The Geopolitical Impact of Nord Stream 2

23 Pages Posted: 27 Mar 2019

See all articles by Balazs Sziklai

Balazs Sziklai

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS); Corvinus University of Budapest

Laszlo A. Koczy

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS); Quantitative Social and Management Sciences Research Group, Budapest University of Technology and Economics

Dávid Csercsik

Peter Pazmany Catholic University

Date Written: March 27, 2019

Abstract

We investigate the geopolitical impact and the possible consequences of the construction of the Nord Stream 2 pipeline. We model the European gas network as a cooperative game between regions as players over the pipeline network, where LNG is also treated as a separate player. We focus on the change of influence of the players in three different scenarios. We investigate how the power of the agents shift when the Nord Stream pipeline is expanded, when the Ukrainian pipeline is shut down and finally when both of these happen. Our calculations show that when Nord Stream 2 is operational, Russia and Western Europe improve their position compared to the base scenario, while other suppliers, notably Norway, together with Central- Eastern- and Southern Europe suffer losses, especially when the Ukrainian route is dismissed. The results highlight that both the supporters and adversaries of Nord Stream 2 are governed by self-interest and solidarity and trust, the values proclaimed by the EU and the Energy Union, remain but a slogan.

Keywords: as supply, Pipeline network, Shapley value, Cooperative games, Nord Stream

Suggested Citation

Sziklai, Balazs and Koczy, Laszlo A. and Csercsik, Dávid, The Geopolitical Impact of Nord Stream 2 (March 27, 2019). USAEE Working Paper No. 19-394. Available at SSRN: https://ssrn.com/abstract=3360783 or http://dx.doi.org/10.2139/ssrn.3360783

Balazs Sziklai

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS) ( email )

Papnovelde u. 22
Budapest, H-1112
Hungary

HOME PAGE: http://econ.core.hu/english/inst/sziklai.html

Corvinus University of Budapest

Hungary

HOME PAGE: http://web.uni-corvinus.hu/~bszikla/

Laszlo A. Koczy (Contact Author)

Hungarian Academy of Sciences (HAS) - Research Centre for Economic and Regional Studies (HAS) ( email )

Budaörsi 45
Budapest, H-1112
Hungary

HOME PAGE: http://www.mtakti.hu/en/kutatok/laszlo-a-koczy/276/

Quantitative Social and Management Sciences Research Group, Budapest University of Technology and Economics ( email )

Magyar Tudósok krt. 2.
Budapest, 1117
Hungary

HOME PAGE: http://qsms.mokk.bme.hu/index.php/koczy/

Dávid Csercsik

Peter Pazmany Catholic University ( email )

Szentkirályi utca 28
Budapest
Hungary

Register to save articles to
your library

Register

Paper statistics

Downloads
70
Abstract Views
326
rank
334,453
PlumX Metrics