EU Economics

Germany-Russia joint gas operation causes anger in the European Union

DESPITE political tensions over Russia’s occupation of Crimea, continuing economic sanctions and allegations of cyber attacks, Germany and Russia are teaming up on a new business venture set to affect the entire EU – the business of gas.

In 2012, the two countries agreed to the construction of the Nord Stream 2 – a 746 mile-long underwater pipeline for transporting natural gas directly from the Russia coast to Germany.The pipeline is set to begin operations as early as 2019, with Russian gas being delivered to the coastal resort of Lubmin before being redistributed across central and eastern Europe.The Nord Stream 2, which will run parallel to the Nord Stream 1, was allegedly launched without the consultation of Baltic states.

Nord Stream 2 will begin operating in 2019GETTY     

Nord Stream 2 will begin operating in 2019

The joint venture by Berlin and Moscow has already cost an incredible £6.4billion and has come under fire from the European Parliament’s Energy Commissioner Miguel Arías Cañete.Mr Cañete, a Spaniard, claims the project does not respect the rules of the common market.

Germany's Angela Merkel at launch of Nord Steam 1GETTY           Germany’s Angela Merkel at the launch of Nord Steam 1 in 2011

In a letter to the EU presidency in February, Energy Committee Chairman Jerzy Buzek said the project was “counteracting the necessary diversification (of energy sources) while making a number of Member States even more vulnerable and jeopardising safe gas supply in the EU as a whole”.According to the Energy Commission, the pipeline project will “never be one of common interest” adding that in the future, Germany would be in total control of the gas supply to a large part of the continent.However, the news has not been met with total outrage across the EU.

Latvia, for example, is currently wholly dependent on Russian gas, and has received the news with a sense of relief.Arvils Ašeradens, Latvia’s Economic and Energy Minister explained: “It is much better for us to take control, not Russia”.Three other Baltic states, as well as Finland, Romania and Bulgaria, have also expressed a deep desire to become energy independent from Russia.

Putin looks at pipes for Nord Stream 1GETTY          Russia’s Vladimir Putin looks at pipes for the first Nord Stream line which opened in 2011

The EU’s own gas production, especially in the Netherlands, is likely to have by 2020, leading to a higher demand for gas imports.Gas reserves in politically stable Norway of 1900 million cubic metres pales in comparison to Russia’s 47,000 million cubic metres – essentially the world’s largest gas reserve.

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