Energy Nord Stream 2 3 July, 2017 9:00 am   
Editorial staff

Nord Stream 2 criticized at a CEPS conference in Brussels

During a debate organized by the Centre for European Policy Studies entitled “Nord Stream 2 and EU Energy policy objectives,” experts from Europe and the United States talked about the controversial gas pipeline.

According to professor Alan Riley, Senior Fellow at the Institute for Statecraft in London, the construction of Nord Stream 2 will concentrate natural gas routes, which will create additional risk. “It’s like building another Ormuz Strait, a bottleneck, which increases risks of delivery disruption on this route,” said the academic. “Let us not put all of our energy eggs into one basket,” he appealed. Juraj Nociar, Head of Cabinet of Vice President for Energy Union Maroš Šefčovič, agreed with professor Riley that the project risked concentration. He added that the framework of Russian gas deliveries to the EU would change, which may threaten the construction of new infrastructure.

In his view, Nord Stream 2 would increase the dependence on the main supplier – Russia, because it would not offer a new source. Whereas in professor’s Riley opinion, the fact that Gazprom, which is enjoying its dominant position, will now benefit from the fact that the EU law will not be fully applicable to the pipeline, goes against the EU gas market liberalization policy.

Nociar assessed that the Nord Stream 2 investment process has been politicized from day one, because a number of political entities got engaged in it, including the European Parliament and Member States. This is why we cannot talk only about the project’s commercial dimension.

He also stressed that Europe may have to face a decrease in gas demand because of the development of renewable energy sources, climate policy and the already existing free capacity. This is why the European Commission, he reminded, “did not see the need to build infrastructure of such scale.”

Because of Ukraine’s peculiar position stopping the transit via its gas network would put at risk deliveries to the internal market. The representative of the Commission stressed that “Ukraine is becoming a more reliable partner, which is confirmed by the fact that a number of European companies are involved in its transit system.”

Benjamin Schmitt from the U.S. Department of State’s Bureau of Energy Resources also took part in the discussion. He said that Nord Stream 2 was causing a huge concern from the point of view of national security. “The United States is convinced that it will be a threat to Europe’s energy security,” he explained. This is why the US supports the construction of other pipelines, which strengthen diversification in Europe.

Sebastian Saas, EU Representative of Nord Stream 2, defended the project. Despite what the representative of the Commission said, he argued that the extraction of natural gas in the EU was going down and the gap had to be replaced with additional import. The market decides about the import. According to Saas, gas will be the most economically sound tool to lower CO2 emissions. This is how Nord Stream 2 would support Europe’s pivot from coal.

The representative of the consortium said that Nord Stream 2 would be constructed in accordance with EU and environmental law. It will be approved by national authorities. “Nobody expected the Third Package would be applied to it,” he argued. In his opinion all investments of this type should be subject to the same rules. “If Nord Stream 2 was subject to the Third Package as the only pipeline in Europe it would be discrimination,” he said.

“Europe’s internal market is covered with a thick network. It allows to transport gas to places where it is needed. This is why Nord Stream 2 will not bypass anybody. The volume will be at the disposal of everybody with network access,” he argued. He also added that Ukraine was not a trustworthy partner because of the malfunctions of its transmission system.