After short break am back with you and restarted reading your blog posts. Sorry for the delay! I did not manage to read all but at least some…
I appreciate that you managed to cover almost all Europe. In general I see ~ 4 groups of countries emerging – proponents of NS2, opponents of NS2, mixed perspectives, neutral. Although Ukraine seems – at least to me – a group by itself (magnitude of risks associated with NS2, and so nature and form of its opposition) I understand the work is now a bit more about grouping and aggregating. I do not remember if you include to your research Russia (and its interests motives, policy) or not? It certainly is (relations with Russia, dependence on Russian gas etc) a factor that European countries consider while thinking about Nord Stream 2. Yet of course not the only one – Germany is also such an important factor, and to a lesser extend (but more and more so) the US (see Denmark’s example…).
I appreciate also that you have already start mapping theoretical scenarios for developing common EU policy towards Nord Stream 2 (which does not only relate to NS2 by itself but also wider issues such as EU – Russia relations, or relations between market and policy etc).
I wonder if you see that as a starting point for a brainstorming on possible future scenarios? And have you – knowing more or less motives and interests of groups of countries – already been discussing how those 4 groups are able to influence intra EU debate on NS2 and related policy making? Are there any countries / factors that make one group / actor more effective than the other(s) or in more advantageous position? Is the debate going to result in some kind of sustainable balance and so policy scenario or not? Can this change in time (elections, Brexit, NS2 construction etc) and if yes – how? I assume you could have already been asking all that questions to yourselves or maybe even find other more interesting ones which could result in future in creative brain-storming session on possible future scenarios.
Some technical issues: I try to hyperlink articles etc. where I can (not always have time for research) but am not sure if/when it is helpful. Below the part on Finland/Sweden I linked some bigger texts on Baltic Sea countries perspectives (so relating also to Baltic states…) & some other – below the post on theoretical scenarios for EU’s common policy on NS2. On the other hand I did not insert any links to p. ex. Ukrainian part guessing that it is widely discussed in most of the papers on NS2 you read. But then – these are my guesses. I wonder how you see availability of texts on different countries / groups of countries approaches? Is your research easier / more difficult in some cases? And if you need my help in finding some literature/articles on any of the topics discussed, or anything else – please let me know (also via email).
RE: Slovenia, Romania, Ukraine
Indeed all 3 countries oppose NS2 but still they substantially differ in their interests related to NS2 construction/risks perceived etc. Ukraine is – in my opinion – a quite separate case study from all the other countries (as well as Russia) – as NS2 presents a severe challenge (almost existential one 🙂 ) to the country. What’s interesting all 3 countries you focused on should also be interested in other Russian gas pipeline project – TurkStream …. Do they discuss it, have similar position as on NS2, etc?
As for Slovenia – I think that it is almost neutral re NS2 – it stated its opposition in solidarity gesture towards Lithuania back in 2016 and as a signal of joint position with CEE / SEE countries. Since then I do not see it really activelly engaged in NS2 debate. One cannot really see Slovenia seeking intensively to diversify and/or decrease its dependency on Russian gas. In 2018 it signed a 5 year gas supply contract with Gazprom enabling it to cover ~2/3 of its gas needs with Russian gas. It is buying gas at Baumgarten hub (Austria, in 2017 ~60% supplies from there), and has option to import it also from Italy (LNG) & Croatia (virtual reverse).
Romania is one of the least dependent on energy/gas imports countries in the EU due to its indigenous gas reserves (and potential to increase output). It still is an important transit country for Russian gas coming from Ukraine to Bulgaria & Turkey. It also is a player on regional gas markets, developing new gas pipelines and participating in p.ex. TSI format and directly interested in stable gas & non gas related internal situation in neighbouring Moldova & Ukraine. Its opposition to NS2 is related though not that much with its internal gas market interests/vision but related to more regional focus plus political & security concerns. thanks to Romania’s efforts (probably supported/influenced by other NS2 opponents) we saw a progress in gas directive revision just recently. Perhaps there are other factors also influencing Romanian position vs NS2?
Indeed transit of gas via Ukraine after NS2 completion can decrease substantially. Some say to 30bcm, some say to 10-15bcm, some say to 0. All depends on a. timeframe, b. alternative routes (capacity availability to Gazprom/Russian gas), c. demand for Russian gas/alternative gas availability & economic attractiveness. Decrease in transit revenues will depend on both exact volume of transit and tariff strategy of Naftogaz / Ukrtransgaz. What is interesting is that Ukraine & Russia did not manage to solve their past transit related disputes (Stockholm arbitration award on that has been challanged by Gazprom) and – despite many efforts by the EU – have not managed to find a stable contractual framework for the future. I think that state of play, challenges and future of Ukrainian gas transit – all that is rather strictly connected with NS2 and influences EU policy – so probably should be developed further ….
