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1 1 (February 8, 2021)

handle is hein.crs/govecdf0001 and id is 1 raw text is: Congr~ssi0rnd flesearch Service hd hrmri~J W~ kgkLIna~ d~La4t~ $flK 1 14 Updated February 8, 2021 Russia's Nord Stream 2 Pipeline: Continued Uncertainty Uncertainty continues to cloud thefuture ofNord Stream2, an unfinished naturalgas pipeline that would increase the amount of Russian naturalgas exported directly to Germany and on to other European countries, bypassing Ukraine and other transit states (Figure 1). Successive U.S. Administrations and Congresses have opposed Nord Stream 2, reflecting concerns about European dependence on Russian energy and the threat Russia poses to Ukraine. In January 2021, the Trump Administration imposed congressionally authorized sanctions on the Russian vessel Fortuna and its owner for supporting Nord Stream2's construction. The Biden Administrationhas expres sed oppositionto the pipeline and has stated it intends to review existing sanctions in consultation with European partners. Nord Stream2 construction was initially suspended in December2019, after the passage of U.S. legislation establishing sanctions related to the pipeline. At the time, fewer than 100 miles of the approximately 760-mile long pipeline system(consisting of two parallel lines) remained to be laid. Cons truction of a small sectionresumed in December2020. Although the United States has imposed sanctions on the Fortuna, reports indicate thatthe vessel is continuing its workon thepipeline. TheGerman government continues to support Nord Stream2. German and EU officials, including some opponents ofthe pipeline, have condemned U.S. sanctions as an infringement on national sovereignty that could havenegative repercussions for broader transatlantic cooperation. Background Nord Stream2 is being constructed alongside theNord Stream 1 pipeline, in operation since2011. If completed, Nord Stream2 would double the totalcapacity of the system, from55 billion cubic meters (BCM) to 110 BCM per year. Nord Stream2 is owned by theRus sian state- owned energy company Gazprom. About half the cost is reportedly financed by five European companies: Engie (France), OMV (Austria), Shell (Netherlands/UK), Uniper (Germany), and Wintershall (Germany). Support and Opposition Although the EUhas articulated an ambitious energy diversification strategy, some European governments have not reduced dependence on Russian gas, which accounted for about 45% of EU naturalgas imports in 2019 and 39% of imports in the first half of2020. Factors behind continued reliance on Russian supply include diminishing European gas supplies, financial investments by Rus sia in European infrastructure, and the perception of many Europeans that Russia remains a reliable supplier. Supporters of Nord Stream2, including the German and Austrian governments, argue thepipeline will enhance EU https://crsrepo energy security by increasing thecapacity of a direct and secure supply route. German officials s ay they support the development ofinfrastructure to ensure that gas canbe transported across Europe once it reaches Germany. They stress that Germany supports bro ader European energy supply diversification efforts, including construction of new liquefied naturalgas (LNG) terminals in northern Germany. Fiare I . Nord Stream Gas Pineline System s pipeines in operation O .ngoing projects Source: Gazprom, edited by CRS. Opponents of the pipeline-including, among others, some EU officials, the European Parliament, Poland, the Baltic states, Ukraine, the Trump and Biden Administrations, and many Members of Congress-argue that it will give Rus sia greater political and economic leverage over Germany and others that are dependenton Russian gas, leave some countries more vulnerable to supply cutoffs or price manipulation by Russia, and increase Ukraine's vulnerability to Russian aggression. More recently, pipeline opponents, including within Germany, have argued the German government should blockthe pipeline in responseto malign Rus sian activity, including a nerve agent attack against and arrest of Russian opposition figure Alexei Navalny. German political leaders have uniformly condemned Russia's actions against Nav alny, but Chancellor Angela Merkel and others continue to argue that the infrastructure project can be decoupled fromongoing political disputes with Russia. Impact on Ukraine In recent years, Russia has sought toreduce the amount of natural gas it transits through Ukraine. Before Nord Stream 1 opened in 2011, about 80% ofRussia's natural gas exports to Europe transited Ukraine. In 2018, about 40% of these exports transited Ukraine. In December 2019, after the United States established new sanctions related to Nord Stream2, Gazprom and the Ukrainian state-owned energy company Naftogazrenewed rts.congress.gov

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