conflicts

Germany pulls the plug on major Russian gas pipeline, but not Russian gas 

By Anders Lorenzen

In the wake of Russia invading Ukraine, Germany has finally given in to international pressure and has, for now, cancelled their involvement in Nord Stream 2, a major gas pipeline that would supply Russian gas to Germany. Campaigners have long called for Germany to cancel the project, citing climate grounds.

New German Chancellor, Olaf Scholz, has finally pulled the plug on the $10 bn project.

However as  Germany has also recently decommissioned all its remaining nuclear power plants, Germans have a challenge on their hands plugging the energy supply gap. Coal and gas have largely replaced the previous nuclear supply, with renewables not playing as big a role as the country would have liked. 

Campaigners are unquestionably disappointed that it took a global conflict and not the concern about the climate crisis for Germany to cancel the project.

Not completely dead

But before climate advocates celebrate too much, the project is not completely dead; Chancellor Scholz has simply said that the project can not proceed under current circumstances. It is after all the previous German Chancellor Gerhard Schröder, who is the Chairman of the board at Nord Stream AG, the consortium behind the construction of Nord Stream 1 and he is believed to have a cosy relationship with one of the main players of Nord Stream 2, the Russian state-owned oil and gas producer Gazprom.

It is also important to underline that, while Nord Stream 2 is on the back-burner for now, this does not illustrate Germany reducing its alliance on Russian gas. There has been no change in the gas flowing through other pipeline infrastructure, and Nord Stream 2 would simply have secured additional supplies of Russian gas needed due to Germany’s nuclear decommissioning. On top of that Germany was one of the key players in the EU watering down and creating doubt about banning Russian banks from ‘Swift’, the money transferring technology is critical for Russian oil and gas companies receiving overseas funding. 

Expect there to be further pressure on Germany to reduce its reliance on Russian gas and a renewed discussion about whether the country should restart some of its nuclear power plants.

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