Indeed NS2 & reduced transit via Ukraine constitutes to Ukraine not only a gas related threat but also an important economic risk and security threat (especially that Ukraine is still in conflict which Russia, with annexed Crimea and de facto state of war in eastern Ukraine) – I think that has been one of key issues in all European and transatlantic debates about NS2 & you could develop that a bit more (if / what kind of security risks related to NS2 construction / decreased transit are there for Ukraine). I am not sure if you (as a group) made already a research on EU position & policy on Ukrainian transit ? that would certainly be complementary to the NS2 debate…
Do not know if you’ve noticed: Ukraine / Ukrainian actors were trying to foster opposition against NS2 within the EU inter alia by intensive diplomatic efforts, organizing events and Fair Energy campaign.
There was also quite significant Russian (& NS2 partners) lobbying activity in EU (& the US), specific member states (p.ex. right now probably in Denmark) for NS2 and against p. ex. gas directive revision or other form of EU’s formal engagement – do you look into that somehow? Plus one more question – do you look into Russian different interests & motives behind NS2?
RE: neutral countries and Italy
General comment: I think you rightfully noticed that there are neutral countries and those ambivalent / with conflicting views on NS2. Am not sure if they should be put all into one basket. But maybe its just a technical issue so not that relevant 🙂
Italy has been critical on NS2 as it has been seeing that as a. unfair if compared with history of South Stream project b. undermining its own position in EU gas market – as you noticed its ambitions to become an important hub but there’s also question of competitiveness of gas imports. . Italy is the third gas market in EU (after Germany & UK – and Greece is far behind them & some CEE countries on 18th place in 2017). Italy imports all or almost all Russian gas via Ukraine so any challenge to Ukrainian transit means currently a challenge for stability & economics of Italian gas supply. Additionally it faces challanges related to other gas supply sources (Algeria) which increases relative importance of stable Russian gas supplies. What is interesting is that Italian opposition to NS2 was not really related to Russia & gas import dependency but more to German policy & role on EU gas market. Change in Italy’s position to NS2 is interesting and indeed related probably mostly to TurkStream. But the critique of NS2 and German policy on that is still visible see p.ex. L’Italia alla canna (tedesca) del gas, & For Italy’s Ruling Nationalists, Energy Security More Important Than Putin’s Friendship
Sweden – indeed it voiced its opposition to NS2 and supported Danish actions related to NS2 on EU level (jointly called for EU engagement). You probably have noticed that Sweden as well as Finland did not have a possibility to block NS2 construction in its EEZ during EIA procedure. And indeed it seems that despite granting permit for NS2 construction Sweden remains critical of NS2
As you mention – there were some mixed interests related to NS2 construction in Sweden related p.ex. to business opportunities for Swedish (& Finnish) ports of Slite and Karlshamn related to pipelaying etc on the one hand on the other security factors raised and opposition voiced by defence ministry & others.
It is also interesting to compare Swedish stance on NS2 with that on NS1 some years ago (Sweden was the country that prolonged the EIA procedure back then due to its security fears, Swedish FOI published back then a quite important report on that)
Finland: Yes it has been neutral on NS2 and gave permit to project’s construction. Nevertheless there was some critique visible from expert community, environmental NGOs and due to some security concerns.
What could be a factor impacting somehow Finland’s position on NS2 was the fact of takeover by Finnish Fortum of shares in Uniper, which is one of the companies co-financing NS2 construction
Historically speaking the very first idea behind NS (called back then Northern European Gas Pipeline project) was raised by Gazprom together with Finish Neste (now Fortum) in 90.
For more background on Baltic Sea states vs NS2 & Russia or Germany see p.ex. Latvian LIIA publication on Perceptions of Germany in the security of the Baltic Sea region, or this (& other texts by Anke Schmidt-Felzmann) or this book (by Danish journalist, now also in German) on Russian lobbying in Denmark, Sweden, Finland for NS1 construction. You could also look for NS2 related publications in quarterly Baltic Rim Economies published by Turku University (Finland)
France: indeed its position on NS2 does not relate that much question of dependence on Russian gas but more commercial interests of key French company, interests related to co-developing EU gas market, political issues related to EU-Russia relations and France-Germany relations. On the other hand there is very interesting evidence by French gas economist Thierry Bros who somehow suggested that financing NS2 may be somehow a challenge for Engie and in case of problems with project’s completion / exploitation he did not exclude it quitting NS2 (see twits by Thierry & p.ex. NGW article)
UK: What is interesting to remember that long time ago the expansion of NS1 to UK was being discussed.
