EU Energy Policy and Energy Democracy

In the third panel, we will discuss Nord Stream 2 and the different perspectives of the most controversial energy project in the world. Is this pipeline an economic or political project, and what are the views of its opponents? The production of electricity from gas emits 50% less CO2 compared to coal, which contributes to achieving climate goals, and natural gas from underground deposits has a significantly better carbon footprint than LNG produced from shale. Nord Stream 2 can supply cheaper and cleaner Russian gas to much of northern and Central Europe, especially in the face of a significant drop in domestic production and an expected increase in consumption. However, not everything is so simple. North Stream 2 from Russia with its 2300 km passed through the Baltic Sea to Germany, and only a hundred kilometers separates it from the completion on the German mainland. Since the United States imposed sanctions on companies that install pipes for the project, it is not progressing as fast as expected. There are open issues on the part of the EU in terms of the implementation of the Gas Directive and its jurisdiction. The European Parliament is passing resolutions against the project, and recently the Polish competition authority issued a verdict against Gazprom and five European companies-investors in Nord Stream 2 with draconian penalties. Efforts to stop the project have brought together various political motives: the EU’s current position that gas cannot be considered a transitional fuel because it will jeopardize the achievement of EU climate goals and slow down the use of renewables and energy efficiency; consequently a ban on financing gas infrastructure from EU Funds in the programming period 2021-2027, and thinking about banning the use of natural gas in new installations after 2030; the EIB’s position to drastically reduce investment in the gas sector; to the view that this pipeline will in fact reduce the security of energy supply of the EU and weaken the principle of solidarity as one of the pillars of the Energy Union.

The questionable economic viability of the project is becoming another problem, because even Gazprom envisages the delivery of about 200 bcm per year for the EU for the period 2020-2030, and the existing capacities enable the transport of 270 bcm. Meanwhile, the European Commission is coming out with the Hydrogen Strategy as the energy source of the future after 2030, initiatives supporting the strategy are strengthening across the EU, but the fight in the hydrogen ring is between “green” hydrogen originating from renewable sources and “blue” and “gray” hydrogen originating from natural gas. There are emotional debates on this topic in the Bundestag. The gas pipeline is connected with every move of the Russian leadership in relation to the EU. What is the fate of the project? What is the role of gas in the EU’s new energy vision? Will the new US administration try even harder to stop the project? Can Europeans reach a unified position on the pipeline and US extraterritorial sanctions? Is this kind of geopolitical struggle a relic of the Cold War or is it a purely market game of American LNG against cheaper Russian energy? Will blue and gray hydrogen win in the hydrogen ring and thus prolong the life of natural gas? And will this debate cease to be topical in 2025, when gas transit through Ukraine will be minimized?