Amid allegations that Washington is using the cover of sanctions to advance its own commercial interests, Germany has been furiously lobbying against a Russian sanctions bill that passed the U.S. Senate and goes to vote in the U.S. House of Representatives Tuesday.
In a recent joint statement, Germany’s Foreign Minister Sigmar Gabriel and Austria’s Chancellor Christian Kern blasted the Senate version of the bill as aimed at “selling American liquid natural gas and ending the supply of Russian natural gas to the European market.” This position confuses U.S. national and commercial interests, and fails to recognize how European gas markets work.
The focus of German concern is the prospect of sanctions targeting the construction of new Russian export pipelines, and in particular the Nord Stream 2, which would give Russia’s Gazprom the capacity to bring 55 billion cubic meters of gas from Russia to Germany through two 1,200 kilometer pipelines beneath the Baltic Sea.
Together with the existing Nord Stream 1, total export capacity traveling the Nord Stream Baltic Sea route would be doubled as a result.
But Nord Stream 2 isn’t meant to increase Russia’s export capacity. Gazprom has substantial existing capacity via the Yamal pipeline going through Belarus and Poland and the Brotherhood pipeline through Slovakia and Ukraine. Nord Stream 2, just like Nord Stream 1, is intended to be a diversionary pipeline.
If U.S. sanctions are addressed specifically to Nord Stream 2, they won’t have any material impact on the flow of Russian natural gas to Europe. And while it’s true the sanctions against Russian export pipelines as drawn in the U.S. bill have been drawn broadly, they have also been drafted in the form of a grant of discretionary powers to the U.S. president. In reality, any executive order giving effect to the sanction powers would have to be narrowly drawn to focus on Nord Stream 2.
In its lobbying on Capitol Hill, Berlin has significantly played down the damage that Nord Stream 2 would inflict on the security of Central and Eastern Europe. This is because having most of Russia’s gas exports to the EU come through its market would lower natural-gas prices in Germany and make it an energy hub for the rest of Europe. It would also help the German and Austrian corporate partners of Nord Stream 2, including OMV, Uniper and BASF -Wintershall, ensure their continued access to upstream Russian energy assets. All of which sets the stage for greater Russian-German cooperation in the future.
Concentrating supply along the two Nord Stream routes reduces supply diversity and makes it easier to cut off those states that no longer provide transit services along the Yamal and Brotherhood routes. It also increases Gazprom’s market dominance, and further reduces supply alternatives, for Central and Eastern Europe. This significant loss of supply security will further weaken and isolate the states in these regions, all NATO members and partners of the U.S.
The development of Nord Stream 2 also raises two important security concerns for the U.S. that Messrs. Gabriel and Kern overlook.
First, the U.S. has a clear foreign-policy interest here: the survival of Ukraine as an independent, sovereign state. Nord Stream 2, a wholly owned subsidiary of state-owned Gazprom, would remove Kiev as a transit route. This would strip Ukraine of $2 billion in transit fees, reduce its importance to the rest of Europe and restore Russian gas leverage across the Continent.
Second, with the completion of Nord Stream 2, the two Nord Stream pipelines would together supply 25% of total European Union gas consumption and make up 70% of the EU’s gas imports. Russia is in effect proposing, with Germany’s support, to place 70% of the EU’s non-European gas imports in a 2-kilometer channel in one of the world’s shallowest seas. This would create a choke point in the Baltic Sea analogous to the Middle East’s Strait of Hormuz.
Aside from the prospect of a shipping or munitions accident—the pipelines run through two World War II munitions dumps—there is a clear security threat in putting so much energy resource in one vulnerable spot. It would be an open invitation to terrorists to undertake a spectacular act of energy sabotage.
Assuming that Messrs. Gabriel and Kern don’t intend to call on the Russian navy and marines to protect the pipelines, a substantial part of that responsibility would therefore likely fall upon the U.S. Navy and Marines Corp. In such circumstances, it isn’t unreasonable for U.S. Congress, which would have to foot the bill, to have a view on whether they should proceed.
Mr. Riley is a senior fellow at the Institute for Statecraft. He has also advised energy companies in Poland and Ukraine.