Carbon Critical

February 09, 2021

The Pipe Dream of a Green Nord Stream 2

One of the reasons advanced for building the controversial Nord Stream 2 pipeline is that it’s needed for a cleaner hydrogen future. But such arguments don’t add up.

Projections of declinigng future EU natural gas imports to 2050

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Nord Stream 2, Europe’s most infamous pipeline, is back in the headlines. No natural gas pipeline is more geopolitically intriguing: the latest developments include new calls to cancel the project after the poisoning and subsequent imprisonment of Russian dissident Alexei Navalny, rumblings of a deal between Germany and the United States to lift US sanctions, and a curious statement from German President Frank-Walter Steinmeier that what the German government has always characterized as a purely economic project is actually a "last [political] bridge" to Russia.

But from an energy perspective, Nord Stream 2 would be just one more piece of a massive European pipeline network: Germany alone has about 40,000 kilometers of transmission lines. There will be less and less natural gas flowing through this gas infrastructure as Europe decarbonizes: most studies foresee a slight decline in natural gas consumption until 2030 and then a steep drop over the following two decades. Even those who see natural gas as the right fuel for a “transitional period” (new CDU leader Armin Laschet in IPQ), must expect quite a few pipelines to lie empty in the decades ahead.

The only way to prevent that, it seems, would be to send climate-friendly gas through the pipes.

A New Element in the Mix

While some European countries already feed low-carbon biogas, produced from organic waste, into their gas grids, this accounts for only 4 percent of EU gas consumption and is hard to scale. Governments and gas companies are turning to a different molecule to save the pipelines: hydrogen.

Hydrogen is a clean-burning fuel that emits only water vapor. It’s generally possible to blend it in with natural gas at concentrations of up to 20 percent without causing problems in household stoves or furnaces; energy companies in the United Kingdom and Italy are experimenting with blending today. Industrial users who need pure hydrogen, for instance to produce ammonia for fertilizers or power fuel cells in vehicles, could make use of hydrogen/natural gas mixes, too, though they would have to separate the gases in an energy-intensive process. The EU hydrogen strategy says blending may “enable decentralized renewable hydrogen production in local networks in a transitional phase.”

Blending won’t necessarily do much to reduce emissions. Of the 70 million tons of hydrogen the world consumes today, the vast majority comes from fossil fuels and releases emissions; the task now is to scale up the production of sustainable hydrogen, either by capturing the emissions (known as blue or turquoise hydrogen) or by using renewable electricity to split water molecules (green hydrogen). According to Felix Heilmann of the UK-based climate change think tank E3G, the German government wants to save its limited supplies of sustainable hydrogen for priority sectors like steel and chemicals, not burn it alongside natural gas for heat. Ultimately, any pipeline carrying 80 percent natural gas is still a short-term solution at best.

Improvements in the Pipeline

Unfortunately, switching completely to hydrogen is not an option with the current pipes. Gas pipelines need to be modified before they can carry hydrogen at higher concentrations: hydrogen can degrade steel pipes and because hydrogen has a lower density than natural gas, new compressors and turbines are needed to move it along the pipe. Gas companies are making the case that it’s worth modifying Europe’s pipelines. A group of 11 European gas companies has released plans to build a “hydrogen backbone” consisting mostly of repurposed natural gas infrastructure. They estimate the backbone would cost between €27 and €64 billion by 2040, a fraction of the hundreds of billions in investment in hydrogen production foreseen in the EU’s hydrogen strategy.

Of course, such proposals are motivated in part by a desire to avoid expensive fossil fuel infrastructure becoming stranded assets. But the gas companies are right that it would be sensible to repurpose some of Europe’s vast gas pipeline system to carry low-carbon fuels, if only for those priority sectors where low-carbon electricity cannot do the job. Northwestern Europe in particular is going to need to import hydrogen from somewhere but shipping it via boat (as liquid hydrogen, or as hydrogen derivatives known as “e-fuels,” or as organic compounds) carries its own high costs. So-called hydrogen clusters, which group together renewable power, electrolyzers, and industrial users, are also only part of the solution and do not obviate the need for some hydrogen pipelines.

