Nord Stream 2

The election of Joe Biden and Kamala Harris serves as a breath of fresh air for transatlanticists on both sides of the ocean. But of all the European countries heaving a sigh of relief, Germany’s exhalation may be the loudest. Berlin has been, after all, the proverbial punching bag for the Trump administration, buffeted by incessant diatribes about ostensibly unfair trade practices and inadequate defense spending.

In a recent press briefing, Chancellor Angela Merkel delivered a congratulatory message to Biden and Harris, as well as a four-minute salute to the German-American relationship. She called it a treasure worth preserving, asserted that the United States is Germany’s most important ally, and added that both countries would stand “side-by-side” to confront several challenges facing the world today.

Germany will have a close partner in the White House again, but one issue in particular stands in the way of realizing the chancellor’s optimistic vision for a strong partnership.

Pipeline Politics

Among the stumbling blocks hindering a German-American rapprochement is Nord Stream 2, a natural gas pipeline connecting Russia to Germany via the Baltic Sea. The pipeline, once completed, would double German imports of Russian natural gas to 110 billion cubic meters per year. As Russia is already the EU’s largest source of natural gas, accounting for 44.7 percent of 2019 consumption, the U.S. and several central and eastern European countries claim Nord Stream 2 would (1) undermine Europe’s energy security and (2) destabilize eastern Europe if the Kremlin cut off the flow of gas through trans-European pipelines.

Over the past three years, the administration in Washington has consistently voiced disapproval of the project, usually in vitriolic terms. In 2018, at a NATO summit, President Donald Trump called Germany a “captive of Russia” due to its ostensible energy dependence. The White House has also taken action to back up its words. It has used widespread sanctions to target pipeline construction, a move typical of the Trumpian era.

U.S. disapproval of the pipeline, however, is not limited to the current administration and will not soften with the president’s departure. In fact, opposition even extends beyond the Republican party. Despite extreme American political polarization, Nord Stream 2 is a rare issue that draws bipartisan and bicameral reproach. Congressionally mandated sanctions targeting pipe-laying ships assisting the project, which are included in the Protecting Europe’s Energy Security Act (PEESA) of the 2020 National Defense Authorization Act (NDAA), are evidence of this.

Despite extreme American political polarization, Nord Stream 2 is a rare issue that draws bipartisan and bicameral reproach.

To complicate matters further, opposition to the project predates Trump’s assuming office in January 2017. The Obama administration also opposed it, with then-Vice President Biden calling it a fundamentally “bad deal” for Europe. That is an appraisal unlikely to have changed.

Berlin Pushback

In contrast to Merkel’s uplifting remarks, messages from within her cabinet have erred on the side of caution, presumably with anticipated disputes like Nord Stream 2 in mind. Foreign Minister Heiko Maas, an ardent Europeanist, delivered a more reserved and pragmatic message of congratulations to the Biden-Harris duo, stating simply that Germany looks forward to working with the next U.S. administration on a “transatlantic restart.”

Even Merkel herself reaffirmed Germany’s support for the project after the poisoning of Russian politician Alexei Navalny, which reignited criticism and debate in the German political arena about the pipeline.

The U.S. asserts that its opposition to the project is rooted purely in concerns about European overdependence on Russian energy.

While updated State Department PEESA directives and expanded sanctions under the Countering America’s Adversaries Through Sanctions Act (CAATSA), which target companies and individuals financing and providing support to the project, have the express purpose of “[halting] construction of these pipelines”, Maas recently claimed that Nord Stream 2 will be completed. He stated, “We Europeans make our own decisions about our energy policy and energy supply. After all, we haven’t criticized the United States for having more than doubled its oil imports from Russia last year and for becoming the world’s second largest importer of Russian heavy fuel oil. The United States is entitled to pursue an independent energy policy. And so are we.”

The U.S. asserts that its opposition to the project is rooted purely in concerns about European overdependence on Russian energy. Washington points to cases in 2006 and 2009, when Russia effectively cut off the flow of gas into Europe via Ukraine. The Germans, however, have repeatedly questioned the sincerity of this stance, specifically citing burgeoning American exports of liquified natural gas (LNG) to Europe. The U.S. currently exports LNG to 11 European countries, and from 2016 to 2019, such exports increased by nearly 6,800 percent. Despite this ostensible stratagem, American disapproval of Russia-to-Germany pipeline ventures started well before the days of U.S. exports of LNG to Europe. It goes back to Nord Stream 1, which the George W. Bush administration opposed due to similar fears that the pipeline would be used as a geopolitical weapon.

Moving Forward

PEESA sanctions targeting pipe-laying vessels have delayed the completion of Nord Stream 2 by a year. Just 6 percent of the $11.2 billion pipeline remains incomplete. But that 6 percent may have to wait a while. New sanctions proposed under the updated Protecting Europe’s Energy Security Clarification Act of the 2021 NDAA will target insurers and certification companies that support the pipeline. This could deal a death blow to the project.

The 2021 NDAA will likely be finalized before President-elect Biden assumes power on January 20, limiting his administration’s room for maneuver with the congressionally mandated sanctions. Still, PEESA and CAATSA grant the president leeway in authorizing sanctions on individuals and companies supporting the Russian pipeline. While Biden’s stance on the project is likely unchanged, sanctions should avoid punishing allies at all costs.

Tensions over Nord Stream 2 will undoubtedly surface in the coming months. But mutual respect while acknowledging divergent interests between close partners will serve as a solid foundation upon which this residual point of contention can be mitigated. Such an approach will also contribute to realizing Merkel’s vision for a new and improved era of German-American relations.

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