Germany is reportedly trying to convince the United States to remove all its sanctions over Nord Stream 2, a Russian pipeline that would double the amount of gas transported from Russia to Europe.
The U.S. doesn’t like Nord Stream 2, because it will increase the European Union’s reliance on Moscow for its energy security. That’s why it has sanctioned all the firms involved in building the pipeline.
In an attempt to address this fear, German Chancellor Angela Merkel’s coalition is working on a package of measures to soften Russia’s influence over the EU energy market.
The trigger was the Biden administration’s Feb. 16 deadline to name a list of additional firms to be sanctioned by the U.S. According to the Wall Street Journal, the U.S. government has now opened talks with Berlin.
The package in progress includes a regulatory mechanism that would limit Russia’s ability to manipulate the energy market. By introducing this package, Merkel’s coalition may try to convince the U.S. to remove the sanctions, according to U.S. news website Bloomberg.
The Biden administration is “keen to lower the temperature of the debate over Nord Stream 2,” according to the Financial Times.
In particular, one of the ideas in the package is to introduce a procedure that would allow completely shutting off Nord Stream 2, for example, if Russia violated its $7 billion deal with Ukraine on the transition of Russian natural gas through Ukraine to Europe.
Another idea is to make the launch of the pipeline possible only after Russia releases top Russian opposition leader Alexei Navalny, who’s been recently sentenced to nearly three years in prison, or stop the war in eastern Ukraine.
“We should think about making the startup of Nord Stream 2 conditional on a change of behavior on the part of Russia,” Nils Schmid, the foreign policy spokesperson for Germany’s Social Democratic Party, told Financial Times.
Richard Morningstar, founding chairman of the Atlantic Council’s Global Energy Center and former U.S. ambassador to the EU, told Bloomberg that it is up to Germany to come up with a strong proposal.
Russia and Germany started building the Nord Stream 2 pipeline in 2015. Since then, the $11 billion project has been one of the most disputed topics in foreign policy between Germany and the U.S.
It is the second pipeline, after Nord Stream, that goes beneath the Baltic Sea and delivers gas from Russia to Germany.
Poland and Ukraine are also protesting against it. They claim the EU shouldn’t increase its dependence on Moscow at a time when President Vladimir Putin sponsors the war in Ukraine and persecutes his political opponents.
The German government holds the opinion that the pipeline is a private sector project, has nothing to do with foreign policy and won’t promote dependence on Russia.
The U.S. has been trying to prevent the construction by imposing sanctions on private firms involved in the building, certifying and maintaining of the pipeline. As a result, the pipeline which was scheduled to start operating in early 2020, is still under construction.
Construction of Nord Stream 2 resumed in Danish waters at the beginning of 2020, while Merkel and French President Emmanuel Macron said on Feb. 5 they were united in opposing U.S. sanctions on the project. Around 120 kilometers of the pipeline remains to be laid in Danish waters as well as 30 kilometers in German waters according to Russia’s state-owned giant Gazprom, which is behind the project.
Further concerns relate to the role of Ukraine, a transit country for Russian gas going to the EU. Ukraine makes money from gas transit fees. After the completion of Nord Stream 2, Ukraine will most likely be cut off from Russian gas and face economic losses.
In 2019, Ukraine and Russia signed a five-year agreement to ensure a minimum fixed amount of gas that will be transported through Ukraine after the construction of Nord Stream 2. From 2021 through 2024, the annual guaranteed amount is at least 40 billion cubic meters, down from 65 billion cubic meters in 2020. Russia exported more than 200 billion cubic meters last year.
