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The geopolitical impact of Nord Stream 2

Author

Listed:
  • Balazs Sziklai

    (Game Theory Research Group Centre for Economic and Regional Studies, Hungarian Academy of Sciences and Corvinus University of Budapest Department of Operations Research and Actuarial Sciences)

  • Laszlo A. Koczy

    (Game Theory Research Group Centre for Economic and Regional Studies, Hungarian Academy of Sciences and Keleti Faculty of Business and Management, Óbuda University, Budapest)

  • David Csercsik

    (Pázmány Péter Catholic University, Budapest)

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.

Suggested Citation

  • Balazs Sziklai & Laszlo A. Koczy & David Csercsik, 2018. "The geopolitical impact of Nord Stream 2," CERS-IE WORKING PAPERS 1821, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:1821
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    Cited by:

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    2. Anna A. Bakulina & Olga V. Panina & Stanislav E. Prokofiev & Natalia L. Krasyukova & Valery L. Abramov & Natalia V. Sergeeva & Olga V. Loseva & Tatiana G. Kasyanenko & Elena V. Takmakova, 2021. "The Black Sea Region Energy Cooperation: Current Trends and Prospects," International Journal of Energy Economics and Policy, Econjournals, vol. 11(4), pages 257-266.
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    5. Dubský, Zbyněk & Tichý, Lukáš & Pavliňák, Daniel, 2021. "A quantifiable approach to the selection of criteria and indexation for comparison of the gas pipeline projects leading to the EU: Diversification rationality against securitisation?," Energy, Elsevier, vol. 225(C).
    6. V. A. Volkonsky & A. I. Kuzovkin, 2021. "Benefits and Losses for European Countries from the Northern Stream-2 Gas Pipeline: Overview of Estimates by Scientists and Energy Industries," Studies on Russian Economic Development, Springer, vol. 32(6), pages 689-694, November.
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    More about this item

    Keywords

    gas supply; pipeline network; Shapley value; cooperative games; Nord Stream;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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