland who would be subject to transit fees. The project will increase Russia’s influence over Europe, they added.
Although the pipeline is now filled with gas, it is still not operational until approvals by Germany’s utility regulators as well as the European Commission.
WHY DOES RUSSIA WANT A PIPELINE
Gazprom, a state-owned producer, says it will supply Europe with affordable natural gas. It also plans to add pipelines through Ukraine and Belarus.
Europe gets about 40% of its gas from Russia, while it imports the majority of its gas. Nord Stream 2 could be an alternative to Ukraine’s aging system. It would lower costs through saving transit fees to Ukraine and Poland and avoid episodes such as short 2006 and 2009 gas cuts due to price and payment disputes between Russia, Ukraine, and Poland.
WHY IS BIDEN AGAINST IT
Since before the Biden administration, the U.S. and European NATO allies like Poland and Ukraine have been opposed to the project. They claimed that Russia has the potential to use gas as a geopolitical weapon .
Biden lifted sanctions on the operator of the pipeline, which was near completion, in exchange for an agreement by Germany to take action against Russia if that country used gas as a weapon against Ukraine. The U.S. believes Nord Stream 2 is a bad idea.
Scholz, Angela Merkel’s finance Minister, supported the project, while his Social Democratic Party supported him.
Although he avoided referring specifically to Nord Stream 2, Scholz said Russia would be subject to “severe consequences” so it was important to have sanctions in place.
HOW WOULD BIDEN BLOCK NOR STREAM 2 BE MANAGED?
The U.S. could impose severe financial sanctions on anyone or every company doing business with the pipeline. This would effectively scare away banks and businesses, and make it impossible for the pipeline’s operation to continue.
Biden hasn’t indicated if this is the path he may pursue. When asked Monday by Scholz how the U.S. would stop something under German control, Biden simply said that he could promise that he would. We will work together.”
Republicans and Democrats have been arguing against Nord Stream since it gives Russia more leverage over Europe. This rare agreement was reached in Congress. They’ve been divided for months over whether to impose sanctions against Nord Stream 2 immediately or only if Russia invades. The Bill backers refused to reveal what compromise they were working on.
The approval process in Germany has been presented strictly as a legal decision and not as a political one. This raises questions about how to respond to a Russian attack. European Union members agreed to sanctions against Russia for its 2014 seizure and seizing of the Crimea peninsula.
WILL NORDSTREAM 2 ASSIST EUROPE’S NATURAL GAS CRISIS?
It won’t be approved immediately. The pipeline won’t be approved by regulators for several months. This is because it cannot meet the heating and electricity requirements of the continent this winter due to a severe gas shortage. Gazprom could send more gas through existing pipelines if it so chose.
Concerns about Russia and Russia-related issues have continued to grow with the winter crunch. Russian President Vladimir Putin stated that the lack of gas is a sign of the urgent need to approve Nord Stream 2. Russia resisted short-term gas sales, even though it had long-term contracts with European clients. It also failed to fill its underground storage in Europe.
Analysts believe Russia needed to replenish its winter reserves first. Gazprom has stressed its long-term reliability and its support role. Whatever Russia’s motivation, Putin’s remarks did not alleviate concerns that Russia may use gas to political leverage.
RUSSIA IS THE BOSS OF GAS?
That’s oversimplifying. Gazprom relies on the European markets to sell Russian gas. While Europe does need Russian gas, it also depends on them for support of its government budgets. In recent years, the European Union was able to make Gazprom comply with many anti-monopoly rules.
This interdependence is the reason many believe Russia will not cut off gas to Europe if the conflict in Ukraine escalates. Russian officials have stated that they do not intend to do so.
