Oral answer (Lords) on Nord Stream 2 Pipeline - Feb 28

To ask Her Majesty’s Government what representations they have made to the government of Germany about the Nord Stream 2 pipeline, following discussions at this year’s Munich Security Conference.

My Lords, we in the United Kingdom have significant concerns about the Nord Stream 2 pipeline, given its potential impact on European energy security and in particular on Ukraine. We regularly raise our concerns with key partners, including Germany. Both my right honourable friend the Prime Minister and the Minister for Europe have raised this with their German counterparts.

My Lords, I am delighted that the Government take this position. Last year, we saw solidarity between Europe, the United States and the West in general following the Novichok poisonings in Salisbury. Nobody needs to be in any doubt as to the threats that come from Russia. NATO was set up to face the threats coming from what was then the Soviet Union. Surely Her Majesty’s Government should use NATO as a lever to put pressure on Germany—which, after all, was defended by NATO against the Soviet Union—to ensure that action is taken over the Nord Stream 2 pipeline, which is described by many as an energy weapon giving leverage to Putin.

As my noble friend may well be aware, Germany is still pursuing and moving forward with Nord Stream 2. The operational challenge at the moment comes from Denmark, which has not yet given approval for the pipeline to be near where Nord Stream 1 is laid. That process continues, and in that regard we continue to work with Denmark as well. On my noble friend’s wider point about NATO, yes, of course it was set up for the purposes of the defence of Europe and the western alliance. I am delighted and proud of the commitment that the United Kingdom makes, as we continue to invest in it. We have asked other European partners, including Germany, to ensure they pay their dues to NATO.

My Lords, I welcome the response from the Minister but, as the Prime Minister has said on many occasions, we should engage but beware. If this has been raised with the German Government, what has the response been on how this matter is moved forward? We are maintaining sanctions and have condemned Russia for its actions in Crimea and Ukraine. Is it not about time that we heard from the Minister what response we are getting from our allies?

First and foremost, this is an issue of European security. In that regard, we have been working with the European Union. However, as I have already indicated from the Dispatch Box, Germany is certainly looking to proceed with Nord Stream 2 but there are caveats. Work has been done: for example, the noble Lord, Lord Collins, will be aware of the work done on the gas directive. The whole issue is one of monopoly. Gazprom currently controls a major source of European energy supplies. We believe that is incorrect and that belief is shared by our European partners. The work done on the gas directive will guarantee that once the new pipeline is operational, it can be managed more effectively by European regulation.

My Lords, noble Lords are surely right to be concerned about the Nord Stream 2 pipeline and the greater reliance on Russia and Gazprom. The Minister mentioned Denmark; the European Commission is seeking to mitigate the effect of it, including legislating so that pipelines cannot be directly owned by gas suppliers. If indeed the UK leaves the EU, how in future might the UK have any influence over such decisions, which affect the whole region?

The noble Baroness is quite right to raise the work that is being done. We have certainly played our part in strengthening the role of regulation and the gas directive, for the very reason that there should not be a monopolisation. We have seen previous instances where the supplier has used that monopoly on three separate occasions, particularly in Ukraine, as a means to stop supply or curtail it. On the broader issue of what happens once we leave the European Union, I assure her that we continue to have strong relationships with all our European Union partners, and that will continue after we leave the European Union.

I think my noble friend understands that the real purpose behind Nord Stream 2 is for Russia to make life more uncomfortable for Ukraine, as he said, and in particular for Poland, and to cope with Germany’s disastrous energy policy which is resulting in rising rather than falling carbon emissions and all the difficulties that follow from that. Poland is our friend. Are we being as helpful as we should be to Poland in its situation relating to energy and to its relations with Russia? We need its help and support, and it needs us.

I agree with my noble friend. I reassure him that we are working with Poland. He is right that it has reservations about this project, as does Denmark. We will continue to work with European partners in this respect. The work that has been done on the gas directive allows greater regulation of supply. As a broader issue, we are concerned. From a UK perspective, this does not impact our energy supply in the way it does Europe’s. Gas supplied from Russia is about 2% of the UK’s overall energy mix. However, the concern is wider for Europe, particularly for Ukraine, and we will continue to work with like-minded partners, including Denmark and Poland.

My Lords, in the past couple of years there was agreement within NATO and the EU that we would cut reliance on Russian gas. In the debates we have with Germany, how does it justify the fact that it will increase its reliance on Russian gas? As the noble Lord said, this is very much targeted at Ukraine. There are real issues here, and it is contrary to what has been agreed in NATO and the EU.

I agree with the noble Lord, as I agree with my noble friend. It is quite clear from the UK’s perspective. We are so against this project for the very reasons the noble Lord articulates.

My Lords, part of the problem is that former Chancellor Schröder is one of the chief lobbyists for this project. Does the Minister not see this in the context of the wishes of Putin’s Russia to undermine the economy of Ukraine, just as we now see in the Kerch Strait?

I agree with the noble Lord. There would be an impact if Nord Stream 2 goes ahead—current gas supplies run through Ukraine to Slovakia, and then pass back to Ukraine because of the nature of the relationship between Russia and Ukraine—as Ukraine’s economy would lose out because transit fees currently form about 3% of its GDP. I agree with the sentiments being expressed. The points that have been raised are points that we raise with the European Commission and our European partners.