So if some of the present gas infrastructure may still be useful in the decarbonized future, does that mean new natural gas pipelines like Nord Stream 2 are justified by the future demand for hydrogen market? No.

Building new pipelines can hinder decarbonization by locking in gas demand, i.e. making gas cheaper in the future compared to other options that eliminate the need for gas altogether, like replacing gas furnaces with electric heat pumps. Matthias Deutsch of the Berlin-based think tank Agora Energiewende argues for “a kind of precautionary approach” because the EU runs the risk of oversizing its gas infrastructure if it builds it out for cases where hydrogen demand is uncertain. The risks presented by new gas pipelines—which usually last around 40 years—are why the European Investment Bank decided to stop financing new pipelines from the end of this year, and why the European Commission proposed in December 2020 to exclude new oil and natural gas infrastructure from EU funding.

Hydrogen from Russia?

This hasn’t stopped fossil fuel players like Nord Stream 2 stakeholder Gazprom from making the green case for the controversial pipeline. They are going beyond the dubious arguments about natural gas being a “bridge fuel” to say that the pipeline could support the hydrogen economy later on. In December, a Gazprom executive proposed building a plant to produce hydrogen from natural gas on the German end of Nord Stream 2. The company had previously suggested that Nord Stream 2 could be modified to carry hydrogen at concentrations of up to 70 percent. For the CEO of Uniper, one of Gazprom’s German partners, this is a good talking point for responding to tough questions about the pipeline. (In response to a query for more details, Uniper could say only that Nord Stream 2 “can carry a certain amount of hydrogen” and directed further questions to Gazprom, whose representatives had not responded by the time of publication.)

Even if the Nord Stream 2 pipeline were repurposed to convey hydrogen, there would still be questions about the sustainability of the Russian hydrogen itself, notes hydrogen expert Gniewomir Fils. Russia’s record on renewable energy is dismal, so there won’t be much green hydrogen to send for the foreseeable future. Producing blue hydrogen from Russia’s huge natural gas reserves and storing the carbon dioxide would be more feasible; Russian Energy Minister Alexander Novak is bullish about his country’s prospects here. Yet Russia, which is notoriously poor at controlling methane leaks related to gas production, would still be warming the planet by extracting the natural gas in the first place. Most promising is the possibility of using nuclear power to produce (pink) hydrogen, though in the EU it’s not clear that this could compete with green hydrogen made in Spain and Portugal or just across the Mediterranean in Morocco.

So while it’s nice to see Russian power players talking about low-carbon fuels—the country also released a hydrogen roadmap in 2020—it’s hard to fight the feeling that these statements are greenwashing meant to win hearts and minds in Europe as Nord Stream 2 hangs in the balance. The new Russian hydrogen roadmap, says Maria Pastukhova of  Freie Universität Berlin, makes clear that exporting fossil fuels should remain the priority; the plan is merely to set up a few hydrogen pilot projects by 2024 and there remains “no viable regulatory framework” for hydrogen exports.

It is easier to imagine Russian energy companies increasing natural gas exports to gas-hungry China than making costly efforts to be part of the EU’s Green Deal. Furthermore, as Thijs van de Graaf of Ghent University points out, Russian exports of blue hydrogen would likely go not to the EU but to the major Asian markets, which are more favorable to the idea of using blue hydrogen in the medium term. Does anyone really expect Russia to soon be sending so much hydrogen to the EU that existing pipelines cannot handle the load once repurposed?

The growing hydrogen economy will save some of the EU’s gas infrastructure from rusting underground as Europe decarbonizes. But it won’t save all of it, and it’s no justification to build Nord Stream 2.

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