The Magazine for Asian Investors
Nord Stream 2, probably one of the most hotly debated topics in Europe when it comes to energy. The pipeline, which is supposed to bring gas from Russia to Germany, is still waiting for approval from the German Federal Energy Agency.
The construction of the pipeline has been ready since September, but the German Federal Energy Agency unexpectedly interrupted the certification program in November. The reason for this is said to be location problems of the operator of the pipeline Nord Stream 2 AG. At the moment, the company is headquartered in Switzerland but has to establish an independent subsidiary in Germany due to the energy law and requirements from the EU.
So far so good, if there weren’t the conflicts with Russia. As the relationship with the gas supplier Russia and the Western countries is currently strained, the topic of energy, especially gas from Russia, is becoming a political ball game.
The Green Party in Germany sees the pipeline issue as a geostrategic issue and does not rule out stopping the certification of the pipeline. The issue is now also explosive because Germany currently gets its main energy from coal power, but wants to shut it down because of the phase-out of fossil fuels. Natural gas is to serves as a transitional solution, which also produces CO2 but far less than coal. This raises the question of where the gas is to come from, with which the transitional period is to be designed? According to this, the Germans are also partly against the gas from the U.S. which is obtained by fracking. This type of gas extraction is considered extremely harmful to the environment in Germany.
Now, however, support for the pipeline comes from the chairman of the climate committee in the German Bundestag.
He said in an interview with the German newspaper WirtschaftsWoche: “In view of the empty natural gas storage facilities, Nord Stream 2 is definitely a possibility to increase supply and quickly fill up the natural gas storage facilities. This could counteract the painfully high energy prices, which hit small and medium incomes particularly hard.”
He hits the bull’s eye with that. Because while politicians throw geopolitical statements around each other’s ears, citizens have to suffer from high gas prices. In 2021, gas prices in Europe have risen by more than 400%, which is an expensive commodity for the population. Especially in the winter months, many people are dependent on natural gas.
Here the responsible people should explain where the gas is supposed to come from for the transitional phase if one does not want to have Russian gas, considers U.S. gas to be harmful to the environment, and closes the gas fields in Europe.
The new German Chancellor Olaf Scholz also sees the issue of Nord Stream 2 more as a private-sector matter and should not become a political pawn.
The Dutch TTF Hub, the European benchmark for natural gas trading, gained about 5% on Wednesday to reach 93.3 euros per megawatt-hour. This puts gas prices in Europe on hold for the next rally.