Saturday

22nd Sep 2018

Opinion

Deliberate misconceptions about Nord Stream 2?

  • Pipeline segment being tested for Nord Stream (Photo: Nord Stream AG)

In his most recent article on Nord Stream 2, Alan Riley continues to make misleading claims about the legal framework for gas import pipelines.

His statements squarely contradict European Commission vice-president Maros Sefcovic, energy commissioner Miguel Arias Canete, the legal services of both the EU Commission and the Council, national regulators of EU countries, and long-standing regulatory practice.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

In contrast to all of these authorities, Riley claims that the 2009 EU Gas Directive (part of the so-called 'Third Energy Package') is applicable to offshore pipelines that import gas from a third country outside the EU's internal market.

Here he contradicts both Sefcovic and Canete, who explicitly confirmed by letter of 12 September 2017 to the European Parliament that "by not providing specific rules on pipelines from third countries such as Nord Stream 2, the legislator did not intend the rules to apply".

This is because "none of the above-mentioned rules (…) expressly provide for their application to an offshore import pipeline connecting a member state with a third country".

There are currently five pipelines of this kind in Europe (Green Stream, Maghreb Pipeline, Medgaz, Transmed, Nord Stream) and two more are currently planned (Galsi, Nord Stream 2).

The Commission's position could not be any clearer: the Gas Directive does not apply in these cases. To this end, already more than a year ago, the EU Commission's legal service drew the same conclusion in its note to the Commission's energy department: "the legislator has not foreseen the application of the [Gas] Directive to a pipeline crossing an external border".

And by letter of 3 March 2017, the German regulator Bundesnetzagentur confirmed to the EU Commission that "offshore interconnections from third countries to the European Union are not subject to the provisions of the third internal energy market package". The regulator also warned that it could amount to a "discriminatory practice if other requirements were to apply to Nord Stream 2" compared to comparable import pipelines from third countries, like Green Stream and Medgaz.

2009 Gas Directive

Finally, even the legal service of the Council confirmed in its opinion of 27 September 2017 that the Gas Directive "does not apply to the Nord Stream 2 pipeline". So despite the overwhelming evidence and clarity of these conclusions, Riley claims to know that all these authorities are wrong. Perhaps his role as adviser to Naftogaz can explain his persistence against overwhelming evidence.

The Commission launched an initiative to negotiate a "specific regulatory regime" with Russia for Nord Stream 2 precisely because the Gas Directive does not apply. In its request to the Council for a negotiation mandate the Commission states: "Neither the EU nor its member states could claim to have jurisdiction on the part of an offshore pipeline outside their territory" for applying the 2009 Gas Directive.

It is obvious that if EU energy law is directly applicable to pipelines like Nord Stream 2, the Commission would not feel the need to propose negotiations to apply the "fundamental principles of EU law on energy".

Whatever one thinks of such negotiations, it is worth noting that Riley seems to oppose them because he demands that the Gas Directive should be applied directly. Or maybe he just picks any opinion that seems to complicate the implementation of Nord Stream 2, whether or not this is consistent with his earlier statements?

Furthermore, Riley inexplicably equates the Yamal onshore pipeline in Poland to Nord Stream 2. The differences are obvious, but maybe Riley simply forgot that the Yamal-Europe pipeline – unlike Nord Stream 2 – does not stop at the EU border but continues for some 680 kilometres, feeding both the Polish market and transporting gas onwards within the EU.

That is why the Gas Directive covers the part of the Yamal pipeline within the EU internal market, and only that part. In this respect, the Commission's opinion about the certification of the Polish section of the pipeline is also very clear.

Belarus is not in the EU

In fact, this comparison proves the very opposite of what Riley is claiming: of course a pipeline in an EU member state is subject to EU energy laws. This applies also to the connecting pipelines of Nord Stream 2 onshore in Germany. But the part of Yamal outside the EU's internal market, in Belarus, is not subject to the EU's internal market laws because it lies outside the internal market. This principle applies to any import pipeline outside the EU's internal market, such as Nord Stream 2.

There is a further problem: Riley's claim that the EU Commission "instituted infringement proceedings against Bulgaria for failing to apply the 2009 directive to the South Stream pipeline" is simply untrue. He again confuses the onshore and offshore sections of the pipeline systems. The procedure was related only to the onshore section inside the EU.

Furthermore, Riley wrongly claims that the infringement procedure related to non-compliance with the Gas Directive. In reality, the proceedings were not at all about energy law, as clearly stated in the formal letter to Bulgaria dated 3 June 2014 by Internal Market Commissioner Barnier.

Barnier's opinion

Barnier even stated that his letter is "without prejudice to the assessment concerning compliance with (…) the Third Energy Package", so this question was explicitly excluded from the infringement procedure. Hence, the response of the Bulgarian government only referred to the onshore pipeline "on Bulgarian territory" and made no reference to the offshore pipeline or EU energy law.

No offshore pipeline from a third country outside the EU's internal market bringing gas to the external border of the EU has ever been made subject to the rules of the Third Energy Package. EU regulation must not be applied in a discriminatory manner, purely based on political interests rather than the rule of law. Equal application of legislation is not only a key pillar of the rule of law, but also a prerequisite for much-needed commercial investment in the energy sector.

Sebastian Sass, LLM EU Law, is advisor and EU representative of Nord Stream 2.

Nord Stream II aims to undermine Energy Union

The Gazprom pipeline simply does not have any commercial bearing. Rather, it undermines the functioning and effectiveness of the European Energy Union and circumvents Ukraine for gas transits - paving the way for further Russian strong-arming in the region.

Will the centre-right stand up for EU values?

Time for Christian Democrats in the EP to show where they stand on Hungary and on the EU's founding principles, say Human Rights Watch and Amnesty International in a joint text.

Europe needs more modern leadership

If Europe wants to be a global leader, our political leadership has to change dramatically. Power needs a new face in Europe, and it needs to get legitimacy from the people, argues liberal MEP Sophie in 't Veld.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  2. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  3. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  4. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  5. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  6. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  7. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  8. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  9. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  10. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  11. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  12. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow

Latest News

  1. Brexit and MEPs expenses in the spotlight This WEEK
  2. Wake-up call on European Day Against Islamophobia
  3. Sound of discord at 'Sound of Music' Salzburg summit
  4. Salzburg summit presses for bigger Frontex mandate
  5. UK's post-Brexit plan 'will not work', EU says
  6. Airbnb agrees to clarify pricing for EU
  7. Libya keeps coast guards rejected by the EU
  8. EU divisions on menu at Salzburg dinner

Stakeholders' Highlights

  1. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  2. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  3. Mission of China to the EUChina: Work Together for a Better Globalisation
  4. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  5. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  6. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  7. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  8. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  9. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs
  10. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  11. FIFAGreen Stadiums at the 2018 Fifa World Cup
  12. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development

Stakeholders' Highlights

  1. Counter BalanceEuropean Ombudsman Requests More Lending Transparency from European Investment Bank
  2. FIFARecycling at the FIFA World Cup in Russia
  3. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  4. Centre Maurits Coppieters“Peace and Reconciliation Is a Process That Takes Decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  5. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  6. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  7. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  8. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  9. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments
  10. International Partnership for Human RightsAnnual Report celebrates organization’s tenth anniversary
  11. Nordic Council of MinistersNordic Cooperation Needed on Green Exports and Funding
  12. Mission of China to the EUPremier Li Confirms China Will Continue to Open Up

Join EUobserver

Support quality EU news

Join us