Summary

The Danish permit for Nord Stream 2 is still pending. The Foreign Ministry could veto Nord Stream 2, since it passes through Danish territorial waters. Since Denmark has considerable own gas resources, it is not dependent on Russian gas. Denmark opposes to the pipeline due to security concerns and its solidarity with the Ukraine and the Baltics in this matter.

As we have agreed on, I continued our work on Denmark’s position towards Nord Stream 2 and looked at the reasons behind Denmark’s opposition towards the pipeline. For contextualization, an overview of the Danish energy and natural gas strategies is presented in the first part of the post.

Background

The Danish permit for Nord Stream 2 is – as the only one – still pending. But on what ground does Denmark delay its decision? In 2017, the Danish parliament passed a law that allows the Foreign Ministry to veto pipelines passing through Danish territorial waters on the ground of foreign policy, defence, and security interests (Act on The Continental Shelf). Before, this has only been possible on the ground of environmental reasons.

As a reaction to the legislative adjustment, Gazprom/Nord Stream 2 has proposed an alternative route that bypasses Danish territorial waters and only passes through Denmark’s exclusive economic zone. While this would lead to a longer route length and higher costs for the pipeline, it would be almost impossible for the Danish government to reject the permit. If a pipeline only passes through the exclusive economic zone of a country, a rejection cannot be based on foreign policy and security concerns, according to the Danish Energy Agency. This is stated in the UN Convention on The Law of The Sea.

Denmark cannot delay its decision much longer and must announce its decision until this summer, according to international law. As one Danish official said, “In some ways this is too big for Denmark”.

Denmark’s Energy And Natural Gas Strategies

Denmark’s energy mix has a higher share of renewable energy in comparison to the EU average (29.3 % vs 13 %) and a lower share of natural gas in comparison to EU average (17.6 % vs 22 %). In total, only 13% of its energy is imported. Due to declining domestic natural gas production, Denmark imports small amounts of natural gas from Norway and Germany. However, Denmark is still a net exporter of gas. According to calculations, the Danish energy system would not be affected drastically, if there was a gas import disruption.

(Paragraphs above are based on Energy Union Factsheet Denmark)

Denmark’s goal is to achieve an energy sector that is fully built on renewable energy sources by 2050, as stated it the government’s Energy Strategy 2050. While the foremost concern with regard to natural gas is its carbon emissions, Denmark mentions the geopolitical aspect of oil and gas supply generally as an additional reason why countries should strive for a future without fossil fuels.

Natural gas, which is in Denmark mostly used for electricity production and district heating, is supposed to be replaced by renewable energy solutions, renewable gas and biogas. Gas power plants are planned to be converted to biogas by 2030. Gas furnaces have been prohibited for newly built buildings since 2013. Also in recent years, electricity generation based on natural gas has declined because of comparatively high prices of natural gas and the low price of EU emission certificates. Nevertheless, gas demand in Denmark is expected to be stable in the next years.

Despite its ambitious renewable energy targets, Denmark wants to ensure gas supply security by constructing new pipelines, such as the Baltic pipe connecting Poland and Denmark and the Tie-in connecting Denmark and Norway. Natural gas is mentioned as a backup resource for times without sufficient supply from renewable sources, in order to maintain supply security. In addition, the government will continue to exploit oil and gas resources for export purposes, in order to generate government revenue, based on a decision by the Danish parliament in 2012.

Reasons For Danish Opposition

Support of The Baltics And Ukraine

In the Nord Stream 2 conflict, Denmark plays an extraordinary role. It is the only country, whose territorial waters (and not only its exclusive economic zone as in the cases of Sweden and Finland) are affected by Nord Stream 2. Thus, Denmark is in a stronger position than Sweden and Finland. Danish political scientist Trine Villumsen Berling thinks that Denmark sees itself as the protecting power of the Baltic states and the voice of Sweden and Finland that did not have any robust reasons for rejecting the permit. Furthermore, Denmark supports the Ukraine as transit country and wants to prevent the Ukraine from being bypassed in the future.

On the other hand, critics say that Denmark allows the USA to use it as “a political tool in the struggle for US geopolitical influence in Europe”. Hans Mouritzen, researcher at the Institute for International Studies, says “This is not about gas, it is one of the most important foreign policy decisions in Denmark since the Cold War”.

Playing For Time

The Danish government is put under immense diplomatic pressure by the USA and Russia as well as by different EU member states and finds itself in the center of this geopolitical trial of strength. Denmark has followed a “wait-and-see” policy for a long time and has hoped for a common solution on EU level, in order to avoid upsetting its most important economic partner Germany. However, Denmark did not receive the desired backing due to disagreements between the member states.

Geopolitical and Security Concerns

Most of the time, Denmark speaks of “security concerns” in general, without elaborating further details. Denmark has expressed disapproval of an allegedly growing bilateral Russian-German geo-strategic cooperation affecting the whole of Europe and opposes to an increasing Russian influence in Europe.

Denmark does not want Gazprom to use its ports while constructing the pipeline. This is seen as a security risk because of the access to its strategic infrastructure. While the USA have called the pipeline a tool for espionage, the Danish government does not share this view.

Increasing Import Dependency of Europe

Denmark criticises the increasing dependence of the EU on Russian gas supposedly coming along with Nord Stream 2.

Energy Independency of Denmark

Denmark is a net exporter of natural gas and is not dependent on Russian gas imports. Therefore, it has no strategic interests in increasing the capacity for Russian gas imports.

Backward Energy Policy And Ecological Concerns

Danish EU Parliamentarians see the gas pipeline as the wrong signal in times of climate change and increasing ambitions for the energy transition in the EU. Also, maritime ecological concerns have been raised. However, Nord Stream 2 has complied with all environmental regulations and assessment obligations so far.

Economic Reasons

Nord Stream 2 could potentially affect the economic benefits of the planned Baltic pipe that will supply the Danish and Polish markets with gas from Norway. An increasing share of cheap Russian pipeline gas in Europe could put “commercial pressure” on projects like the Baltic pipe.