After the poisoning of Russian opposition leader Alexei Navalny, European countries are discussing the possibility of stopping the Nord Stream 2 gas pipeline project with Russia, according to a DW report.
As Germany shifts away from coal and nuclear power towards renewable energy, with gas reserves in Europe depleting rapidly, Russia’s goal remains one of gaining direct pipeline access to the large market for gas in Germany by avoiding a costly detour through Ukraine and Poland.
Energy Economics Professor Christoph Weber of Germany’s Duisburg-Essen University believes the additional capacity offered by the almost completed Nord Stream 2 pipeline is not needed. In his view, the gas pipeline is not essential for maintaining Germany’s energy security since the country has sufficient access to natural gas in Norway, USA and North Africa.
Marc Oliver Bettzüge of the Institute of Energy Economics at the University of Cologne (EWI) echoes Weber’s sentiment, predicting that termination of the pipeline project will not create a supply gap in Europe. However, he did point out if the delivery of Russian gas were allowed to proceed, the effect would be to drive down gas prices in Europe
German Institute for Economic Research (DIW) senior energy expert Claudia Kemfert has said the not only is the Nord Stream 2 pipeline unnecessary in terms of a sustainable German energy policy, but that the project is environmentally destructive and commercially inefficient. Moreover, she noted that Russian energy analysts doubt the project would turn a profit for Gazprom, the Russian energy giant.
However, were Nord Stream 2 to be scrapped, Gazprom would not be the only party to suffer. Five large European energy companies have provided approximately 10% of the funding for the 10-billion euro pipeline project.
According to Weber, it is likely the companies in question would attempt to cover their losses if the project was scrapped, probably by seeking compensation from those deemed politically responsible for the move.
In the end, taxpayers would have to foot the bill, he surmised, giving Russia an opportunity to flaunt its reliability as a supplier while questioning Germany’s reliability as a partner.Offering a different take on the issue, Zukunft Gas industry group senior board member Timm Kehler, interviewed by Handelsblatt , underscored that Russian gas accounts for some 40% of Europe’s supply and about 50% of German consumption. Such volumes of gas cannot easily be replaced, he pointed out.