Nord Stream 2: Good for Germany, Better for Russia, and Bad for the US!

Recently the Russian President, Vladimir Putin announced the completion of the first stage of the controversial Nord Stream 2 (NS2) pipeline that will deliver Russian gas to Germany.

Considering the rapid decline of the European Union (EU)’s domestic gas production, Russia is well-positioned to supply and meet the EU’s energy needs. The EU wants to ensure reliable, affordable and sustainable new gas supplies. NS2 pipeline provides this by transporting gas from the world’s largest reserves in Russia to the EU internal market.

No one is denying how controversial NS2 has been/is. There are geopolitical and economic reasons for why that is. From a geopolitical aspect, the U.S. has pressed Germany to pull the plague on the project, but failed miserably to the point of threatening to sanction its longtime ally.

Equally important, some EU countries like Slovakia and Poland will lose revenues from having the NS2 pipelines bypass their territories leaving them without collecting lucrative gas transit fees. Ukraine, specifically, is hit hard by this loss of revenue as it stands to lose about $2 billion on gas transit fees per year, a key source of income for Ukraine.

Economically, Germany used up a record 53 billion cubic meters of Russian gas or about 40% of its total gas consumption in 2017. NS2’s delivery system is designed to carry up to 55 billion cubic meters (1.942 trillion cubic feet) of gas per year. We can now understand why Germany pushed back against the U.S., and rightly so, if I may add!

One thing is sure: With European gas fields nearly spent and Germany phasing out nuclear power, Berlin needs a reliable source of energy to facilitate its long-term shift to renewable sources. NS2 is the perfect and most economical solution.

David Oualaalou is a Geopolitical Consultant, Award Winning Educator, Veteran, Author, and former International Security analyst in Washington, D.C.