RE: reasons behind the support of Germany, Austria and the Netherlands for Nord Stream 2
Yes, = for these countries NS2 has been most of all economic issue (and it has certainly been presented like that), also related with different than in CEE / SEE perception of security of gas supply challenges. It is also related with gas strategies – on national and on EU level. Nord Stream 2 seems to be a tool to increase mostly German but also Austrian role on EU gas market, enabling Germany to become a key hub for Russian gas in Europe (which is inter alia a source of critique by Italy) & contribute to development of Austrian CEGH. NS2 would also be one of key means enabling to satisfy growing German gas demand in mid term – after nuclear phase out and gradual coal exit . That shows that NS2 fits into wider German energy strategy. In consequence NS2 also has an important strategic dimension for Germany. As you mention – in case of Germany (but perhaps also Austria??) – it seems to be also somehow related to its foreign policy concept of Ostpolitik – if so it would be an important political aspect of NS2 (or not)?
What is interesting for me is that in the process of NS2 project promotion and related controversy Germany had to acknowledge other then economic implications of NS2 plus that it impacts its own political relations in the EU, with its closest neighbours and important economic partners, with the US and with p.ex. EU institutions (EC). It is somehow impacting the way in which Germany is perceived in EU. I wonder if a. there is debate on that in Germany b. if that influences somehow Germany policy / stance
On more general level it shows how German strategic decisions related to energy (phasing out nuclear, coal exit, increasing gas imports from Russia etc) impacts not only German but also neighbouring states markets, and also EU one. That raises question if and how to deal with that on regional / EU level
An interesting critique of German policy on NS2 was published recently by ECFR. Did you find similar debate on the project in Austria?
As for the Netherlands – the support for NS2 here is probably most purely economic one. I wonder did you find anything on how it relates to Netherlands strategy of decreasing gas role in its energy mix? I read a very interesting article (behind paywall unfortunatelly) by Dutch reknown energy journalist Karel Beckamnn claiming that Dutch unease in becoming more dependant on Russian gas imports (especially after MH17 incident) is one of the reasons behind their current strategy to go off natural gas:
“(…)However, the prospect of increasing import dependency on Russia in particular is not something the Dutch people relish. Russia used to be not so unpopular here, but since the downing of the MH17 by pro-Russian Ukrainian forces on July 17, 2014, in which 298 people lost their lives, including 193 Dutch citizens, we are not so enamoured any more of Mr Putin and his government. The blunt truth is that, what with earthquakes and MH17, natural gas now has a bad rap in Holland. (…)”
A very comprehensive overview of Danish position. To add some details:
- The proposed route via Danish EEZ seems less attractive to Denmark itself (passing via rather busy maritime corridor)
- According to Danish Energy Agency (ENS, I was in direct contact with them) there is no rule which says how long permitting procedure can last
- Last week’s media reports suggest Denmark may be considering asking NS2 Ag to apply for a third route passing possible due to recent PL-DK border delimitation agreement. That would enable to prolong the process further, wait until formation of new post summer election government in DK, and for gas directive to enter into force
- Media reports also suggest DK is not happy with the way in which gas directive was revised and Germany received a final say in regulating NS2
- Baltic Pipe is there to ensure that in case of Tyra gas field closure / redevelopment (considered some time ago) both Denmark and Sweden meet the EU’s Security of Gas supply regulation N-1 condition; DK sees it as helping in development of important for country’s needs internal gas infrastructure & to decrease tarrifs for Danish customers
- I think that beside Russia and US also Germany is putting pressure on Denmark
RE: US Sanctions: Update and History – Thanks!
RE: Mapping Out Scenarios For the development of a common EU Policy Towards Nord Stream 2
I really appreciate that – and hope you plan to continue. Below links to some additional texts which perhaps can be helpful.
I wonder if the fact that NS2 is slowly being constructed (and probably will be completed in a few months’ time / a year) doesn’t exclude/modify some of the scenarios you mapped (can the NS2 be put on hold by the EU?).
From what you found it is visible that thinking about theoretical framework / designing common EU policy on NS2 is not only about NS2 but also about different options / perspectives for EU-Russia relations (in gas and beyond), relations between (gas) market and policy, role of EU institutions etc. What is interesting in NS2 case is that EU is clearly split also when it comes to the preferable approach (to project itself, EU-Russia gas relations, EU institutions role in them etc). The question is what happens in such a case of internal split and if/what sustainable/unsustainable solution is available.
I also started to wonder if you also plan to map EU experience in policy making in some chosen (controversial on EU level :)) cases? Key actors that influence and shape such policy? And if/how these ability (or disability) to co-shape EU policy and regulations in key issues works for effectiveness of EU policy and EU’s internal cohesion? Probably that would widen the scope too much, but then perhaps before any kind of brain storming exercise to map possible future scenarios you could think about some more questions on what / how enables or disables development of common EU policy in NS2 case…
Links to some more texts on EU policy & security of gas supply (incl NS2):