Nord Stream 2: A Political Economic Crime Novel and Its EU Legal Consequences

Abstract

Hardly any other energy infrastructure project is as politically and legally controversial in the EU as Nord Stream 2, with the project company’s headquarters in Zug, to export gas from Russia through the Baltic Sea to Germany. This European infrastructure project is an excellent example of the intertwined economic, political and legal implications inherent in any such energy project in the EU single market. Just like an exemplary model case of a European law textbook, the following article aims to give an insight into the constantly developing new architecture of European energy law in the internal gas market, together with its European policy background, by means of concrete individual questions raised by this case. To this end, it proposes to take the concrete legal questions of this case and selectively illustrate the detailed and complex nesting of European law competences of the EU with the national competences of an EU Member State, here the Federal Republic of Germany, that regulates the EU internal gas market. This article focuses on the legal regime of exemptions from the legally required competitive conditions for the EU internal gas market, which is established by the relevant EU Gas Directive 2009/73EG in its Article 36 and Article 41a and its German implementation under Article 28a and 28b EnWG (Energiewirtschaftsgesetz, i.e. Energy Industry Act). This also includes a detailed presentation of the history of amendments to these standards. Finally, it should be made clear which legal, political and ultimately also economic risks await any investor in infrastructure projects with a construction period of several years on the EU internal market should they try to push through their large-scale project unchanged during the amendment of decisive relevant legal regulations by standard-setting EU authorities and against expanding political resistance in the EU and in EU Member States. These risks affect every investor who is involved in the EU internal market. Nord Stream 2, EU gas market, competition requirements, Russia, Gazprom, European energy security, Energy Charter Treaty, US sanctions, German Federal Network Agency, German Energy Industry Act (EnWG=Energiewirtschaftsgesetz)