Page 12 - NorthAmOil Week 37 2021

NorthAmOil POLICY NorthAmOil

US lawmakers make last ditch effort to

kill off the Nord Stream 2 gas pipeline

US-EUROPE US lawmakers made a last-ditch effort on Sep-
tember 14 to kill off Russia’s recently completed
Nord Stream 2 gas pipeline, which is now com-
pleted but not yet in operation.
Blocking the pipeline that will bypass Ukraine
and damage US sales of LNG to the European
market is one of the few issues that unite both
sides of the house. However, attempts to sanction
the pipeline to death have failed after US Presi-
dent Joe Biden gave the pipeline a waiver in May
this year, admitting it was a fait accompli.
That has not stopped energy sector lobbyists
from trying to stop the pipeline from going into
operation. A group of lawmakers from both
sides of the aisle introduced an amendment led
by Representatives Republican Michael McCaul
and Democrat Marcy Kaptur and about eight
other lawmakers that orders the president to metres this week. Some pundits have speculated The Rules Committee
impose sanctions on any entity responsible for Russia is causing the shortages by refusing to has a meeting
the planning, construction, or operation of the transit gas via Ukraine; however, Gazprom has scheduled for
Nord Stream 2 pipeline, RFE/RL reports. stuck to the terms of its new transit deal signed at September 20 to decide
It also authorises new mandatory sanctions the last minute in December 2019 that commits whether to include
to foreign entities and individuals responsible the Russian gas giant to send 40bn cubic metres the Nord Stream 2
for the planning, construction and operation of via Ukraine’s Druzhba pipeline until 2024. amendment in the
Nord Stream 2. Moreover, Gazprom has bought extra “guar- NDAA.
The pipeline was finished but it is now stand- anteed” capacity at the Gas Transmission Sys-
ing idle as the final tests and inspections are car- tem Operator of Ukraine (GTSOU) auctions,
ried out. It must also gain EU permits before it but has not bought “interruptible” capacity, of
can go into operation. Under the EU third pack- which more was on offer. GTSOU has offered
age energy regulations, in theory the Russian gas the interruptible capacity at the same price as the
company Gazprom will have to share at least half guaranteed capacity, whereas usually the inter-
of the pipeline’s capacity, as the EU rules forbid ruptible capacity is offered at a 60% discount to
it being both the owner and the operator of the the guaranteed capacity.
pipeline. The sister pipeline Nord Stream 1 has The Biden administration agreed to waive
a waiver that allows Gazprom to completely sanctions on the pipeline in a deal with Ger-
The Biden fill that pipeline with gas, but Gazprom has so many that has backed the pipeline and which
far been unable to gain a waiver for the second will improve the latter’s own energy security
administration pipeline. by not routing its gas supplies via a warzone
and will supply significantly cheaper gas, as the
Russia may dodge the rules by allowing Rus-
agreed to waive sian oil major Rosneft to export gas via Nord direct connection between the two countries
sanctions on the Stream 2, thus breaking Gazprom’s export means transit fees will be less than routing it via
monopoly that the company has jealously Germany.
pipeline in a deal guarded for decades. The amendment sponsored by McCaul and
The Russian Ministry of Energy will report to Kaptur was submitted to defence funding legis-
with Germany. the government on potentially allowing state oil lation under consideration by the House Rules
giant Rosneft access to gas exports “in the com- Committee.
ing days”, according to Interfax quoting Vice- The legislation, known as the National
Prime Minister Alexander Novak, who curates Defence Authorization Act (NDAA), has been
the energy sector, on September 15. used the past two years to impose sanctions on
Gazprom has said that it hopes the pipeline Nord Stream 2, delaying its completion by more
can go into operation on October 1, but the EU than a year, RFE/RL reports.
certification process could take several months The Rules Committee has a meeting
and may not be completed until January, accord- scheduled for September 20 to decide
ing to some reports. whether to include the Nord Stream 2
In the meantime, shortages of gas and low amendment in the NDAA. Lawmakers have
storage levels just ahead of the heating season the option to defer to the House Foreign
that starts in October have driven up prices Affairs Committee, as it did last year when
to record levels over $900 per thousand cubic similar legislation was proposed.™

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