1. This ICIS article on Nord Stream 2 (NS2) very seriously flawed on the law:- icis.com/explore/resour…
2. To start with some of the initial points raised in the article. (a) The German regulator is not obliged to consult any other Member State-this flies in the face of the ruling of the EU General Court in Case T-883/16 Poland v. Commission, known as the OPAL case.
3. In OPAL the General Court made it clear that by virtue of the principle of solidarity enshrined in Article 194(1) TFEU, there was an obligation to consider the interests of all Member States and the Union as a whole.
4. (b) that the German regulator can grant NS2 a derogation. It cannot. Derogations are only for pipelines completed before 23rd May 2019.
5. On 23rd May 2019 NS2 was only about 40% completed and had not yet received all its route licensing permits. It was and never could be considered to be a completed pipeline for the purposes of the EU gas directive.
6. The alternative line of argument that NS2 advocates rely upon, and ICIS repeats without challenge is that NS2 had already made a FID before the directive came into force and therefore it should be treated as a completed pipeline.
7. That argument should have elicited a vigorous response from ICIS on two grounds (i) FIDs are almost never made when all the route permits are not yet in place & (ii) was the premature FID decision made in an attempt to circumvent the oncoming law?
8. Sadly no such responses from ICIS are found in the article.
9. And then (c) that it would be possible for the German regulator to grant a partial derogation. No such creature exists within the four corners of the Directive.
10. Arguments such as (d) that Polish-Danish Baltic Pipeline are being built so therefore NS2 should obtain a derogation rather miss the point. The Baltic pipeline will be fully compliant with and fully subject to Union law.
11. NS2 by contrast is seeking to escape the full application of Union law, by seeking a derogation to which as an incomplete pipeline it is not entitled.
12. There also seems to be some confusion in the article between derogation and exemption. Derogation is the theoretically softer regime which applies to existing and completed pipelines prior to 23rd May 2019.
13. Incomplete and new pipelines are subject to the full exemption procedure which requires direct European Commission sanction and even the derogation provision requires Commission consultation.
14. The article appears to ignore the fact that the German regulator is applying Union law not German regulations. Hence it can be subject to direct legal process for failure to comply with Union law if it misapplies the law in respect of a derogation for NS2.
15. In other words PGNIG can sue in the German courts relying on Union law. It can also seek a reference to the Court of Justice of the European Union (CJEU) under Article 267 TFEU if necessary.
16. In addition, the European Commission and Poland, can institute proceedings directly before the CJEU against Germany itself. Suspensory measures can also be sought.
17. I can understand that ICIS seeks views from commentators on the regulatory regime for NS2. However, given prior discussion on this issue it should not have been that difficult to identify the real legal framework within which this debate should take place.
