Nord Stream 2 Pipeline

Wendy Morton Excerpts

Wednesday 10th March 2021 Commons Chamber

[The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (Wendy Morton)]

I am grateful to my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski) for securing this debate, and for his ongoing work on European energy security, including as chair of the all-party parliamentary group for Poland. I am also grateful for the contributions to this debate that he and other hon. Members have made this evening. In the time I have, I will try to respond to all the points raised.

The resumption of construction of the Nord Stream 2 pipeline after a one-year hiatus has understandably rekindled interests in this project. As many hon. Members are aware, the UK Government have repeatedly aired our significant concerns about Nord Stream 2, its implications for European energy security, and its impact on Ukraine and other transit countries. When complete, Nord Stream 2 will double the Russian gas capacity flowing directly into Germany. Alongside the southern TurkStream route, this will largely replace the need for Russian gas to transit Ukraine.

The Government’s concerns about the pipeline are a matter of public record, and we continue to raise them publicly and in private with key allies. It is important to reiterate that Nord Stream 2 would not affect the UK’s gas supply. The UK gas market is one of the most liquid and developed in the world and our gas comes from diverse and reliable sources. Most of the gas that we use comes from our own production and reliable suppliers such as Norway. We receive a small amount of liquefied natural gas from Russia, but last year it accounted for less than 3% of our total gas supply.

Although Nord Stream 2 would not directly impact on our energy security, it could have serious implications for central and eastern European countries. Last year, around one third of European gas came via Russian gas pipelines. Some European countries are nearly wholly dependent on Russian gas. This reliance on a single source raises serious concerns about energy security. Furthermore, we do not believe that Nord Stream 2 is necessary to meet future European gas demand. There is sufficient existing pipeline infrastructure, including through Ukraine and Poland, for Russia to meet its European supply commitments.

There are also big questions about the need for Nord Stream 2 in a decarbonised future. Although the UK and European countries will continue to need natural gas for years to come, we are increasingly using energy from renewable sources, and we need to work to eliminate greenhouse gas emissions from the entire energy system in order to meet our net zero targets.

As I have said, the potential impact of Nord Stream 2 on Ukraine is particularly worrying. Ukraine hosts the largest existing pipeline network for Russian gas, and transit fees have historically made up a significant proportion of Ukraine’s GDP. Nord Stream 2 would divert supplies away from Ukraine, with significant consequences for its economy. It could also have significant security implications. The transit of Russian gas through Ukraine is regarded as a deterrent against further Russian aggression, so is a vital part of Ukraine’s national security.

[Chris Bryant]

Will the Minister give way?

[Wendy Morton]

I am going to continue as I am conscious that I do not have much time. If I have time at the end, I will come back to the hon. Gentleman.

It is positive that Naftogaz and Gazprom signed a gas-transit agreement at the end of 2019—it helped to avoid disruption at the time—and we welcome the role that Germany and the EU played in facilitating the negotiations. However, that agreement provides certainty only through to 2024; after that, there is greater uncertainty.

I reiterate the UK Government’s long-standing and unwavering commitment to Ukraine. We are one of Ukraine’s strongest supporters and are providing political and practical support to strengthen its sovereignty and resilience. On energy specifically, we are helping Ukraine to reform its energy market, working closely with the Ministry of Energy and the Ukrainian regulator.

I know that some ask whether the UK could be doing more to oppose Nord Stream 2, and my hon. Friend the Member for Shrewsbury and Atcham has put forward some interesting proposals. The UK welcomes the efforts of the three seas initiative to promote co-operation and development across central and eastern Europe, and we are open to the possibility of expanding the UK’s interaction with that group. I reassure Members that we will continue to share our concerns about Nord Stream 2 with key partners. It is our strong belief that we should be working to reduce reliance on any single gas supplier, and the dependency and leverage that can come with it. To counteract the risks associated with Nord Stream 2, it is essential that European countries diversify their energy supplies.

I was glad to visit Poland in October last year to discuss the need for energy transformation and a just transition, including with a business audience at the Wrocław energy congress. Since that time, Poland has proposed an ambitious energy plan and agreed on the EU’s target of at least a 55% reduction in emissions by 2030. We will continue to work with it to achieve ambitious climate and energy goals. However, with regard to Nord Stream 2, it is also important to recognise Germany’s sovereign right to formulate its own energy policy. Nord Stream 2 is highly contentious, but we would not want the debate over it to risk undermining the co-ordinated response by allies to wider Russian malign activity.

I fully recognise the legitimate concerns that hon. Members have raised today. Nord Stream 2 poses a threat to European energy security and the interests of existing transit countries. At a time when Europe should be diversifying and decarbonising its energy supplies, Nord Stream 2 risks entrenching European dependency on Russian gas for decades to come, increasing Russia’s ability to use energy as a political tool. For these reasons, the UK remains opposed to the pipeline and we will continue to raise our concerns with key partners. We will also continue to support initiatives that strengthen and diversify the European energy market.

Question put and agreed to.