US Congress aims to block Russian Nord Stream 2 with sanctions

US Republican Senators John Barrasso and Cory Gardner have introduced a bill to enforce US economic sanctions on companies involved in the construction of the Nord Stream 2 pipeline project. While sanctions already exist relative to other Russian energy project, this bill aims to specifically target the Nord Stream 2 pipeline in a plan to kill it, dead in the Baltic.

Additionally, US Congressmen are upset that Trump held a fairly cordial meeting with the Russian president, instead of spending the entire meeting scolding and slamming him, probably for being Russian the way the rhetoric seems to be headed at this point.

Foreign Policy reports

Tougher U.S. sanctions on the $11 billion natural gas pipeline from Russia to Germany across the Baltic Sea, are about the only thing that could kill the project at this point. What’s less clear is whether U.S. natural gas will be able to make up the difference—and whether Europe wants or needs Washington’s help in managing its own energy security.

On Wednesday, Republican Sens. John Barrasso and Cory Gardner introduced a bill that would make mandatory U.S. economic sanctions on companies building the Nord Stream pipeline. Last year, Congress passed tough potential sanctions on Russian energy projects, but the new bill would make them explicitly applicable to Nord Stream and mandatory, rather than leaving them to the president’s discretion. The bill also seeks to streamline the export of more U.S. natural gas to allies such as Japan and members of NATO.

Separately, Democratic Sen. Bob Menendez said Thursday that he will introduce a new bill to put teeth into the existing but still unused sanctions on Russian energy.

Barrasso has been trying to boost U.S. energy exports to allies for years and has been a vocal critic of Nord Stream 2. But energy analysts viewed the introduction of the new bill as a timely response to Trump’s softer language on the Russian energy project in his meeting with Russian President Vladimir Putin in Helsinki on Monday.

The legislation advances Barrasso’s “long-standing goal of finding ways to increase European energy security,” said Laura Mengelkamp, a spokeswoman for Barrasso, who had previously introduced a similar bill. “American natural gas is a reliable and dependable source of energy.”

The United States has been railing for years against big Russian pipeline projects, including Nord Stream 2, that could redouble the European Union’s reliance on Moscow for energy, thus handing Russia potential leverage over the continent’s economic lifeblood. But by promoting U.S. energy exports as a replacement for Nord Stream 2, Washington is sending the wrong message on Russian energy coercion, said Brenda Shaffer, an energy expert at Georgetown University.

“Linking U.S. gas exports to anti-Nord Stream 2 legislation undermines the U.S. position against the pipeline,” she said, because it “reinforces Moscow’s claim that the U.S. is acting out of self-interest, despite that not being the case.”

Another problem is that several big Western European energy firms are helping Russia’s Gazprom to build the pipeline, and Germany—where the gas will arrive—has long supported it. That means that any U.S. action against Russia’s big energy project would actually take aim at nominal friends and allies in Europe; Trump will meet the president of the European Commission in Washington next week to talk about energy security and other issues.

“Sanctioning German and other European companies building Nord Stream at this point, when the U.S. is facing tensions with its European allies and with Germany itself, may inadvertently result in more division between the United States and Europe, rather than strengthening a joint posture against Moscow,” said Agnia Grigas, an energy expert at the Atlantic Council.

But from a U.S. point of view, there are few options left to halt the pipeline, which would double the amount of natural gas shipped directly from Russia to the heart of Europe, largely bypassing Ukraine—traditionally the middleman for Russian energy exports. That role as a transit state earns Kiev billions of dollars in annual revenue and some insurance against seeing itself suddenly deprived of energy supplies, as it has several times in the past. Nord Stream 2 has now secured virtually all of the permits it needs for construction. Workers began laying pipes off the German coast in the Baltic Sea this spring.

America’s impartiality and moral light on a hill position takes a major hit amongst its Western allies when it aims to hit at their energy projects and their companies that are heavily invested in them over not just the bad political blood, but also in a bid to sell their own LNG, which would be considerably more expensive than Russian gas received through the pipeline.

For this reason, and the fact that sanctions on the project would only serve to alienate America from its European allies even further, the Americans aren’t going to do any good with this, other than put some bad political blood in the mix.