Europe

Poland’s continues quest to delay the start of Nord Stream 2

Polish state-owned gas company PGNiG said on August 2 it expects to be granted participation in certification proceedings concerning the controversial Nord Stream 2 gas pipeline from Russia to Germany bypassing Ukraine.

PGNiG has submitted a request to the German regulator BNetzA for granting participation in the Nord Stream 2 AG certification procedure, Katja Yafimava, a senior research fellow at the Oxford Institute for Energy Studies, told New Europe, reminding that Poland and its 100% state-owned company PGNiG have a history of trying to complicate the development and utilisation of Russian transit-diversification gas export infrastructure such as Nord Stream 2. She cited as an example the Polish complaint at the Court of Justice of the European Union (CJEU) against the 2016 OPAL exemption and Nord Stream 2, the Polish competition authority refusal to approve the Nord Stream 2 Joint Venture between Russian gas monopoly Gazprom and five European companies as a result of which Gazprom became the sole shareholder and a subsequent fine in respect of joint financing.

“Poland’s request to BNetzA to participate in Nord Stream 2 certification process is part of the same story. It reflects Poland’s continued quest to delay the start of Nord Stream 2 operations and to limit its utilization,” Yafimava said, noting that this is made very clear by the PGNiG’s press release, which states bluntly that Nord Stream 2 request for certification should be rejected.

On its part, BNetzA, acting within its power and duty, has itself requested Nord Stream 2 AG to apply for certification thus effectively suggesting that certification – subject to conditions – is both possible and necessary, Yafimava explained. “BNetzA is not obliged to grant the PGNiG’s request of joining the certification process, and indeed may be wary of granting it given that PGNiG has made it clear that it is against certification full stop,” she said, adding that the German regulator is capable of assessing the impact of energy solidarity principle on its Nord Stream 2 certification decision without necessarily granting the PGNiG’s request to participate. “But even if BNeztA does not allow PGNiG’s participation, PGNiG would have another possibility to express its views on the BNeztA’s draft certification decision when BNetzA provides it to the European Commission for issuing an opinion, at which stage the Commission may seek views of different parties, including PGNiG,” Yafimava said.

Chris Weafer, CEO and General Director of Macro-Advisory in Moscow, told New Europe on August 5 that PGNiG may be granted participation in the certification process for gas crossing Germany’s border to Poland and top other EU states, such as the gas that will flow via the OPAL pipeline. “But it is most not at all likely that Poland will be allowed any determining role in certifying the gas flow that lands in Germany via Nord Stream 2. Poland will not be allowed to block the completion of the project,” he argued.

Weafer reminded that Germany has fought a major battle with the United States to ensure that Nord Stream 2 is completed and that the gas will flow from Russia. “That was a very significant political battle and one that will hang over US-German relations, especially as far as the US Congress is concerned, for a very long time,” he said.

According to Weafer, given the battle that Germany has had with the US, it is inconceivable that Berlin would now allow Poland, a declared opponent of Nord Stream 2, to have any sort of veto over the completion of the pipeline.

“I assume that PGNiG’s request for participation in the certification procedure is part of a negotiation process so that Poland will be able to secure a sufficient future gas supply from, or via, Germany to allow it access sufficient gas volumes to reach the carbon emission targets set by the EU,” Weafer said, adding that Poland is one of the country’s most exposed to the EU’s emission target program as, today, almost 75% of its power generation comes from coal. It will certainly invest more in renewables but to have any chance of even coming close to the EU target it will have to start switching from coal to gas as its main fuel source.

“Therefore, I see Poland’s action as A) accepting that Nord Stream 2 is now a done deal and B) an effort to make sure it has a role which can ensure it gets the gas it will need to meet the EU emission targets,” Weafer said.

Meanwhile, the chairman of the US Senate Foreign Relations Committee issued a statement on August 2, along with counterparts from several European parliaments, opposing the recent agreement between Washington and Germany to allow completion of Nord Stream 2. “This is just a political statement and will have no impact on the White House position regarding Nord Stream 2,” Weafer said. He noted that the statement by Democratic Senator Bob Menendez, which is unattached to any draft legislation, is simply that: a statement, and something most senior Senators do all day and every day.  Senator Menendez is one of the most prolific in issuing such statements on multiple issues. “It is more about him positioning himself as a senior legislator or statesman and it therefore suits him to be heard commenting on all topical issues, especially in the geopolitical sphere,” Weafer said.

“It should be noted that there have been several Republican party efforts in both the Senate and the House to move draft bills to overturn the While House sanctions waivers against Nord Stream 2 AG and its CEO but no Democrats have signed on or taken any action to contradict the actions of the President. Nor will they,” Weafer said.

US President Joe Biden and German Chancellor Angela Merkel engaged in a high-level discussion and agreed a deal that recognises the completion of the project.  “Hence, neither PGNiG nor the Republican party in the US Congress will be allowed to change that. It is simply far too late,” Weafer said.

For Yafimava, the joint statement by the heads of foreign affairs committees – led by the US and joined by eight other countries – is as an attempt to put pressure on the Biden’s administration in the run up to the next sanctions report, due to be presented to the Congress in mid-August. “The only specific energy-related point in the statement is its request that ‘any further agreements on Nord Stream 2 necessitate consultations across the transatlantic family’. This suggests that although the statement says it is being issued ‘in opposition’ to the US-German agreement on Nord Stream 2, the Senate has tacitly accepted the agreement but nonetheless wants to distance itself from it,” she said.

According to Yafimava, it is not a coincidence that the statement has been issued ahead of the Senate vote on the State and Foreign Operations (SFOP) Appropriations Bill amendment which is aimed at removing Biden’s right to issue waivers to Nord Stream 2 without the Congress approval and which has recently narrowly passed the House. “The statement could be seen as an attempt by the Senate to get some concessions from the Biden administration as part of the August sanctions report, in exchange for not voting for the amendment. However, I believe that with the US-German agreement on Nord  Stream 2 under its belt, the Biden administration is highly unlikely to rescind the NS2 waiver granted as part of its May sanctions report, and it may or may not issue additional waivers,” she said and added, “But even if the amendment were to be approved by the Senate, it would only take the Biden’s right to issue waivers away from the beginning of the US fiscal year (October 1, 2021) by which time the second line of Nord Stream 2 is near certain to be built”.

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