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1 1 (June 25, 2021)

handle is hein.crs/goveduw0001 and id is 1 raw text is: Cogrsioa M1eac Servc 0 Updated June 25, 2021 Russia's Nord Stream 2 Pipeline: Continued Uncertainty Uncertainty continues to cloud the future of Nord Stream 2, a natural gas pipeline under construction that would increase the amount of Russian natural gas export capacity directly to Germany and on to other European countries, bypassing Ukraine, Poland, 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 of increased Russian aggression in Ukraine. Nord Stream 2 construction was initially suspended in December 2019, 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. Construction resumed in December 2020. In response, the United States has imposed sanctions on several entities and vessels, including five Russian ships identified as engaging in pipe-laying activities. Construction is ongoing, however. Reports indicate that one of two lines of the Nord Stream 2 pipeline system is complete, and construction of the second line may be finished within months. Additional steps, including certification by German authorities, would be required before the pipeline begins to transport gas. The German government is a key European proponent of the pipeline. German and EU officials, including some opponents of the pipeline, have condemned possible U.S. sanctions on European entities involved in the pipeline project as an infringement on national sovereignty that could have negative repercussions for broader transatlantic cooperation. German supporters of the pipeline, including Chancellor Angela Merkel, welcomed the Biden Administration's May 2021 announcement that it would refrain from enacting sanctions on Nord Stream 2 corporate officers, despite imposing sanctions on additional Russian vessels involved in the project. Although the Biden Administration says it remains strongly opposed to the pipeline, some analysts speculate U.S. officials may be seeking to avoid a broader deterioration in U.S.-German relations due to the pipeline dispute. Background Nord Stream 2 is being constructed alongside the Nord Stream 1 pipeline, in operation since 2011. If completed, Nord Stream 2 would double the total capacity of the Nord Stream system, from 55 billion cubic meters (BCM) to 110 BCM per year. Nord Stream 2 is owned by the Russian 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). https://crsrep Support and Opposition Although the EU has articulated an ambitious energy diversification strategy, some European governments have not reduced dependence on Russian gas, which accounted for about 45% of EU natural gas imports in 2019. Russian gas exports to the EU were up 18% year-on-year in the first quarter of 2021. Factors behind reliance on Russian supply include diminishing European gas supplies, commitments to reduce coal use, investments by Russia in European infrastructure, Russian export prices, and the perception of many Europeans that Russia remains a reliable supplier. Figure I. Nord Stream Gas Pipeline System Source: Gazprom, edited by CRS. Supporters of Nord Stream 2, including the German and Austrian governments, argue the pipeline will enhance EU energy security by increasing the capacity of a direct and secure supply route. German officials say they support the development of infrastructure to ensure that gas can be transported across Europe once it reaches Germany. They stress that Germany supports broader European energy supply diversification efforts, including construction of new liquefied natural gas (LNG) terminals in northern Germany. Opponents of the pipeline-including, among others, some EU officials, the European Parliament, Poland, the Baltic states, Ukraine, the Biden Administration, and many Members of Congress-argue that it will give Russia greater political and economic leverage over Germany and others that are dependent on Russian gas, leave some countries more vulnerable to supply cutoffs or price manipulation by Russia, and increase Ukraine's vulnerability to Russian aggression. Pipeline opponents, including within Germany, also have argued the German government should block the pipeline in response to malign Russian activity and human rights abuses. Chancellor Angela Merkel and others continue to argue that the infrastructure project can be decoupled from ongoing disputes with Russia. )rts.congress.gov

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