Winter is Coming: Why Nord Stream 2’s Naysayers Can Still Shoot Europe in the Foot to Stop Pipeline

Nord Stream 2’s construction wrapped up last month, with Gazprom starting to fill the pipeline with gas for testing purposes on Monday. Now, before it can deliver much-needed gas supplies to Europe, the joint Russian-Western European energy megastructure project needs to receive approval from German and European regulators.

While efforts by the US and its Eastern European allies to halt Nord Stream 2’s construction using sanctions, specious ecological grievances, and attempts to tie the project to Russian foreign policy have failed, its opponents have one last opportunity to delay its launch, even at the cost of Europe’s energy security ahead of a cold winter.

On Wednesday, Russia's Deputy Prime Minister Alexander Novak said that Nord Stream 2’s launch would help to stabilise the European gas market amid skyrocketing prices, and encouraged regulators to speed up the project’s certification.

Novak’s comments followed a request from Germany’s Federal Network Agency (BNA) this week demanding that Nord Stream 2 AG, Nord Stream 2’s Switzerland-based operator, provide information on the pipeline’s continued compliance with European Union regulatory requirements, and a warning from the regulator that it would consider litigation if doubts about compliance were not dispelled.

A Nord Stream 2 AG spokesperson told Sputnik that the project is in compliance with all applicable rules and regulations. “This also applies to the German Energy Industry Act (EnWG), which implements the EU Gas Directive into German legislation,” the spokesperson said.

What Does the BNA Want?

Before the German regulator allows Nord Stream 2 to come online and start pumping natural gas from Russia to northeast Germany along the bottom of the Baltic Sea, it needs to be convinced that the pipeline’s operator meets EU regulations separating the business of transporting the gas and its production and sale. The anti-monopoly legislation is known as "unbundling," and was introduced in 2019.

In mid-September, the BNA’s press office told Sputnik that the regulator had received all the necessary paperwork to start Nord Stream 2’s certification in the summer, and that the process began in September, with a draft decision on the matter expected to be reached no later than January 2022.

The EU will then have sixty days to review the certification, and the possibility exists to drag out the process for another two months, until as late as May 2022.

Complicating matters are efforts from within the EU to sabotage certification. On Tuesday, a group of 42 European Parliament lawmakers penned a joint letter to EU energy commissioner Kadri Simson, accusing Russia of deliberately withholding gas supplies to Europe, while simultaneously urging Brussels to adopt “interim measures” against Gazprom if Nord Stream 2 starts pumping gas before getting EU regulatory approval. The lawmakers stressed that a “clear and robust Commission opinion in the certification procedure” would be necessary before the pipeline could be launched.

Simson told Reuters that it was “looking into” the claims about Gazprom withholding gas, and said that the bloc’s “initial assessment suggests that Russia is fulfilling its long-term contracts.”

However, European Commission President Ursula von der Leyen told journalists the same day that a dearth of supplies from Russia is a key cause of the current supply crisis and high prices.

Russian President Vladimir Putin indirectly responded to these allegations on Wednesday, pointing out that Russia’s natural gas exports were on course to setting new records in 2021, with Gazprom delivering 15 percent more gas to the region in the first nine months of the year than it had at the same point last year. Putin stressed that even Russia’s gas transit through Ukraine – a nation with which Moscow has had an extremely difficult relationship ever since the 2014 US and EU-backed coup – have grown this year, with Gazprom on track to exceeding its obligations on sending at least 40 billion cubic metres of gas through the country before the year is out.

Could Nord Stream 2 Just Start Pumping Gas?

Nord Stream 2’s operator could theoretically challenge the EU’s "unbundling" rules, with Advocate General Michal Bobek, an advisor to the European Court of Justice, saying on Wednesday that Nord Stream 2 AG should be given the right to challenge the 2019 regulation amid the supply crunch.

Furthermore, according to an analysis by Bloomberg, the operator could theoretically start deliveries notwithstanding the risks of fines, citing Europe’s fuel crunch (although to date, the company has promised to strictly comply with all existing legal regulations).

Green With Envy

The German Green Party’s strong showing in last month’s parliamentary elections in Germany, and the potential for the party to join a new coalition government complicates matters further, with Greens leader Annalena Baerbock urging Berlin to scrap Nord Stream 2 and accusing Moscow of exacerbating the gas crisis. Last week, Alternative for Germany lawmaker Eugene Schmidt told Sputnik that “negative developments are possible” in relation to the pipeline project if the “extremely aggressive” Greens were to enter the government.

The Greens are one of only two major parties in the Bundestag to consistently express opposition to Nord Stream 2, with the other being the Free Democrats. The Social Democrats, Christian Democrats, Alternative for Germany, and The Left support the project.

Market experts are divided regarding the time frame for Nord Stream 2’s launch, with VTB Capital, a major Russian investment bank, indicating that it expects the pipeline to become operational only from “mid-2022.” However, Tom Marzec-Manser, an analyst from Independent Commodity Intelligence Services, a UK-headquartered market analytics firm, says the launch could come much sooner.

“It's still plausible Nord Stream 2 could run in some capacity during 2021. Just because a regulator has a maximum of four months to approve an application, does not necessarily mean it will take four months,” he said.

The gas crisis facing Europe could have been avoided if not for two years’ worth of efforts by the US and its allies to try sabotage the project –including two packages of sanctions by Washington which delayed construction by more than a year. In a fit of irony, the US State Department recently marked its “concern” over the gas shortages facing Europe, and blamed Russia for allegedly withholding supplies. Gazprom responded by stressing that it has met all of its obligations to customers.

In his remarks on Wednesday, Putin stressed that the global energy market does not tolerate “rash actions,” and emphasised that adequate gas deliveries are best assured through long-term contracts. He said, “...gas isn’t watches, underwear or neckties, not cars, and not even oil, which can be pumped and then stored anywhere, including in tankers in anticipation of a certain situation on the market. Gas is not traded this way, it cannot be stored in this way."

Nord Stream 2 is a joint venture between Russia’s Gazprom, Germany’s Uniper and Wintershall, Austria’s OMV, France’s Engie and the UK-Dutch Royal Dutch Shell. Once up and running, the pipeline will be able to deliver 55 billion cubic metres worth of additional gas to Europe every year, doubling the 55 billion cubic metres per year capacity of the original Nord Stream, which went online in 2011 and 2012.