DISPUTES OVER THE PIPELINES IMPORTING RUSSIAN GAS TO THE EU: HOW TO ENSURE CONSISTENCY IN EU ENERGY LAW AND POLICY?

Abstract

Europe is divided on how to construct and exploit pipelines importing Russian gas to the EU. The division evinces two opposing models, which I label (1) the Overcapacity and Exemption-Based Model and (2) the Optimal Capacity and Regulatory-Based Model. As those labels suggest, these models are premised on different assumptions as to the number and capacity of such pipelines that the EU requires, and as to how far those pipelines should be subject to EU energy law. The struggle between these models is not merely a legal one. More fundamentally, it is an economic and geopolitical one involving a wide range of stakeholders: public and private. This article evaluates the two models. By describing the legal disputes concerning OPAL and Nord Stream 2 and analysing their wider legal, economic and geopolitical implications, it argues that the second model (Optimal Capacity and RegulatoryBased) is clearly superior in today’s context. It is fully aligned with the objectives and provisions of EU energy law. In particular, it is consistent with that law’s aim of diversifying the external suppliers, sources and routes of gas supplies available to the EU. This article concludes that this latter model must win in the OPAL and Nord Stream 2 disputes, and, moreover, that it must be implemented with respect to all eastern import pipelines and connected pipelines before any further pro-competitive or pro-integrative reforms to the EU’s energy law and policy.