The Geopolitical Impact of Nord Stream 2

Sziklai, B. R., Kóczy, L., & Csercsik, D. (2020). The impact of Nord Stream 2 on the European gas market bargaining positions. Energy Policy, 144, 111692. https://doi.org/10.1016/j.enpol.2020.111692

USAEE Working Paper No. 19-394

23 Pages Posted: 27 Mar 2019 Last revised: 3 Feb 2021

See all articles by Balázs R. Sziklai

Balázs R. 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, Balázs R. and Koczy, Laszlo A. and Csercsik, Dávid, The Geopolitical Impact of Nord Stream 2 (March 27, 2019). Sziklai, B. R., Kóczy, L., & Csercsik, D. (2020). The impact of Nord Stream 2 on the European gas market bargaining positions. Energy Policy, 144, 111692. https://doi.org/10.1016/j.enpol.2020.111692, USAEE Working Paper No. 19-394, Available at SSRN: https://ssrn.com/abstract=3360783 or http://dx.doi.org/10.2139/ssrn.3360783

Balázs R. 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

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