Russia is racing to finish construction on the Nord Stream 2 pipeline, and the clock is ticking on efforts to delay or halt the project altogether.
American sanctions delayed construction for a year, but the Biden administration does not appear willing to go the mat to kill it, prioritizing other Trans-Atlantic objectives. That could clear the way for the project’s completion later this year.
Last-ditch sanctions
The Trump administration issued several rounds of sanctions on companies and shipping vessels involved in the Nord Stream 2 pipeline, a long-distance natural gas pipeline from Russia to Germany beneath the Baltic Sea. The project has been hotly contested for the better part of a decade, the source of a geopolitical battle between the U.S. and Russia, with various European governments falling into both camps. Some governments in Europe, particularly in eastern Europe, back the U.S. position to block the pipeline. Others, mostly in western Europe, say the project is a commercial endeavor, and resent American interference.
Russian progress on construction stalled at the eleventh hour.
The Trump-era sanctions delayed construction, as it blocked pipe laying vessels from installing pipeline. The project is 95 percent complete, but without the specialized ships due to sanctions, Russian progress on construction stalled at the eleventh hour, and only a few segments of the pipeline remain unfinished.
The Biden administration inherited the tangled geopolitical mess at a time when Russia made a gambit to accelerate final work. The U.S. appears to be hesitating, at least unofficially, and while the stated American policy remains one of opposition to the pipeline, it appears that the Biden administration does not want to spend political capital on a project that is nearly complete anyway.
The Biden administration has been attacked by Republicans in Congress, who are calling on the State Department to sanction specific ships associated with the pipeline. The Russian-flagged pipelaying ship named Fortuna is on track to complete one section in Danish waters by early May, according to ClearView Energy Partners. A second ship, the Akademik cherskiy could soon get to work as well, potentially accelerating progress towards completion by the end of the second quarter, the firm said.
Secretary of State Anthony Blinken maintains the official U.S. policy of opposing the project, but hasn’t committed to “accelerated sanctions” ahead of a deadline for a report on sanctions on May 16, ClearView Energy Partners wrote. “In our view, a slow deployment or light touch could signal a Biden Administration stand-down to secure backing from Berlin and Brussels against Moscow,” analysts at the firm wrote in a note.
“Between a rock and hard place”
At the same time, it is unlikely that the Biden administration would overtly stand down. Politico reported on March 12 that the Biden administration was readying a new round of sanctions, which could potentially arrive before the mid-May deadline. Instead, ClearView suggested, there might be some sanctions on some vessels, but maybe not enough to stall construction entirely.
The effort to kill Nord Stream 2 may not exactly be the top priority.
Several rounds of sanctions from the U.S. on companies involved in the project – several of which are based in Germany – contributed to a fraying U.S.-German relationship. The Biden administration is hoping to repair Trans-Atlantic ties, and has its sights on much broader objectives, and the effort to kill Nord Stream 2 may not exactly be the top priority. The Biden administration is under pressure from Republicans on Congress to take a hard line, but taking aggressive action that carries costs only to see the pipeline completed anyway is not the most attractive option either. “We’re between a rock and a hard place,” a senior administration official from the Biden administration told Politico.
According to Reuters, Germany is “betting” that it can run out the clock, allowing the pipeline to reach completion. Nord Stream 2 has been a thorn in the side of the U.S.-German relationship, but Reuters reports that Germany believes the U.S. government will pursue a more pragmatic approach once the Nord Stream 2 pipeline is completed, which could come later this year.
Germany does not seem eager to quickly schedule a meeting on the issue. “We are not presenting a list of offers – nor has the U.S. government demanded anything,” a senior German government official told Reuters.
The calculus is that Nord Stream 2 becomes a fait accompli once the project is completed, and the U.S. more or less drops the issue. “Berlin is trying to buy time and make sure that the construction is finished, because they think that once the pipeline is onstream, things will look differently (to the United States),” a senior EU diplomat told Reuters. This potentially may suit the Biden administration, which appears ready to issue new sanctions but not pursue a scorched earth strategy in an attempt to kill off the project at the last minute.
One alternative option considered by German officials to assuage American concerns, according to Reuters, is the possibility of having a shut-off mechanism once the pipeline is online should Russia cross some hypothetical red line. But the idea does not seem to have caught on as of yet.
ClearView Energy Partners said that next steps from the Biden administration will “serve as meaningful bellwether of its long-term intent.” While the outcome of the next phase remains unclear, the project – and the multi-year political battle – appears to be heading for a heated climax…or a quiet finish.
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