New pipeline permit suspended, gas price rises too fast | Economie

New pipeline permit suspended, gas price rises too fast |  Economie

Gas prices in Western Europe rose sharply today after a German regulator indefinitely suspended the operation of a new pipeline from Russia.

The new pipeline, Nordstream 2, has been ready since mid-September, but German authorities have not yet issued the necessary certificates and permits. The reason is that European legislation does not allow the pipeline operator to be the same as the gas supplier. This would give such a resource a lot of power. Changes to paperwork are due today Federal Network Agency It was dismissed as insufficient. This means that the operation of the 1,240-kilometer pipeline could take months, German media reported.

Nordstream 2 is owned by a Swiss company wholly owned by the Russian energy giant Gazprom, which in turn is controlled by the Kremlin. The Swiss want to create a German subsidiary, which will then become the owner of part of the pipeline that runs through Germany. The German regulator announced today that this process will first be fully completed. After that, the documents must be submitted again and they will be verified again.

Gas price hike

Prices on the European gas market immediately rose by about 10 percent after the decision. It remains unclear if, how and when Dutch consumers will notice any of this increase. But earlier increases this year have resulted in sharply higher rates for consumers with variable contracts. Consumers who have set the price of their energy for a longer period of time will not notice anything at the moment. Two smaller energy suppliers have since gone bankrupt: the difference between the fixed prices they have to supply their customers for and the sharp increase in the prices they bought from the market has become too large.

More delays in getting Nordstream 2 up and running could be a reason for Russian President Putin to shut off the gas tap to Europe once again. Putin wants to be a reliable supplier, but attaches great importance to this new project: the new pipeline no longer passes through Ukraine, which requires a lot of money for transportation, but around it. Relations between Ukraine and Russia have been tense since the former Soviet republic took a more pro-Western course, and Russia stole Crimea in 2014.

Nordstream 2 has been controversial since the start of construction, now five years ago. The US and UK warn that Europe is becoming too dependent on the Kremlin. Poland and the Baltic states also warn of this. Chancellor Angela Merkel has always spoken out in favor of the project, but she is on her way to a way out. The Green Party, which will most likely form the new alliance with the SPD and the Liberals, opposes it.

Watch all our videos about the economy here:

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top