Explained: Why the Nord Stream 2 pipeline between Germany and Russia is controversial

In a development that could ratchet up tensions between the United States and Germany, the consortium building the Nord Stream 2 pipeline has said that it has resumed work on the controversial project.

On Saturday, Russian energy major Gazprom said that it had resumed laying pipes in Danish waters, defying US sanctions.

“All works are performed in line with the relevant permits. We will provide further information about the construction works and further planning in due time,” the consortium said about the project, which will double the amount of natural gas exported from Russia to Germany through the Baltic Sea.

The Nord Stream 2 pipeline

In 2015, Gazprom and 5 other European energy firms decided to build Nord Stream 2, valued at around $11 billion. The 1,200 km pipeline will run from Ust-Luga in Russia to Greifswald in Germany, and will carry 55 billion cubic metres of gas per year.

The under-construction pipeline will run along the already-completed Nord Stream 1 system, and the two together will supply an aggregate of 110 billion cubic metres of gas to Germany per year.

The pipeline falls in German and Danish territory, and all but 150 km of pipes for the project have already been laid.

Why the pipeline is controversial

Since it was first planned, Nord Stream 2 has drawn criticism from the US, where both the Democratic and Republican parties believe that the project would increase Europe’s dependence on Russia for natural gas, thus boldening its President Vladimir Putin. Currently, EU countries already rely on Russia for 40% of their gas needs.

The project has also irked Ukraine, whose ties with Russia have seriously deteriorated in the aftermath of the Crimean conflict in 2014. There is an existing land pipeline between Russia and Europe that runs through Ukraine, which feels that once Nord Storm 2 is completed, Russia could bypass the Ukrainian pipeline, and deprive the country of lucrative transit fees.

France has also expressed its opposition to the project, as have some others in Eastern Europe.

Germany, however, has solidly stood behind the Nord Stream 2, despite opposition from allies, with Chancellor Angela Merkel’s government insisting that it is a commercial project. Critics of the US position say that Washington is forcing Europe to buy its sea-borne liquified natural gas.

Avoiding America’s wrath

In December 2019, work on the project was suspended due the threat of US sanctions. Then in January this year, the US carried out its threat for the first time, imposing sanctions on a Russian ship tasked with laying pipes for the project. Although work on the project has resumed, experts believe that US sanctions could still end it.

According to The Economist, a possible way to salvage the project and allay Washington’s fears would be by imposing automatic sanctions on Russia should it decide to stop using the land pipelines through Ukraine and deprive it of transit fees.