The United States urged Germany to drop its political support for Russian monopoly Gazprom’s Nord Stream-2 project and warned companies that are involved in the construction of the gas pipeline that they face the risk of sanctions unless they withdraw from the controversial project.
US Assistant Secretary for Energy Resources Frank Fannon told a conference call with reporters on December 11 that Nord Stream-2 and an expanded Turkish Stream Pipeline, both of which bypass Ukraine, are designed to deepen Europe’s dependency on Russian gas and weaken the bloc’s security architecture.
“Germany can certainly remove their political support from the project…of the gas directive. That policy has been languishing for over a year and a half. That would be a positive step in advancing energy security,” Fannon said, fresh from a trip to the Czech Republic, Croatia, and Hungary.
Referring to the construction of the gas pipeline, which has an annual capacity of 55 billion cubic meters and connects Russia’s mainland pipelines to Germany through an underwater link in the Baltic Sea, Fannon said the US government has the ability to sanction Russia’s energy export pipelines under Section 232 of the Counter-Americas Adversaries Through Sanctions Act.
“Firms that are working with the Russian energy export pipeline sector are engaging in a line of business that carries a sanctions risk. We continue to review potential sanctions actions and encourage governments or companies to contact us if they have questions about this process,” Fannon said while shying away from discussing details about future any possible sanctions.
In an effort to lessen gas dependence on Russia, Fannon told reporters that the US would continue to support European energy diversification, including alternative sources of energy such as liquefied natural gas (LNG).
The controversy surrounding the Nord Stream-2 project stems from the fact that most of Europe’s gas from Russia passes through Ukraine, which emerged as a budding European and NATO ally following Moscow’s illegal annexation of Crimea and its subsequent war in eastern Ukraine, caused the European Union and the United States to impose stiff targeted sanctions against the Kremlin.
Russia’s pipelines through Ukraine are a major source of revenue for Kyiv and a key contributor to the Ukrainian state budget. Many in the West are concerned that by allowing Moscow to bypass Ukraine by diverting European gas supplies directly to Germany, Kyiv will be effectively cut off from a vitally important money maker that would further cripple its economy.
The primary concern for most observers who oppose the continued development of Nord Stream-2 makes Europe more dependent on Russian gas and pipelines at a time when the bloc’s own home-produced gas resources are diminishing.
Responding to those concerns, Nord Stream’s EU representative, Sebastian Sass, told New Europe, “Politically motivated interventions against Nord Stream-2 would counteract the interests of European consumers and the EU’s energy security,” an assertion that is in line with certain EU-based proponents of the project that include German industrial giants such as BASF, as well as the consortium financing the project – Gazprom, Uniper and Wintershall of Germany, Austria’s OMV, Engie from France, and Royal Dutch Shell.
These companies have long asserted that Nord Stream-2 is being implemented in full compliance with both international law and EU legislation, while each considers it essential to secure Russian gas as a way to compete with rival US companies, particularly when, in their eyes, American LNG supplies are far more expensive and logistically challenging, especially taking into consideration the lucrative Asian LNG market, than betting on gas piped by corporations with ties to the Kremlin.