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Nord Stream 2: the controversy between US, Germany and Russia

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The project was severely criticised by US during the Trump’s era. On the contrary, the new democratic Administration did not extend sanctions against its related companies

The Russian pipe-laying vessel Akademik Cherskiy, which may be used to complete the construction of the Nord Stream 2 gas pipeline, lies in the port of Mukran, Germany, July 7, 2020. REUTERS/Axel Schmidt

The joint project of the Russian Gazprom and the European energy giants was severely criticised and put under pressure by the United States during the Trump administration, which called on the EU to abandon the pipeline and instead buy liquefied petroleum gas (LPG) from the US and other countries. On March 4th, some members of the US Senate criticized the White House for refusing to impose sanctions on companies involved in the construction of the Nord Stream 2 pipeline. 

Nord Stream 2: a battle that has lasted for years

From the very beginning of the project, the US and natural gas competitor the Ukraine have been in bitter conflict because both were eager to sell their liquefied natural gas in Europe. Obviously, with the advent of Biden, an even stronger position was expected towards the project, but the new Administration did not extend measures against Nord Stream 2 and its related companies. Instead, it has limited itself to blacklisting the ship Fortuna, which is tasked with laying the pipeline, and placing its owner, already sanctioned, on another blacklist.

During the Trump Administration, American economic retaliation had led to the withdrawal of 18 companies from the Nord Stream 2 project, as confirmed in a report by the U.S. department of State to Congress. Among the insurance companies that have departed are the Swiss Zurich Insurance Group and Axa Insurance, based in Paris. These companies have withdrawn to avoid the cleaver of the announced American retaliation on those who had contributed to the controversial pipeline that should double the flow of gas directly from Russia to Germany: 1230 kilometres of pipes of which 130 are still to be laid, of which 28 destined for Germany and about 100 for Danish waters.

Starting in early February, President Joe Biden has sought to have a more collaborative stance towards Nord Stream 2, with Washington and Berlin pledging to discuss the project together. Germany remains committed to its completion, with German Chancellor Angela Merkel resisting requests to annul it despite the international uproar that followed the poisoning of Russian opposition leader Alexei Navalny and his subsequent imprisonment in early February for having violated the parole conditions of a 2014 conviction while in Berlin for treatment for the poisoning. Meanwhile, the President of the Federal Republic of Germany has said that the construction of the pipeline would make it possible to mend a historic wound, namely that of the invasion of Nazi Germany by the USSR – a statement that has shaken, and not a little, the Ukraine, which is in danger of suffering great economic losses as a result.

Towards an uncertain future

Berlin has pursued a compromise with Washington, though not officially. The idea is to equip the infrastructure with a mechanism to interrupt gas supplies from Russia. This device could be operated, if necessary, by Germany itself, should Russia attempt to exert pressure on Ukraine, which is a transit country for gas to Europe. This option is not well viewed by Berlin, which fears that the Ukrainian Government will inflict repercussions on Russia and cut off the Russian gas flow. The German government is open to discussing this proposal with the United States, but “rejects the automatism” to which Washington points.

Other projects included in the American proposal for the Nord Stream 2 pipeline being studied in Berlin are still to be developed, although  two on the table; the first, with which the German Government has no problems, is the American demand for German economic aid to transform the Ukraine into a producer of green hydrogen. The second concerns the Americans’ desire to renegotiate the gas transit treaty from Ukraine, but Berlin has committed itself to neither.

GUALA