[Opinion] Europe Without Nord Stream 2

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[Opinion] Europe Without Nord Stream 2

Thu, 02/24/2022 - 15:18
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Nord stream 2 shut down (© Shutterstock/mmaroznaya)
Nord stream 2 shut down (© Shutterstock/mmaroznaya)

A few months ago, around the time that the final pipeline segments were put down into the Baltic to complete construction of the 1200-km Nord Stream 2, we wrote on these pages that Nord Stream 2 was experiencing a painful and difficult birth.  Fast forward to today and the threatening massive ground war in the Ukraine and possibly other countries in Europe since 1945, we've entered a different universe, one never thought possible in the Europe of today.  

Given the prominence of German Chancellor Olaf Scholz's decision to halt the certification of Nord Stream 2, effectively placing the pipeline in limbo for the foreseeable future and perhaps forever (some have said this sounds the death knell for Nord Stream 2) , one sees how important Nord Stream 2 is perceived by those contesting the future of the Ukraine.

There are those in Germany who seem happy with the pipeline's demise, as its eventual operation would have significantly deepened German dependency on Russian gas. Now Germany will have to seek other suppliers.  And there are a number of candidates with substantial gas reserves who would like to step into the vacuum, but there are caveats attached to each.

Iran, for example, has some of the largest if not the largest gas reserves and patrons may want to take another look at the transboundary Nabucco Pipeline given current geopolitical realities.  Similarly the United States has abundant gas reserves and has already amped up LNG deliveries to Europe.  For LNG to gain real traction in Europe, however, the Europeans will have to build the requisite import terminals and inland storage plants for it to be a viable alternative to gas via pipeline.  And Algeria and Egypt have indicated they will increase their own comparatively modest gas production for Europe to partially offset what is peaceful times would come from Russia.  The matter of using repurposed gas pipelines for hydrogen will likely get a boost because of the Ukraine crisis as well.

It seems clear that given the high probability of war in the Ukraine any natural gas imports from Russia will be off the table for some time to come and an extended period of alternative sourcing  and self reliance will prevail.

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