1. Energy Security a Thread
last week @laurentruseckas, afterthe @cepa seminar argued that NS2 does not represent a threat to energy securityas ‘diverting some Russian gas from one route to another does not affect the level of dependence on Russian gas, nor EU energy security’

2. I side here with @BLSchmitt @JhnEdHerbst @M_Assenova @apolyakova I think one can only take the view of @laurentruseckasl if one ignores the market history of European and particularly CE gas market of the last 30 years and the impact of NS2 on CE markets

3.Lets start with the history. We have substantial evidence of politically motivated Russian energy cut offs from Robert Larsson in his seminal work on the subject for the Swedish Defence Research Agency (FOI).
See: https://ntrl.ntis.gov/NTRL/dashboard/searchResults/titleDetail/PB2007106453.xhtml

4.Larsson identified over 40 politically motivated cut offs by Russian state controlled, directed and owned energy companies in the oil and gas sector between 1991-2004.

5.We have on top evidence from across CE Europe before and after joining the Union of further threats of cut off, of states living in the shadow of those threats. In addition to the Ukrainian transit disputes in 2006 and 2009

6. In 2014-2015 Moscow threatened to reduce supplies to CE states who supplied Ukraine Russian gas on ‘reverse flow’. Subsequently gas flows were cut to Hungary, Poland and Slovakia for daring to disobey Moscow. https://www.osw.waw.pl/en/publikacje/analyses/2014-09-17/central-european-problems-russian-gas-supplies

7.And that recent history plays directly into the controversy surrounding NS2. When the German government tried to reassure Warsaw that gas flows via EUGAL and OPAL pipelines, so from West to East, they were not unnaturally skeptical.

8.‘What Moscow did to Ukraine they could do to us’. What is the value of a German guarantee of supply if Moscow reduces the flow of gas along NS2? They did it before they could do it again.

9.Currently the CE states have some security flowing from the Brotherhood pipeline. Its spare capacity plus the existing flow of transit gas combined with EU and ECT liberalisation rules permit that gas to be traded by physical and virtual reverse flows.

10.This creates more market liberalisation, more price competition, greater flexibility and reduces Gazprom’s market and political power.

11.This is reinforced by the fact that once transited gas leaves Russian territory, Gazprom loses all control over the pipeline network reducing its capacity to control direction, flow and ultimate customer.

12. One of the objectives of NS2 is to terminate the use of the Brotherhood pipeline network (now with the December 2019 transit deal at the latest by end of 2024).

13.Termination will not only end Ukrainian transit fees, but also to undermine Ukraine’s access to non-Gazprom controlled ‘reverse flow’ gas, undermining its supply security.

14.Meanwhile we would have NS2 landing at Greifswald with a further 55bcm of annual capacity. Already OPAL can take approximately 20bcm of gas eastward via the OPAL pipeline. NS2’s principal connecting pipeline EUGAL also goes eastward with a further 50bcm of capacity.

15.The security issue here is that with that scale of flows (approximately 70bcm) arriving in CE Europe on Russian owned pipes, and then via pipes part owned or owned by allies, Gazprom is able to flood the West to East interconnectors.

16. In essence NS2 is enabling Gazprom to split the EU single gas market in two. A well-supplied and diversified Western European gas market and a Gazprom dominated CE market-once it has closed down the Brotherhood pipeline.

17. This supply security threat explains in part why Poland is expanding its LNG capacity and constructing the Baltic Pipeline.

18. So @laurentruseckas, we have a pipeline that can provide Moscow with leverage to reduce west to east flows (it has done it before); removes the impact of liberalisation of flows between CE states and the EU, undermines Ukrainian supply security & splits the single market.

19.Furthermore, one could at least argue with NS1 that you had greater route diversity, NS1, Yamal and Brotherhood. However, with NS2 and the putative closure of Brotherhood one is in fact reducing the number of routes available (given NS1 & NS2 largely follow the same route).

20.Worse still NS1 and NS2 now almost 70% of Russian gas exports to the EU will run along, for most of the way, a two km channel with each pipe 500m apart. How does placing so much gas in one narrow corridor in a shallow sea add to European supply security?

21.Furthermore, Brotherhood has huge capacity (approx. 140bcm, to NS2’s 55bcm) has great surge capacity in winter and plenty of storage (approx. 32bcm on the Ukrainian side) further protecting European supply security..most of which will be lost from end of 2024.

22. It is not surprising therefore that most Europeans oppose the project, the European Parliament voted in favour of its cancellation and US sanctions have the support of most EU states, ENDs.