Last month’s US-German deal to allow the completion of Nord Stream 2 involved a German commitment to national and European sanctions against Russia if the state deploys the pipeline to “use energy as a weapon or launch new ones. aggressive acts against Ukraine. . Posted on July 21, the agreement also pledges to support EU law, in particular its energy laws, which potentially introduce new legal obstacles to the operation of the pipeline.
Under the 2009 Gas Directive (and its 2019 amendment), the owner of Nord Stream 2, Gazprom, linked to the Kremlin, must comply with the ownership unbundling rules (it cannot both provide the gas and owning the pipeline), third party access (competitors must be authorized access) and tariff transparency. In addition, the Court of Justice of the European Union ruled on July 15 that when the German regulator examines, under Article 11 of the Gas Directive, whether the owner of the pipeline poses a risk to the safety of supply to the EU or its Member States, it must take into account the interests of each Member State at every stage of the certification process. Poland notably opposed the project on the grounds that it would increase “Russia’s potential to destabilize the security situation in Europe”.
Legal battles are inevitably ahead, and if the process so far is any indication, Gazprom will seek to manipulate the European gas market and pressure regulators to decide in their favor. Natural gas prices are currently at their highest level in 13 years, and Gazprom fulfills its long-term supply contracts by selling natural gas already stored from storage facilities in Austria and Germany. As of July 19, these facilities were only 33% and 47% full, respectively. This raises fears of gas cuts in winter. The implicit threat to suspend gas exports will become increasingly relevant as the legal swamp thickens.
Gazprom’s decision to meet European demand by depleting stocks, rather than buying gas in transit through Ukraine, was seen as an attempt to create an artificial deficit and a misleading need for Nord Stream 2. Anastasia Sinista, security expert at the Ukrainian energy think tank. tank DiXi Group, believes that “if Gazprom built its strategy for economic feasibility, then the company would try to sell its product profitably to European customers”. Instead, it forgoes profit for geostrategic purposes. Elena Burmistrova, head of Gazprom’s export division, seemed to implicitly confirm this when she said in May that the company would “be able to meet additional demand with the commissioning of Nord Stream 2”.
Looking ahead, Alan Riley, senior researcher at the Institute for Statecraft in London, considers that the legal battles ahead are no longer about energy security or Ukraine’s independence – as the US accord mentions. German – but as an “existential battle for the uniform.” the application of the rule of law, and in particular of Union law, throughout the territory of the Union. If Gazprom continues to play its crude games of militarizing its quasi-monopoly in pursuit of geostrategic goals, it will take an irrevocable step towards confronting the EU as a legal and constitutional entity, and not just an economic one.
As Europe, especially Western Europe, becomes increasingly dependent on Russian gas, the capacity for such implicit and even explicit threats will increase. Gazprom currently supplies 81% of all gas imported by Western European countries and nearly 40% of European gas as a whole. This was done to the detriment of national production, which fell by 11% in 2019 according to Eurostat, and Ukrainian gas transport which will become superfluous with the operation of Nord Stream 2.
While the recent Merkel-Biden deal has been touted as a long-running conclusion that would secure a future for Nord Stream 2 while preventing its strategic hijacking, the reality is quite different. Gazprom has seen success in its implicit threats of winter gas cuts, and now facing increasing legal challenges, it looks likely to further exploit its increasingly dominant position as the main gas supplier. in Europe. Although its obstacles are now legal rather than political, the merging of the two at EU level – the opposition will be led by member states – means the tactic may well continue to work. Of course, “energy as a weapon” is not resigned to the past: it is a cause and a consequence of Nord Stream 2.