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    Germany sees a gas pipeline under the Baltic as a commercial project. Russia may see it as a leverage.


    January 27, 2022 - Andy Uhler

     

      Last September, contractors finished building a natural gas pipeline from Russia to Germany over the bed of the Baltic Sea. The pipeline is called Nord Stream 2 and it would double the amount of Russian gas available to German customers — and avoid the pipeline that currently carries Russian gas through Ukraine.

      But Nord Stream 2 has been sitting idle; Ukraine, the European Union and the U.S. have all objected to the pipeline, and German officials have suspended the process of certifying it to go online.

      Today, the pipeline's backers did something German regulators have been demanding — they registered a subsidiary company that would oversee the part of the pipeline on German soil.

      Nord Stream 2 and all of the back and forth over it are very much part of the ongoing tensions over Ukraine between Russia and the Western Allies.

      Since the Nord Stream 2 pipeline was announced in 2015, German officials have called it a commercial endeavor. Daniel Fried, now a distinguished fellow at the Atlantic Council, was U.S. Ambassador to Poland in the Clinton administration and helped lead the West's response to Moscow's invasion of Ukraine in 2014.

      "For Germany, this is about a reliable supply of gas, because they're getting out of nuclear and they want to get out of coal. So they need natural gas. So what's the problem?" Fried said.

      "The trouble with that view is that Putin regards gas as a weapon," he added.

      Currently, Germany gets up to around 75% of its natural gas from Russia. A lot of that travels through pipelines in Ukraine, which charges for the privilege.

      According to Chris Miller, Assistant Professor of International History in the Fletcher School at Tufts University, Nord Stream 2 would let Russia avoid paying Ukraine, but that's not what's at stake here.

      "I think it's wrong to overly focus on a billion dollars here or a billion dollars there in European energy markets. That's actually not a large sum of money when it comes to the global gas trade. And it's certainly not a large sum of money when it comes to what the impact would be of a vast war between Russia and Ukraine," Miller said.

      Miller said that for Russia, these decisions are about geopolitics, never market efficiency.

      For Germans and the rest of Western Europe, more gas coming in would alleviate some strain on the energy market and fuel prices would likely come down.

      Germany, like the rest of the countries in the Paris Climate Agreement, is trying to shift its energy mix.

      Kristine Berzina, Senior Fellow and Head of the Geopolitics Team at the German Marshall Fund of the United States, has said for years that Germans have described Russian gas as the least bad energy option.

      But now that political tensions are escalating, German officials have some decisions to make.

      "So the question will come down to: How does Germany prioritize its climate goals, its nuclear phase out goals, and its geopolitical and security goals right now?" Berzina said.

      According to her, wherever Germany lands on that list of priorities will determine whether Nord Stream 2 comes online, or continues to lay dormant at the bottom of the Baltic Sea.

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