When the $11 billion Nord Stream 2 challenge was introduced in 2015, it promised a courageous new power future for Europe. Criss-crossing beneath the Baltic Sea from western Siberia to make land in Germany, it assured Germany—and the tight-knit European power market, by way of which pure gasoline provides cross borders with ease—assured provide. Nord Stream 2 was constructed to bypass Ukraine, in a transfer designed by Russia so as to add financial stress to the nation following a partial invasion of the nation’s east in 2014. Russia’s gasoline provide contracts by way of Ukraine are up for renewal in 2024, and Russia appears minded to ditch them, and the provision to the nation solely. It wouldn’t be something new for Russia, which has long used its position because the world’s power provider to threaten different international locations.
However political expediency—and the necessity to guarantee regular provides of gasoline—trumped geopolitics and defending Ukraine’s sovereignty. Europe’s home gasoline manufacturing was declining—dropping 9 p.c between 2014 and 2015 in line with the European Fee —and the continent acknowledged it wanted to develop into extra reliant on Russian gasoline imports. The challenge went forward, and within the intervening seven years the huge pipeline was constructed beneath the Baltic Sea.
All of it turned out to be a waste of money and time. Forward of Russia’s full-blown invasion of Ukraine, launched within the early hours of February 24, the plans for Nord Stream 2 have been positioned on ice. The massive query is what meaning for Europe’s power safety. “That is an inflection level,” says Thierry Bros, professor at Sciences Po, a college in Paris. “The disaster is an effective wake-up name for Europe, and Europe’s naivety.” It’s additionally a blow to Russia, which depends on the revenue from gasoline and oil to assist its personal financial system and, by extension, its battle efforts.
At its peak, the 1,230-kilometer pipeline might provide 55 billion cubic meters of gasoline a yr—a tenth of European gasoline consumption in 2021 alone. Within the second quarter of 2021, the newest interval for which European Fee knowledge is on the market, Russia accounted for practically half of gasoline imports into Europe, and Nord Stream, the dual predecessor pipe to Nord Stream 2, was crucial provide route of pipeline gasoline to the EU. And gasoline imports are very important for Europe: The continent imports 3 times as a lot gasoline because it exports, and twice the quantity it produces domestically, in line with Worldwide Power Company (IEA) knowledge.
On February 22, Germany halted the method of certifying the pipeline, an vital a part of the method of bringing it onstream. A day later, america announced sanctions in opposition to the corporate overseeing the Nord Stream 2 challenge, in addition to its management. Germany’s international minister, Annalena Baerbock, stated on February 23 that canceling the Nord Stream 2 settlement, which might have helped Europe’s power safety, was a troublesome choice to make. However it was vital. “For us because the German authorities, it was vital to indicate that for a free and democratic Ukraine, we’re prepared to additionally settle for penalties for our nationwide financial system,” she told reporters. “Peace and freedom in Europe don’t have a price ticket.”
Whereas Baerbock stated peace and freedom didn’t have a price ticket, former Russian president Dmitry Medvedev was happier placing a quantity on the price of shutting Nord Stream 2 down: “Welcome to the courageous new world the place Europeans are very quickly going to pay €2,000 ($2,225) for 1,000 cubic meters of pure gasoline,” he tweeted. European gasoline costs rose 12.7 p.c the subsequent day to €927 ($1,030) per 1,000 cubic meters.