Europe’s energy and a nightmare of a mega project!
Let’s take a look at how the mega project of overcoming Europe’s energy crisis at the hands of Germany, before seeing the light , Ukraine crisis became a nightmare in the war with Russia.
To begin with the USSR. Gaining independence from the Soviet Union, Armenia , Azerbaijan , Belarus , Estonia , Georgia , Kazakhstan , Kyrgyzstan, Latvia, Lithuania, Moldova, Tajikistan, Turkmenistan , Uzbekistan , and Ukraine. Only Russia survives and USSR dissappears .
For our main discussion, we will focus mainly on energy leaving aside some other more pressing issues for now.
The countries that broke away from the USSR were close to the European Union by Geograpically .
while almost half of these countries were rich in various types of industrialisation and natural resourses like oil , gas etc. also GDP was advanced then Russia alone . For example, Ukraine Natural gas reserves are estimated at 5.4 trillion cubic metres (tcm), with proven reserves of 1.1 tcm of natural gas, more than 400 million tonnes (Mt) of gas condensate and 850 Mt of oil reserves.
on the other hand USSR has a century-long history of oil and gas production and substantial conventional and unconventional hydrocarbon reserves. Indeed, its oil production in 1965 (173.5 million tons) was still far from the maximum that it reached ten years later (about 225 million tons). However, in 1980, output was 188 million tons; it fell to 135.5 million tons in 1985, and only 109 million tons in 1990. Even after the collapse of the Soviet Union, Russia continued to try to build good relations with its rich separatist countries. For example, although Crimea was once occupied by the Russian fleet, it was handed back to Ukraine in 1954 . The objective was to build a strong economic zone by extracting oil and gas while maintaining good relations.
Oil and gas have always been the world’s most valuable minerals. The world needs oil and gas for its driving force. Various green-energy technologies, lithium ,solar energy , nuclear and coal-based reactors, or other means are being tried to reduce dependence on oil and gas.
Climate change has become a major issue affecting the entire world. Russia had good relations with European countries, especially Germany. Russia has joined Germany in a mega project. The name of this world famous mega project is Nord Stream Pipeline, through the oil and gas will go to different European countries. The consumption volume of natural gas in the European Union (EU) amounted to 34 billion cubic meters (bcm) in March 2023. The pattern shows that the monthly natural gas consumption in the EU is highest in the colder months December and January, and lower during warmer months as spring and summer approach.This supply of gas and oil at relatively low prices a huge concerns for Europe’s industrialization and heating systems .
The second major project(Germany to EU ), the Nord Stream pipeline, is about to open, 99% work was done ..the problems was waiting to start . EU’s closeness to Ukraine has drawn Russia into an all-out war with Ukraine. The Nordic pipeline, which is about to be opened, has fallen on its face.
The pipeline, named Nordstream-1, was inaugurated in 2011. Its budget was 8 billion dollars. (NS-1), the pipeline runs from Vyborg in northwestern Russia near Finland and entered service in 2011. Operated by German since 31 August 2002 it has been closed due to various reasons.
Since January 2022, European natural gas demand has decreased significantly. Compared to the average across the period 2019 to 2021, European countries consumed 490 TWh less (or 12%) in 2022, and 860 TWh less (or 20%) in 2023. Figure 1 compares the total reduction in gas demand across countries since January 2022.
The new pipeline was redeveloped to increase export to European more countries with the aim of doubling the annual capacity by Nordstream-2 (NS-2) the new ready pipeline, But the project was stopped on February 7, 2022 due to Russia’s war in Ukraine.
The Nordstream-2 project was opposed by the United States from the beginning. Initially USA advise ,it would increase the dependence of German and European countries on Russian Hegemony. The United States later imposed sanctions on companies involved in the project. The U.S. sanctions were criticized heavily by German politicians as “a serious interference in the internal affairs of Germany and Europe and their sovereignty. On 6 February 2022, speaking at a joint news conference with German chancellor Olaf Scholz, American president Joe Biden said “If Russia invades … Ukraine again, then there will be no longer a Nord Stream 2. We will bring an end to it.” When asked how he would do that, he responded, “I promise you, we’ll be able to do it.”But in the further Germany, European Union did not want to get involved in the conflict with USA .The Nord Stream twin pipeline system through the Baltic Sea runs from Vyborg, Russia to Lubmin near Greifswald, Germany. The pipelines were built and are operated by Nord Stream AG.
The entire project had a 51% share of Russia with German, Dutch and French stake holders. It is the first pipeline to deliver Russian natural gas directly to Western Europe, bypassing Ukraine and Poland. It is noted here that the consumption of natural gas in the European Union is 34 billion cubic meters (BCM). The supply of this gas is very necessary for the European Union, especially during the winter months of December, January and February. The 27 countries of the European Union consume more than 350 billion cubic meters of gas, with Norway and the United States previously the top suppliers. Also there also some African countries and United Kingdom and Qatar. Due to the failure of this gas line project, there is a strong demand for gas across Europe, with prices currently rising by more than 19%. As the gas line project was about to open, plans were By 2021, around half of Europe’s 324 coal-fueled power plants had either closed or announced a retirement date before 2030. Bruegel data shows that electricity generated by coal-fired power plants in the EU and UK declined by more than 40% between 2015 and 2020 And was announced to be discontinued by 2030. issue of the carbon emission reduction goals with CO2 capture net -Zero Solutions.
Nord Stream 1 opened in November 2011, having cost 7.4 billion euros ($8 billion). Construction of the $11 billion Nord Stream 2 was completed in September 2021, but it never came onstream before Germany froze the project as Russia was about to send troops into Ukraine in February 2022.
This is where a major EU dream project ends. Which has a huge impact on the European economy.
Current time is April 2024. Russia shows no signs of stopping the war in Ukraine. The rate of gradual increase in oil and gas prices has to bear the economic pressure of every country and the wide cost affective issue is being observed in the economic activities including inflation. Not only economic activities are dependent on fuel oil but there are many other important issues. To summarize the discussion, here is a fairly brief overview of the Nordic Pipeline nightmare, bypassing several important points. Maybe in the future I will try to deal with other issues in a bigger way.
KNN Linku
Writer, Columnist
knnlinku @ gmail.com
