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Gas is pouring out of the Nord Stream pipelines. Here’s what you need to know

<i>Lisi Niesner/Reuters</i><br/>The pipelines raised concerns in Europe long before Russia invaded Ukraine.
REUTERS
Lisi Niesner/Reuters
The pipelines raised concerns in Europe long before Russia invaded Ukraine.

By Rob Picheta, CNN

Western nations have said leaks in two Russian gas pipelines, Nord Stream 1 and 2, are likely the result of sabotage.

On Monday, leaks were discovered in the pipelines, prompting investigations by European authorities that determined powerful underwater explosions had occurred just before the pipelines burst in several places.

The pipelines were created to funnel gas from Russia into the European Union, and were controversial long before Russia waged war on Ukraine, largely because of fears around European reliance on Russian energy.

But the latest incidents are yet another twist in the energy standoff that erupted after Russia’s invasion, and which has only been deepening in the seven months since.

Here’s what you need to know.

What happened on the Nord Stream pipelines?

Swedish authorities first sounded the alarm on Tuesday about leaks in the Nord Stream 1 and Nord Stream 2 pipelines — both of which run under the Baltic Sea near Sweden and Denmark.

That came after seismologists detected underwater explosions near the pipelines on Monday; it’s unclear if those are connected to the leaks.

Neither pipeline was transporting gas to Europe when the attacks occurred; Russia shut off gas flows through the first pipeline weeks ago, and the second was scrapped by Germany after Russia’s invasion of Ukraine, just before it was due to become operational. But both still contained gas under pressure.

Swedish Prime Minister Magdalena Andersson said in a news conference Tuesday that the leaks were likely caused by “a deliberate action” but “not an attack against Sweden.” Other Western countries and NATO have echoed that conclusion.

German, Danish and Scandinavian security authorities are now examining the leaks and trying to identify their cause, according to the German Economy Minister Robert Habeck, who added that Europe is able to protect its own critical infrastructure.

Authorities are keeping ships away from the area, citing the risk of leaked gas igniting over the water and in the air — but say there are few other security risks, since the leak will only affect the environment where the gas plumes are located.

What is Nord Stream?

The two Nord Stream pipelines designed to transport Russian gas to the EU were years in the planning.

Nord Stream 1 was announced in 1997, during a period of relatively calm relations between the West and post-Soviet Russia, and became operational in 2011. For the past decade, it has been a key artery carrying Russia’s vast gas supplies to Europe, accounting for about 35% of Europe’s total Russian gas imports last year.

It flows directly to Germany, the bloc’s biggest economy, which is particularly reliant on Moscow’s gas to power its homes and industry.

Nord Stream 2, the multimillion dollar, 750-mile sister project, was announced a few years later and completed last September. It was intended to deliver 55 billion cubic meters of gas per year — more than 50% of Germany’s annual consumption — and could have been worth as much as $15 billion to Gazprom, the Russian state-owned company that controls the pipeline, based on its average export price in 2021.

But the project was shrouded in controversy from the beginning. The United States, the United Kingdom, Ukraine and several EU countries opposed it for years, warning it would increase Moscow’s influence in Europe.

And following Russia’s invasion of Ukraine this year, Germany pulled the plug on the pipeline as it was on the cusp of becoming operational.

Why were the pipelines so controversial?

European reliance on Russian energy has long been a concern for many in the West. The construction of Nord Stream 2 divided politicians and analysts for years, and became beset by delays, previous US sanctions and opposition over its impact on the climate crisis.

The pipelines have given Russia significant leverage over Europe for some time. But until this year, European countries have been reluctant to wean themselves off Russian energy given the potential for rising prices.

The EU pledged to cut its dependence on Russian gas after Moscow annexed part of Ukraine in 2014, but imports increased between 2016 and 2018 before falling slightly.

Russia’s invasion of the rest of Ukraine this year has completely changed the calculus — but Europe’s shift in approach has come too late to prevent what is expected to be a difficult winter this year, with soaring energy prices fueling inflation around the continent.

What impact has the war had?

The worst fears of the project’s critics materialized within a matter of days in February, when Russia invaded Ukraine. Since then, the Nord Stream pipelines have become a geopolitical football and Europe and Moscow have been locked in a standoff over the supply of gas to the continent.

From June, Gazprom slashed flows through Nord Stream 1 to just 20% of its capacity, initially citing maintenance issues and a dispute over a missing turbine caught up in Western export sanctions.

It also cut off supplies to several “unfriendly” European countries and energy companies over their refusal to pay for gas in rubles, as the Kremlin demanded, rather than the euros or dollars stated in contracts. European leaders have described the demands as blackmail.

Then, earlier this month, Russia said it would cut off supplies through the pipeline indefinitely, worsening a shortage that threatens to tip the continent into an energy crisis this winter. Gazprom claimed at the time it had found an oil leak in a turbine.

The idea that Russia might restart supplying Europe next year has for some time now seemed a longshot. Following the recent damage, it appears almost impossible.

What happens next?

The damage to the Nord Stream pipelines may spell an ignominious end for the 25-year project, at least for the near future.

But the wrangle over Russian energy is certain to continue.

Earlier this month the West’s biggest economies agreed to impose a price cap on Russian oil in a bid to limit Moscow’s ability to finance its war, while keeping a lid on global inflation. That could result in countries blocking insurance cover or financing for oil shipments.

Russia had already threatened to retaliate by banning oil exports to countries that implement a price cap.

And in the near-term, a cold winter could cause crisis in Europe, where energy prices have spiraled since Russia’s invasion. Goldman Sachs warned in September that a typical family in the EU could face energy bills of 500 euros ($480) each month by early next year without government intervention, up 200% from 2021.

For now, speculation is bound to continue about what caused the explosion, and any evidence pointing to a state actor would have major geopolitical consequences.

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