THAT PEE TAPE DIDN'T BUY MUCH:

The prospects of the Nord Stream 2 pipeline being able to flow gas into the EU as Gazprom intended now look extremely perilous. US sanctions legislation adopted in December 2019 stopped the construction of the pipeline by extending sanctions to pipelaying vessels. Nord Stream 2's expert contractor All Seas immediately stopped its vessels from laying pipes. Today approximately 160km of the route remains unlaid. Nord Stream 2 has sought to find alternative pipelaying vessels and hopes to begin pipelaying shortly with the much slower and less technically advanced Akademik Cherskiy pipelaying vessel. However, on the 20th October the State Department issued a clarification on the scope of the existing sanctions creating further difficulties for suppliers to the project. And at the beginning of November the House and Senate came to an agreement on a further round of sanctions which hit the pipeline's insurers and undermine the capacity of the pipeline to obtain technical certification. These additional sanctions will be enacted by the end of the year as part of the annual National Defence Authorisation Act.

Overlooked as a result of the controversy over US sanctions, the European Union itself has also taken measures which will undermine the operation of Nord Stream 2. In May 2019 the EU enacted an extension to the Gas Directive 2009 which formally extended the pipeline to import pipelines such as Nord Stream 2. The full application of the Gas Directive creates a number of problems for the pipeline, notably  Article 11.  It provides that with any non-EU owner the Member State regulatory agency must assess whether such an owner will pose a risk to the supply security of the Member State or the European Union. Given the extensive catalogue of Gazprom's threats and actual cut off of supplies over the last two decades surviving any such regulatory assessment would be problematic. And any attempt by a Member State agency which sought to grant clearance to Nord Stream 2  by arguing that there was no risk to supply security would face a barrage of litigation in national and EU courts.

Nord Stream 2 is therefore faced with a formidable barrier of existing and incoming US sanctions and a thicket of almost impenetrable EU law requirements which make it extremely unlikely that the pipeline will survive-at least in the form of and for the purpose that Gazprom intended.

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