US sanctions aim at stifling Nord Stream 2 gas line

Sanctions that could halt the controversial Nord Stream 2 natural gas pipeline from Russia to Germany have been reportedly included in the annual US defense policy bill. The sanctions in the compromise National Defense Authorization Act between lawmakers in the House and Senate would penalise companies facilitating the construction of the pipeline, including ships helping operations to lay pipelines or moving rock formations on the sea bed, Reuters reported, adding that the sanctions also target companies providing insurance or secondary insurance for its construction and certification for the pipeline in Denmark.

Chris Weafer, the founding partner of Macro-Advisory in Moscow, reminded that the bill would become law only after being passed by both chambers in Congress and signed by US President Donald J. Trump. “It wasn’t so much that President Trump wanted to block Nord Stream 2. He simply wasn’t interested in preventing any of the sanctions or any of the actions aimed at blocking Nord Stream 2, Weafer told New Europe by phone on November 12. He noted that the primary movers or the people pushing the sanctions against Nord Stream 2 were in the Senate and particularly Ted Cruz, a Republican US Senator from Texas. “It has been very obvious that his ulterior motive of blocking Nord Stream 2 is the hope that he would create a market for US gas and, of course, from his home state which is a big producer of gas,” Weafer argued.

Opponents of Nord Stream 2 argue that the Gazprom-led project would increase Europe’s reliance on the Russian gas monopoly. “I think Senator Cruz and others that want to block Nord Stream have a very narrow window to try to block the project. Now Gazprom appears to have finished equipping the ship and it has permission from Denmark so it can complete the work, probably in a period of a couple of months. And they are starting that,” Weafer said, referring to Akademik Cherskiy, a Russian pipe-laying vessel, that Gazprom plans to use to finish the final 120-kilometre stretch of the project in Danish waters.

“The second reason is my sense that they try to take some action to block Nord Stream 2 before President-elect (Joe) Biden takes office because he has made clear that he wants to improve relations with Germany, he wants to improve relations with the European Union – that’s one of his key objectives – and therefore he is more likely not to support any actions to block Nord Stream 2,” Weafer said. “Therefore, Senator Cruz and the others who do want to block it have a closing window partly because Gazprom can actually complete the project in a couple of months but also very likely President Biden when he takes office will not want to block the project to improve relations with Germany,” the founding partner of Macro-Advisory argued.

Weafer reminded that attaching these additional amendments to US defence policy bill does not mean that it will go through because the amendments will have to go through the reconciliation process which means the leader of the Senate Mitch McConnell, assuming that he remains the leader, could accept the changes or block these amendments. “I see that as a last-ditch effort of those that want to block Nord Stream 2 to get some measures in place to prevent the completion. They only have a couple of months left in order to take any effective actions,” Weafer said. “But if it goes through and is signed into law, the amendments to the defence bill, it will block the project at least for some time,” Weafer said, adding, “But it would have to be approved by the reconciliation process so it would have to be approved by Senator McConnell in the Senate and he might not to that. So, it’s not a done deal yet”.

Navalny poisoning and Nord Stream 2

Nord Stream 2 was also put into question in response to the alleged poisoning of Russian opposition leader Alexei Navalny. Germany determined that Navalny was poisoned with Novichok, an illegal chemical under international law, yet not only allegedly produced by the Russian regime but now repeatedly used against its own citizens.

At a political level the relations between Berlin and Moscow have rarely been this bad, Weafer said. “It’s not just Navalny, which is the latest egregious action that Germany has accused Russia of,” he said. He reminded that last month the EU imposed sanctions against a number individuals and security agencies in Russia accusing them of launching cyberattacks against the Bundestag in 2015 that saw data stolen from Germany’s parliament. “And there is also the assassination of Chechen dissidents in Berlin as well. So, there is a number of factors over the last years that badly damaged the political relationship between Moscow and Berlin,” Weafer said.

But, at the same time, Berlin has said Nord Stream 2 is purely a commercial project. German Chancellor Angela Merkel and some of her other senior ministers have been very clear about the fact that they separate bad politics from good business, Weafer said. “In the sense that Nord Stream 2 they see as very good business. It ensures energy security for Germany, it helps Germany move towards its carbon reduction targets,” he said.

Energy demand in Germany is growing as it cuts dependence on nuclear and coal power. “Germany has always made it clear that it views Nord Stream 2 as an important part of its energy future, in particularly its energy security,” Weafer said, adding, “That’s why they wanted the pipeline coming directly from Russia and not transiting any other countries”.

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