German officials said Tuesday that they would block the project that would double the flow of Russian natural gas into the country. The conflict between Russia and Ukraine is the reason for the announcement. In light of the most recent developments, we need to reexamine the situation regarding the Nord Stream 2. The $11 billion, 750-mile (1,200-kilometer) line was completed last fall, but has yet to get the final approval from regulators that would bring it online. It is possible to transport 55 billion cubic meters of gas per year from the coast of Russia under the Baltic Sea to Germany, which works out to more than half of the country's annual energy requirements, CNN reported. The Environmental Action Germany claims that the project will emit 100 million tons of CO2 per year, plus fugitive methane releases, which is a huge concern. The world powers objected to the project for how it could boost Russian influence, not for its climate impacts. Russia's state-run oil and gas company, Gazprom, is the owner of the pipeline. Powerful countries including the U.S., as well as countries in Russia's direct path, including Poland and Ukraine, are worried that the project will boost Putin's influence, CNBC reported. The U.S. oil industry is also trying to get into European markets for its products.
Germany has publicly held that, contrary to some of its allies' concerns, the Nord Stream 2 is a financial venture. Germany has been dragged into Russia's conflicts because of the existence of the pipeline.
The German government's request for the halt of the certification process for theNord Stream 2 project takes Russian gas exports back to the administrative-regulatory sphere, where it was tried to put it in the last couple of years. The move shows that there is a high price tag for cheap Russian gas, and it is very high.
About a third of the EU's natural gas supply is from Russian sources, according to a report. The prospect of shutting off a huge potential new source of energy due to low natural gas inventories, bad weather, lower supply from Russia, and increased economic activity may seem daunting to some. Putin tried to blame Europe's energy problems on the renewable energy transition. Analysts said Tuesday that the EU has enough gas supplies to last until the spring, when energy use usually drops.
European energy markets were vulnerable to the whims of Russian supply even before renewables became significant players on the grid. In the long term, speeding the transition to renewable energy can help protect countries from relying on problematic powers for fuel.
The whole idea that Europe wouldn't be in this mess if it wasn't for the energy transition is nonsense. It doesn't cause them.
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