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Ukraine: Why Germany matters

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Ukraine: Why Germany matters

  • Russia has announced the withdrawal of some troops from the Ukraine border, but US concerns remain around the Russia-to-Germany Nord Stream 2 gas pipeline.
  • Nord Stream 2, is an undersea gas pipeline from Russia to Germany but is perceived by some as a geopolitical weapon.

About

  • Ukraine is not happy with the pipeline because it bypasses the country and thus denies it transit fees for Russia’s gas exports.
  • It is feared that Russia could cut off gas supplies to Ukraine without endangering its own gas exports to Europe.
  • It could give Russia complete dominance over gas supplies to Europe, and leverage and influence over these countries.
  • It has also awakened old fears in some countries about Russia and Germany coming together against the rest of Europe.
  • Some European Union members have security concerns about the Russian presence in their waters, required to guard the 1,222-km pipeline that goes under the Baltic Sea.

America's concerns

  • The US worry that pipeline could give Russia too much leverage and influence over Europe,
  • Increases the threat of a Russian invasion of Ukraine.
  • The US has opposed the pipeline from start, but Germany pushed ahead with it.
  • Over the last few weeks, Biden and other US officials have been vocal that if Russia invades Ukraine, Nord Stream 2 would be among the first casualties
  • The US sees the coming together of Russia and Germany in an economic partnership as a precursor to promoting its role as the guarantor of security in Europe.

Scholz diplomacy

  • Scholz, who undertook the US visit in response to criticism of “missing in action” during the Ukraine crisis held out reassurance that Germany was not about to break away from its NATO allies.
  • The US, EU and gas
  • The US’s insistent opposition to Nord Stream 2 has revived discussion on an old question asked whenever the US enters an arena of conflict – “is it all about the oil”, or in this case, gas?
  • The EU imports less than 5% of its gas from the US. The top four suppliers are Russia at 41%, Norway at 16%, Algeria at 7.6% and Qatar at 5.2%.
  • But as a net exporter of LNG, the US wants to expand its markets and reach in the continent.
  • US exports are seen by some as vital to the diversification of Europe’s energy supplies, and its energy security.

Nord Stream capacity

  • Nord Stream 2 is an expansion of Nord Stream, which became functional in 2011.
  • It comprises two pipelines with the identical combined carrying capacity of 55 bcm of gas per year.
  • Russia is reported to have exported 168 bcm to Europe through this and other pipelines transiting through Ukraine in 2020.
  • Germany was the biggest buyer at 56 bcm, Italy bought 20 bcm and the Netherlands 11 bcm.

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