The federal government has found itself defending what Ukrainian President Volodymyr Zelenskyy called an absolutely unacceptable decision in recent weeks — to grant a Canadian company an exemption on Russian sanctions.
Siemens will be allowed to import and export six turbines that are part of the Nord Stream 1 pipeline in Europe.
Here are five things to know about the turbines:
What is Nord Stream 1?
The Nord Stream 1 natural gas pipeline runs under the Baltic Sea from Russia to Germany. It provides about 35 per cent of the natural gas used to generate electricity and power industry in Germany. Some of that fuel is sent on to other European countries.
Russia supplied about 40 per cent of all natural gas used in the European Union before it invaded Ukraine, and since then it has been reducing the flow of energy into the EU.
Why is Nord Stream 1 subject to Canadian sanctions?
Its majority owner is Russian state-owned gas giant Gazprom. Wide-ranging economic sanctions imposed by Canada and other Western countries are intended to isolate the Russian regime and pressure it to end the invasion of Ukraine. Top officials from Gazprom and other energy companies were sanctioned in March.
How did Canada get involved?
Six turbines for the pipeline need maintenance at a Siemens Energy facility in Montreal. One of the turbines, which powers a compressor station, was imported and repaired already.
Gazprom said because of technical problems with the turbine and delays in getting it back due to the sanctions, it had to reduce the flow of natural gas into Germany by 60 per cent last month.
German politicians have dismissed the decision as a political gambit by the Kremlin to sow uncertainty and further push up energy prices, insisting that the turbine in question wasn't earmarked for use until September anyway.
The federal government recently revealed it has provided a revocable, two-year exemption to allow Siemens to send the turbine back to Germany, and to repair the other five turbines over that time-frame.
That angered Ukrainian President Volodymyr Zelenskyy, who called the exception absolutely unacceptable, and warned it could undermine global sanctions against Russia. The Ukrainian World Congress has petitioned the Federal Court for a judicial review in hopes of stopping the turbines from making it to Germany.
What's the situation in Germany?
The flow of gas stopped entirely on July 11 for scheduled maintenance that's expected to be done as early as July 21. This kind of work is sometimes done in summer, when gas usage drops.
Germany typically stockpiles natural gas during the summer months, and its laws require 90 per cent of that capacity to be filled by Nov. 1. As of Tuesday the total storage level is just over 65 per cent, which the German government says is not unusual for July.
But there are worries that Russia will blame more technical issues for keeping the taps turned off. World leaders, including Prime Minister Justin Trudeau, say Vladimir Putin is weaponizing energy in Europe.
What happens if the pipeline doesn't restart?
The German government has issued an alert warning about gas supply, the second in a three-level system. If things escalate to an emergency level the country's regulator will take over allocating and distributing gas resources.
But it stresses that the supply of gas right now is less of a concern than the cost, which is already spiking across the EU. Some worry that will cause a recession just as economies start to recover from the COVID-19 pandemic.
Many countries seek alternatives, looking to import more liquefied natural gas from the United States. But that is a longer-term solution that requires terminals to convert the liquefied product back into gas — a capacity Germany doesn't currently have.
In the meantime, Germany is asking people to reduce their power usage. It's also given permission for 10 coal-fired power plants to restart and has paused plans to take another 11 coal plants off-line this fall.
This report by The Canadian Press was first published July 20, 2022.
— With files from The Associated Press
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