NEW: The End of Nord Stream 2: Germany, the United States, and EU Law

March 22, 2022
The End of Nord Stream 2: Germany, the United States, and EU Law

The Temerty Contemporary Ukraine Program at HURI has released a new TCUP Report by Dr. Alan Riley on Nord Stream 2 that outlines the legal trouble the pipeline project would face even if it were to be revived after Russia's war in Ukraine.

For years, the pipeline has been a contentious subject, with policy officials in the US and Europe expressing concern both for Ukraine's national sovereignty and for Europe's energy security. Despite sanctions and legal arguments against the pipeline, the project was completed in September 2021, but would not become operational until it satisfied regulatory controls. In December, Russia restricted gas flow through its existing transits, seemingly to boost prices and pressure Europe to operationalize the pipeline.

In the lead-up to Russia's full-scale invasion of Ukraine, Germany halted certification of the project in response to Russia's decision to recognized the non-government controlled territories of the so-called Luhansk People's Republic and Donetsk People's Republic. With sanctions mounting after the war began, Nord Stream 2 laid off all of its employees and effectively ceased operations. 

Nonetheless, the pipeline remains complete and ready to operate. In a post-war scenario, if Russia tried to revive the project, what are the chances it would succeed? EU Energy Law expert Dr. Alan Riley outlines the legal obstacles Nord Stream 2 would still have to overcome and concludes that chances are slim it will ever happen: 

Nord Stream 2 is extremely unlikely to be authorized and come into operation for the foreseeable future. This author contends that, absent a democratically elected Russian government committed to the rule of law, the pipeline will not be authorized and brought into operation. In theory, the German suspension could be lifted, and the sanctions waivers in respect to US sanctions could be restored. The argument for Nord Stream 2’s eventual revival would be that the European Union requires significant natural gas supplies. Nord Stream 2 could in theory provide 55bcm of supply from Russia. If, as a result of the large-scale invasion of Ukraine, the Ukrainian transit system were severely damaged or eliminated, there would be a superficially compelling argument that Europe really needs Nord Stream 2. This argument, however, overlooks the fact that Europe can obtain natural gas supplies from Norway, Algeria, and from Liquid Natural Gas (LNG) sources, as well as from renewables and other alternative energy sources (and it would also be possible for the Ukrainian pipeline network to be repaired). And it overlooks the huge shift in European perceptions as to the value of Russian gas supplies to Europe after this large-scale attack on Ukraine. There is no need to increase dependence once again on Russian gas.

Read the full report online.