The Nord Stream 2 pipeline is a wholly owned project of Russian energy giant Gazprom. The Trump administration has long criticized the German government for participating, and there’s a near-consensus in Congress that if completed, the project would result in Moscow gaining huge leverage over Europe that it could use to advance Russian interests at the expense of the West.
The pipeline also would allow Moscow to bypass Ukraine, which is dependent on the billions of dollars in revenue it earns by being the key pathway to Europe for Russian gas. For months, Congress has been working on a bill that would impose sanctions on the two European companies that are laying the deep-sea pipes, with the goal of getting them to stop and thereby thwarting the pipeline’s completion.
But Trump could implement those sanctions today. In fact, that’s what his National Security Council recommended after a Nov. 20 Principals Committee meeting in the White House. But one Cabinet member, Treasury Secretary Steven Mnuchin (represented at the meeting by his deputy, Justin Muzinich), dissented and has been urging the president not to move forward with the sanctions.
Four U.S. officials told me that Mnuchin has also been working with sympathetic senators to thwart congressional action that would compel the administration to implement the Nord Stream 2 sanctions. National security adviser Robert O’Brien called Mnuchin Nov. 21 to ask him to stop trying to delay the sanctions and go along with the rest of the administration.
Sen. Ted Cruz (R-Tex.), the main sponsor of a bill that would force sanctions on firms building Nord Stream 2, referred to Mnuchin’s behind-the-scenes work to thwart the sanctions in a Senate Foreign Relations Committee hearing Tuesday. Cruz pointed out that the administration already has the authority to sanction the companies laying the pipeline, under previously enacted Russian sanctions legislation called the Countering America’s Adversaries Through Sanctions Act (CAATSA).
“There have been, sadly, some bureaucratic intransigence, I think, particularly from the Treasury Department pushing back against exercising clear statutory authorization to stop this pipeline,” said Cruz. “I want this to be very clear: If the pipeline is completed, it will be the fault of the members of this administration who sat on their rear ends and didn’t exercise the clear power.”
Undersecretary of State for Political Affairs David Hale testified that if Russia is able to complete the pipeline, the results will be “very negative” for the United States.
“It would create another tool for the Kremlin to use Russia’s energy resources to divide Europe and to undermine and destabilize Ukraine,” he said.
Cruz estimated that the pipeline is about 60 days from completion and he called on the administration to act before then. “It is now or never,” he said.
Several congressional aides said Mnuchin is resisting the sanctions because some U.S. oil and gas companies, their Wall Street backers and the governments of Germany and Denmark all oppose the action. A Treasury Department spokesperson declined to answer questions about Mnuchin’s actions but said Mnuchin had raised concerns about the pipeline in meetings with several European leaders.
In Congress, the main objection has come from Sen. Rand Paul (R-Ky.), who accuses the Trump administration of abusing its sanctions power. Although the Senate Foreign Relations Committee approved the Nord Stream 2 sanctions bill by a 20-to-2 vote in July, it was never brought to the Senate floor. Chairman James E. Risch (R-Idaho) said on Nov. 22 the bill’s contents had been added to the fiscal 2020 National Defense Authorization Act, which is being negotiated by House and Senate leaders.
But on Monday, Risch told me the Nord Stream 2 issue is now getting caught up in the overall fight over the annual defense bill, which is largely seen as the only major legislation with a good chance of passing the Senate this year.
“It is dangerous that political considerations could jeopardize this opportunity to respond substantively to Russia’s threat and to protect our allies from another effort by Putin to divide the continent of Europe,” Risch said. “Allowing this pipeline to be completed would be a huge win for Putin, who wants our European allies to rely on him for energy production, and time is running out.”
Senate Minority leader Charles E. Schumer (D-N.Y.) told me in a statement that the Nord Stream 2 issue is just one of many they are focusing on inside the negotiations over the defense bill, which include: paid family leave for all federal workers, ending U.S. support for the conflict in Yemen, a package of sanctions on Russia to address election interference, the Space Force, and more.
Trump shouldn’t wait for Congress to figure it out. He has a perfect opportunity to prove he supports Ukraine and that he’s tough on Russia. Plus, if he doesn’t act, his long criticism of the project will look like empty bluster, further eroding U.S. credibility in Europe.
There’s a lot going on in the world, but rarely do you find an issue where both parties in Congress and the Trump administration (minus Mnuchin) are on the same page and can easily do something about it. Stopping the Nord Stream 2 pipeline is a no-brainer.