The U.S.-Germany deal, which includes an agreement to invest in green energy in Ukraine, charts a path forward for the project while addressing concerns over the geopolitical impact of potential dependence on Russian gas.
Frequently Asked Questions
- What is Nord Stream 2, and why does it matter?
- Why has it led to controversy?
- What role does the U.S. play?
- How far along is it?
What is Nord Stream 2, and why does it matter?
The project, nearly complete, is a natural gas line from Russian fields to the German coast, spanning 764 miles under the Baltic Sea. The $11 billion line will double the capacity of the original 2011 Nord Stream, which runs parallel to the new project. The line will supply gas to Germany — a nation heavily dependent on gas and oil imports — at a relatively low cost as the continent’s production capacity decreases.
The new pipeline is entirely owned by Russian energy company Gazprom, which is majority government-owned. The company also owns 51 percent of the original Nord Stream pipeline. A group of European energy companies, including Shell and Wintershall, are paying half the $11 billion in construction costs.
Why has it led to controversy?
Though proponents of the pipeline, including Germany and Russia, see it as a great business deal providing cheaper, cleaner energy, Nord Stream 2 has drawn ire from many opponents.
U.S. leaders and lawmakers — both Democratic and Republican — fear that the Baltic pipeline would give Russia too much power over European gas supplies, handing Russian President Vladimir Putin a wider market and geopolitical power at a politically precarious time.
During his term, President Donald Trump unsuccessfully tried to torpedo the project, claiming that Nord Stream 2 would make Germany “a captive to Russia.”
President Biden has also shared these fears that Europe would become overly dependent on Russian energy supplies.
Ukraine and Poland vehemently oppose the pipeline. Ukraine has long been an energy middleman nation, with Russian companies feeding much of Europe’s gas supply through Ukrainian soil and paying it transit fees in the process. Some believe that Russia, in bypassing Ukraine with the new pipeline, is aiming to weaken and isolate the nation.
What role does the U.S. play?
Biden discussed the pipeline with German Chancellor Angela Merkel — a vigorous pipeline supporter — during her visit to Washington last week. State Department spokesman Ned Price said at a news briefing Tuesday that Biden “couldn’t have been any clearer” with Merkel on his continuous opposition to the pipeline.
“We view it as a Kremlin geopolitical project that is intended to expand Russia’s influence over Europe’s energy resources and to circumvent Ukraine,” Price said. “We have made no bones about the fact that it is a bad deal for Germany, it is a bad deal for Ukraine and for Europe more broadly.”
The United States previously imposed sanctions on entities and vessels connected with the pipeline, including on the Fortuna pipe-laying vessel, which was set to build one line of the link, in January. The 19 sanctions imposed by Biden compare with sanctions on only two targets during the Trump administration, Price added.
But in a move that angered nations and lawmakers opposing the pipeline, the Biden administration waived those sanctions in May. Price reiterated Tuesday that it is nonsensical to impose sanctions on allies for a nearly completed project. In addition, the sanction waivers align with Biden’s commitment to rebuild relations with European allies, the spokesman said.
The waivers “created space for diplomacy” for the United States to address potential energy security risks with Germany, Ukraine and other European partners, he said.
Biden’s deal with Germany allowing the project to proceed drew criticism from U.S. lawmakers who are hawkish on Russia.
How far along is it?
Despite all the tumult and fears, construction of the gas pipeline is almost complete. Upon assuming office, Biden’s administration inherited a pipeline that was more than 90 percent complete — a point repeatedly stressed by his administration when defending the decision to allow the project to move forward. Nord Stream 2 is now 98 percent finished.
Estimates for when the pipeline would become operational have repeatedly been postponed. U.S. sanctions forced contractors to halt pipe-laying vessels with only 99 miles left to go in 2019, and construction resumed in December.
This report has been updated.