Home Gas effect Where are Biden and Merkel’s sanctions against Putin’s gas weapon?

Where are Biden and Merkel’s sanctions against Putin’s gas weapon?


In July, the president Joe bidenJoe Biden The White House unveils its strategy for the net zero goal in 2050. and German Chancellor Angela Merkel OK to reimpose sanctions if Vladimir PoutineVladimir Vladimirovich Putin Biden disappointed with lack of climate commitments from China and Russia Biden: Russia cannot manipulate natural gas for political purposes Russia sets new record of daily COVID-19 cases ahead of week stay at home PLUS used gas as a “geopolitical weapon”. This agreement was a concession in return for lifting Biden’s sanctions on Nord Stream 2, which allowed its completion. Merkel already had vouched for for continued gas deliveries through Ukraine – a questionable promise from a politician leaving office.

Despite these Biden-Merkel assurances, Putin’s Kremlin has engaged in open blackmail to make Europe hostage to the Russian gas monopoly, Gazprom. Putin’s blackmail aims to force the rapid certification of Gazprom’s Nord Stream 2 gas pipeline by delivering less gas to Europe. Putin’s ultimate goal: to destroy the European Union’s competitive and transparent energy market.

Although Putin uses gas as a geopolitical weapon, the sanctions promised by Biden and Merkel are nowhere to be found – another example of Biden’s toothless foreign policy and Merkel’s unwavering support for “business as usual” with Russia. Another line in the sand was washed away with little or no notice.

According to the European Commission Gas Directive (which was expanded Russian gas), gas suppliers are required to decouple production from delivery, allow third-party access to pipelines and display transparent prices. If Gazprom is considered to be bound by these rules, it must either auction its transport capacity or transfer it to someone else. Gazprom must also reserve up to half the capacity of Nord Stream 2 to competing producers and display its prices transparently.

These rules of the gas directive are unacceptable for Gazprom. Gazprom is not a commercial enterprise. Rather, it is a gas ministry responsible for the Kremlin’s domestic and foreign energy policy. Its mission is to achieve the domination of European energy by controlling gas traffic from eastern and southern Europe.

With the completion of the Nord Stream 2 submarine pipeline, Russia has taken a giant step towards achieving its goal of dominating the European gas market. Nord Stream 2 completely replaces traditional distribution networks across Ukraine, Belarus and Poland. Combined with existing Nord Stream 1 and South Stream, Russia is on track to capture almost half of Europe’s gas demand.

The game is not over. Nord Stream 2 does not have certification by German regulators as organized by German courts. In the preliminary rounds, the German regulators and courts refuse Nord Stream 2 has requested an exemption from the gas directive.

In addition, German regulators and courts must demonstrate that their decisions comply with European Union laws. The Kremlin knows that the European Union has been a opponent Nord Stream 2, so that must be a concern for Putin.

The point: if the gas directive were to apply to Nord Stream 2, Gazprom would be required to behave in part like a competitive company, despite its considerable market share.

In the event of an unfavorable decision, the Kremlin would redouble its efforts to seize the regulations, create shell companies to meet decoupling requirements and strike secret deals to exclude small countries from any European consensus. These countermeasures would take time, and Russia is eager to consolidate its dominance.

In short, Gazprom is in desperate need of a waiver of the gas directive and as such is ready to engage in open energy blackmail to secure a favorable decision from European regulators.

Now that the physical construction of Nord Stream 2 is complete, Gazprom has reduced production and deliveries to ascend spot gas price by a factor of five. He limited the flow of gas through Ukraine to a trickle and not anymore delivers to Hungary via Ukraine as part of a side agreement. Little Moldova is being bullied put aside Rules of the gas directive.

Putin and Gazprom both have declared that Russia will supply more gas if Nord Stream 2 is certified. (Under normal circumstances, certification would not be completed until spring or summer). Putin denies that a gas war is taking place. He insists that Russia has faithfully delivered gas under its long-term contracts. It was Europe’s mistake to rely on purchases on the spot markets. Due to Russia’s tight supply, spot prices are skyrocketing, just as Europe enters its cold months. Quite a blow for Putin as an anxious Europe enters its winter months.

Yes, Russia has declared war on European energy market institutions. Message from Russia: If you want affordable heated apartments and electricity this winter, exempt Nord Stream 2 from your competition rules.

That Russia is waging a war against the EU and its institutions is no surprise. The rest of Europe, especially Eastern Europe, has warned of Nord Stream 2 as a way to eliminate gas transport through Ukraine. Nord Stream 2 was built to remove Ukraine from the energy transport sector and thus give Gazprom the power to dictate Europe’s energy policy.

A new government has not yet been formed in Germany, but it seems clear that the social democratic SPD will be the main partner of any coalition. Over the years, the SPD, with its Ostpoltik, has been steadfast in favor of “business as usual” with Russia. We imagine that the new government will find a way to give in to Putin to secure the energy supply. Indeed, the first promoter of European unity tells his partners that it is every man for himself in terms of energy.