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World’s Most Controversial Pipeline Clears Final Hurdle

Denmark has granted Russia’s state-controlled energy company Gazprom permission to build a controversial gas export pipeline through Danish waters.

The October 30 approval removes the last major regulatory hurdle for Gazprom to complete its 1,230 kilometer Nord Stream 2 pipeline along the Baltic Sea floor from Russia to Germany.

The Danish decision puts greater pressure on U.S. Congress to quickly pass a sanctions bill to halt the project before it is completed.

Washington has opposed the project over concern it will increase Europe’s dependence on Russian energy, boost the Kremlin’s coffers for military adventures, and hurt Ukraine.

President Donald Trump has recommended Germany import U.S. liquefied natural gas instead.

The Danish Energy Agency (DEA) said in a statement that it approved a 147-kilometer southeastern pipeline route proposed by Nord Stream 2, which is owned by Gazprom.

The DEA had been studying several proposals by the company since April 2017.

During a visit to Budapest, Russian President Vladimir Putin welcomed the Danish decision, telling reporters that the Scandinavian country “has shown itself to be a responsible international partner, protecting its interests and its sovereignty, as well as interests of its main partners in Europe.”

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Nord Stream 2 is to carry 55 billion cubic meters (bcm) of natural gas annually to Germany, doubling the country’s imports from Russia.

The company expects to complete the project - which is more than 70 percent built - in the coming months.

Russia has historically exported natural gas through Ukraine, which currently earns from $2 billion to $3 billion a year in transportation fees, a significant amount of money for its struggling economy.

But Moscow has sought to reroute European gas exports around Ukraine via offshore pipelines amid worsening relations with Kyiv, which is pushing for closer ties to the West.

The United States is seeking to block the project with members of both the Senate and the House introducing two separate bills to sanction companies involved with Nord Stream 2 construction.

The bills must be reconciled and passed by both chambers of Congress and signed by Trump to become law.

The Senate Foreign Relations Committee in July overwhelmingly passed a bill to sanction vessels helping lay the Nord Stream 2 pipeline.

Senator Ted Cruz (Republican-Texas), who introduced the sanctions bill, said in September that it is an effective measure because there are only a few companies in the world that have the technology to lay deep-sea pipes.

Cruz’s enshrined bill has yet to be brought to the Senate floor for a hearing, while the House bill has yet to pass committee hearings.

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U.S. congressional members are still holding out hope for the passage, but Cruz said “time is running out to stop Nord Stream 2.”

“In a few short months, Russia will have completed its natural gas pipeline – putting President Putin in a position to further expand his military, exploit our European allies, and threaten U.S. energy security,” the senator said in a statement sent by his office to RFE/RL.

“I continue to urge the rest of our colleagues in the Senate to quickly pass our bipartisan bill, halt this pipeline, and deprive President Putin the resources to fuel his expansionism and military aggression,” he added.

Ukrainian officials last week traveled to Capitol Hill to again lobby for the proposed sanctions legislation.

By Radio Free Europe

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  • Mamdouh Salameh on October 31 2019 said:
    Despite pressure by the United States, Poland and other Baltic States, Denmark took the right decision to grant Russia’s gas Giant Gazprom permission to build the Nord Stream 2 gas pipeline through Danish waters under the Baltic Sea from Russia to Germany. Denmark’s decision removes the last hurdle to the completion of the pipeline expected by the end of December this year.

    Even if Denmark refused to grant permission to Gazprom, this wouldn’t have stopped the project since the pipeline would have been rerouted away from Danish waters.

    And despite threats of sanctions by the Trump administration and US Congress, Nord Stream 2 is unstoppable for the following reasons.

    The first is that Germany and Gazprom have always considered Nord Stream 2 first and foremost an economic project which will bring uninterrupted and cheap Russian gas supplies to Germany and the European Union (EU) thus ensuring energy security to the whole of the EU. Germany needs more gas supplies since it is on the way to phasing out coal-fired electricity generation by 2038 with the aim of cutting carbon emissions and also phasing out nuclear electricity by 2022. And Gazprom is looking forward to expanding both its business and return on investments worldwide. Therefore, expanding an already-dominant position in the EU’s gas market should be no exception. Gazprom could be looking forward to enhancing its market share from almost 40 % currently to more than 45%-50% in the next decade.

    The second reason is that even if the United States decided to impose sanctions on European companies involved in the financing and the construction of Nord Stream 2, Gazprom and Germany can finance the project without any need to borrow money.

    The third reason is that the German Chancellor Angela Merkel would have never succumbed to US threats of sanctions against her country. She believes that EU energy policies should be determined in Europe and not in Washington.

    A fourth reason is that Nord Stream 2 will bring extra Russian gas supplies to the EU at a time when the EU demand for gas and LNG is growing by leaps and bounds whilst European gas production is projected to halve by 2040 particularly with the planned shutdown of the Groningen gas field in the Netherlands by 2030.

    A fifth reason is that the majority of Europeans believe that US opposition to Nord Stream 2 has far less to do with Russia’s tightening its grip on the EU gas market and far more to do with self-interest, namely replacing Russian piped gas with US LNG exports.

    A sixth reason is that the EU gas and LNG market is growing so fast that it can accommodate all Russian natural gas supplies plus more LNG supplies from the United States, Qatar and Russia.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • Robert Berke on October 30 2019 said:
    US to world: Buy my gas or will sanction you.

Leave a comment

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