Even though the European Commission deems Nord Stream 2 unnecessary, arguing that gas imports to the EU will remain stable in the coming decades due to decreased domestic production, Thierry Bros, senior research fellow at Oxford Institute, believes that without Russian gas Europe will face energy issues.
“Maybe the EC is not completely realistic, maybe gas production will decline and our imports will grow. I still believe that the EU declaration regarding consumption is a bit too harsh,” Dr. Thierry Bros has told Sputnik.
Speaking about the repercussions the scrapping of the Nord Stream 2 project could have on the European economy, he said it would hardly affect the average prices for natural gas whether it comes via Nord Stream 2 or via Ukraine.
“In terms of demand and supply, I don’t think this [could lead] to any major change,” he noted.
When asked which side would suffer the most if Nord Stream 2 does not happen, Dr. Bros said that even though Russian gas is the least costly to produce and ship to Europe, pricing in Europe is done on a market basis.
“The price in Europe is way above the cost of producing and shipping, that’s why Gazprom is so highly profitable. [However], Russian gas accounts for 34 percent of [European consumption] and if you are saying what we in Europe would do without Russian gas, I believe that if you take out Russia gas prices will skyrocket and we will have blackouts,” he continued.
He added that some European nations, above all Poland, are opposed to the Nord Stream 2 project, arguing that Gazprom now has 34 percent of the European market and if the Nord Stream 2 project is implemented, Russia’s market share will increase and it will be able to push prices up.
“This is the risk I believe some countries fear, and this is coming from countries, which are more on the east side of Europe.”
When queried why the European Commission is easing its requirements to Ukraine, Dr. Bros said that the EC wants the Ukrainian transit to be kept because the transit of Russian gas is benefiting the Ukrainian economy.
“I think the Nord Stream is really part of how the EU wants to look at the energy issue. It wanted to have these regulations implemented in different countries. It succeeded when dealing with gas pipes coming to Europe from Norway, it failed with Nabucco [pipeline] and it is now trying to implement full regulation all over the place. I think this is just a minor part of the relations the EU has with Russia though,” Thierry Bros concluded.
READ MORE: Nord Stream 2 Foreign Partners Want to Stay in Project — Russian Deputy PM
Earlier, vice president of the European Commission in charge of Energy Union, Marosh Sefcovic, stated that the EC hoped to obtain a mandate for negotiating with Russia on the Nord Stream 2 project.