Putin suggests Germany approves Nord Stream 2 to resolve energy crisis

MOSCOW – President Vladimir V. Putin on Wednesday linked the resolution of the natural gas crisis in Europe to obtaining regulatory approval for the Russian-backed and politically charged Nord Stream 2 pipeline.

The prices of natural gas have skyrocketed in recent months, and with them the heating and electricity bills of Europeans. This has only increased Russia’s influence over the continent’s energy policies as its largest supplier of natural gas exports.

Mr. Putin’s comments, during a energy conference in Moscow, were the most direct prices but linked to the approval of the Nord Stream 2 gas pipeline, which connects Russia to Germany under the Baltic Sea and which many Eastern European countries strongly oppose . Gas has not started flowing through it, pending regulatory approval.

“The German regulator should make this decision. They haven’t decided yet, ”Putin told the assembly. “Of course, if we could increase the supply along this route, then at 100%, I can say with absolute certainty, the tension in the European energy market would decrease considerably, and that would influence the prices, of course. It’s obvious. “

The remarks appeared to highlight suspicions in Europe, where some critics believe Russia is withholding additional natural gas from the market to pressure approval of the new 750-mile pipeline.

Nord Stream 2 is the latest of several underwater pipes laid by Russia as part of a decade-long strategy to replace pipelines running through former Soviet and Eastern Bloc countries by bypassing them, through the Black Sea and the Baltic Sea.

Mr Putin said the new pipelines are needed to replace aging infrastructure and ensure uninterrupted service to Europe. But they also deprive countries of some transit fees, create separate gas supply systems for Western and Eastern Europe, and expose former Soviet republics like Ukraine to targeted power cuts, a powerful political weapon. .

The Trump administration has targeted sanctions against German companies that helped build the pipeline for Gazprom, Russia’s energy monopoly, but in August President Biden abandoned the US threat to block it in order to smooth relations with Germany.

The pipeline has also been controversial in US politics. Texas Republican Senator Ted Cruz has blocked confirmation of dozens of Biden diplomatic appointments, including more than 50 potential ambassadors, to insist the president do more to stop European approval of Nord Stream 2.

The surge in gas prices in Europe this fall played Mr. Putin’s game. Russia, the world’s largest exporter of natural gas, supplies around 40% of the gas imported to Europe, which has increasingly turned to natural gas to generate electricity as coal-fired power stations have been closed. As European consumers increasingly pay for electricity, their patience with the intricacies of security policy in Eastern Europe may weaken.

At the conference, called Russian Energy Week, Mr Putin noted that utility bills – and frustration – were rising in Europe. Natural gas is crucial for generating electricity, and he said electricity costs around 10 times more in European Union countries than in Russia.

Energy analysts and business executives say a variety of factors drove costs up, including weather conditions, the sharp acceleration in national economies after pandemic restrictions and high prices in China that prompted U.S. producers of liquefied natural gas to send tankers to Asia rather than Europe.

Responding to criticism that Russia is trying to manipulate natural gas markets to gain approval for Nord Stream 2, Mr Putin denied any Russian role in raising prices. He blamed European Union policies encouraging alternative energy sources, such as wind and solar farms. Mr Putin also pointed out that US exporters of liquefied natural gas had increased their shipments to China rather than boosting supplies to Europe.

Mr Putin said Russia has fulfilled all of its contracts to send gas to Europe and supplied more natural gas this year than last year. Russia, he said, is ready to send more if the companies negotiate new deals with Gazprom.

“We are increasing” Europe’s gas supply, he said. “And if you ask us to increase more, we will. We will increase as much as our partners demand.

Russia has increased its gas supplies through the Ukrainian gas pipeline system, he said, but cannot send more because the pipes are in poor condition. Ukrainian authorities have disputed this claim.

The German regulator has until early January to assess whether Nord Stream 2 complies with European Union regulations which prohibit natural gas producers from owning pipelines that transport it to customers, a question relevant to the degree of control of Gazprom in the European energy market.

The European Commission must then review the decision, which could take until May.

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