In spring 2021, President Joe Biden struck a deal with German Chancellor Angela Merkel to remove U.S. sanctions on a Russian company building a natural gas pipeline from Russia to Germany. While analysts suggested the move was made to protect U.S. relations with Germany, the decision was opposed by both Republicans and Democrats as well as several European countries.
The Nord Stream 2 pipeline, constructed by the Russian state-controlled gas company Gazprom, is projected to double natural gas exports into Europe once German regulators certify the recently completed project. The pipeline runs under the Baltic Sea and bypasses Poland and Ukraine, which have both voiced concerns that the project could be used as a geopolitical weapon.
In a visit to Washington in August, Yuriy Vitrenko, the head of the Ukrainian state energy company Naftogaz, called on Biden to lift the waiver on sanctions against Gazprom. “Even though it may be, I don’t know, 99% complete, we still believe it can and should be stopped,” Vitrenko said just before construction on the pipeline had been completed. “We continue underlining that it’s not about money for us, first and foremost, it’s about the national security of Ukraine.”
Ukrainian President Volodymyr Zelenskyy echoed Vitrenko’s reservations, stating that the Nord Stream 2 project would result in billions of dollars in lost gas transit fees for Ukraine. The country has been hurt by longstanding tensions with Russia, including the 2014 annexation of the Crimean region of Ukraine. Russia also stationed more than 100,000 troops near its border with Ukraine in early 2021 in an act of intimidation, according to some U.S. officials. Now that it can potentially bypass Ukraine for its gas exports, some warn that Russia could further escalate its aggressive tactics.
“We view this project exclusively through the prism of security and consider it a dangerous geopolitical weapon of the Kremlin,” Zelenskyy said of the pipeline during a joint press conference with Merkel in August. Zelenskyy added that the pipeline will not only be damaging for Ukraine, but “for all of Europe” because it will “play into the hands of the Russian Federation.”
U.S. lawmakers on both sides of the aisle also opposed the pipeline due its potential effects on international relations. “Nord Stream 2 will strengthen Russia, undermine America’s national interest, and threaten the security of Ukraine — a key U.S. ally,” Sen. Rob Portman (R-Ohio) said in a tweet after the Merkel-Biden agreement was announced in July.
In late July, a U.S. House of Representatives panel passed an amendment seeking to repeal the U.S. State Department’s ability to waive sanctions on the project. “These sanctions are mandatory, not discretionary,” said Rep. Marcy Kaptur (D-Ohio), a sponsor of the amendment, which was passed unanimously.
In September, Congress also added an amendment to the National Defense Authorization Act that would allow sanctions on the pipeline project. “Kudos to Congress,” said John Herbst, former U.S. ambassador to Ukraine, in a tweet after the vote. He added that it was a “necessary step to prevent another Biden cave and stop Nord Stream 2.” Both pieces of legislation would have to be signed by President Biden to become law, however, making their fate uncertain.
Both Germany and Austria support the pipeline project, arguing that it will help stabilize and enhance the energy security for the European Union (EU). Germany promised to counter any Russian attempts to use the pipeline as a political weapon with additional sanctions. The Merkel administration also agreed to support Ukraine by funding alternative energy and development projects to the tune of about $250 million. Opponents argued, however, that it could be difficult for future German governments to make good on those promises, especially given the fact that more EU sanctions on Russia would require the support of all EU member states.
Analysts suggested that the Biden-Merkel July deal was in line with the U.S. president’s broader strategy to help Germany deal with climate change and relations with Iran and China. German Foreign Minister Heiko Maas told reporters of the July deal: “It’s an expression of the fact that Germany is an important partner for the U.S., one that it can count on in the future.”
Despite vocal opposition from many in Washington and Europe, the Nord Stream 2 pipeline was completed in mid-September, but it will not be operational until German regulators can certify it. That is expected to take at least four months, giving opponents some time to try and stall its operations.
For background, see the January 2015 issue of Congressional Digest on “Keystone XL Debate.”
