The Trump administration and the U.S. Congress threatened sanctions on European companies helping to build the Nord Stream 2 gas pipeline, and that is still the current position of the new U.S. government. To end the deadlock, president Biden needs to change the tone of the debate and focus on the true interests of the affected parties, explains Nikos Tsafos at the Center for Strategic and International Studies (CSIS). He summarises those interests: the U.S.’s (energy security for Europe, containing Russia), Germany’s (not ostracising Russia, a direct gas supply, business), Poland’s (Nord Stream allows Russia to isolate and cut gas to Poland), and Ukraine’s (Russia’s current dependence on its pipeline route helps restrain its neighbour, and keeps Ukraine’s pipeline business viable). If the concerns of Poland and Ukraine can be dealt with through alternative gas strategies for both, then there’s no obstacle to U.S. and German interests being met, says Tsafos. He suggests how that could happen, but the point is for Biden to focus down on those vital interests and not get distracted.
The Nord Stream 2 pipeline presents an early foreign policy test for the Biden administration. The new administration is, on the one hand, eager to reset a frosty relationship with Europe and to find common ground on climate and other issues.
Tensions over Nord Stream 2 undermine that goal, and if history is any guide, they can poison otherwise productive meetings on energy and climate. On the other hand, opposition to the pipeline in the United States is bipartisan, deep, and congressionally mandated; the incoming administration has only limited options. There is also significant opposition in places like Poland and Ukraine, important U.S. partners in Europe. How can the new administration navigate around these constraints?
A change of tone
It might help, as a starting point, for both the United States and Germany to adopt a different tone. For the United States, telling Europeans how they should pursue their energy security tends to be counterproductive—no German needs a lecture on what “Russia is really about” or “what Europe really needs.” By the same token, the German retort, often repeated, that Nord Stream 2 is a “commercial project” and that the government has nothing to do with it is nonsense. Any compromise would benefit from a change in tone.
To find common ground, it is helpful to recast the terms of the debate. Rather than ask, “should the pipeline be built,” we should examine the interests of each side in this debate. Is there a way to address these core interests through a different path? And if so, what might that path look like?
The current U.S. view
The United States has a multidecade objective to boost energy security in Europe; it has a narrower goal to help its allies near Russia defend themselves against pressure from Moscow; and it seeks to deter Russian aggression, broadly understood. For Washington, sanctions on Nord Stream 2 tick all three boxes.
…and the German view
In contrast, Germany’s grand strategy is shaped by Ostpolitik, the notion that engaging Russia, rather than severing ties, might mollify Russia’s behaviour; that having ties to Moscow is better than having no ties, and that having no energy ties is not an option right now anyway; that businesses should build whatever project they want as long as they comply with the law; and that there are domestic constituencies in Germany that want this pipeline. German politicians might not love (or even like) Nord Stream 2, but they see its completion as better than the alternative.
Completing Nord Stream 2 while maintaining everyone’s interests
It is hard to see a compromise scenario in which Nord Stream 2 is not finished. There are voices in Germany opposed to the project on energy or geopolitical grounds—perhaps a day will come when the German position might shift. But not yet. It is similarly hard to see a compromise scenario that does not include measures to reassure Poland and Ukraine—the two countries most opposed to the project. If that starting point is correct, we can reframe the challenge thus: if we assume that Nord Stream 2 is completed, how could the energy security concerns of Poland and Ukraine be assuaged?
Poland’s concerns exist on two levels. There is an underlying skepticism toward Russian projects, especially when done in partnership with Germany. That is a deep, historical reflex no diplomacy or negotiation can overcome. But there are also tangible worries: that through Nord Stream 2, Poland might be forced to fend for itself should Russia cut gas to Poland but not Germany. Over time, this fear will lessen as Poland builds a pipeline to Norway and expands its ability to import liquefied natural gas. But we cannot wait the problem away; we need a way to address it now.
But Germany and Poland disagree on how to solve this problem. Germany believes that Poland wants to keep its market closed, which would inhibit the free flow of gas between the two countries. If gas could flow freely, the logic goes, Poland would have nothing to worry about since gas going to Germany could then flow to Poland, and it would be impossible for Russia to supply Germany and not Poland.
Poland’s retort is that the system in the East is “captured” (my words) by Russian-related interests—Poland has no faith in the free flow of gas under an emergency. This is a complex topic that requires a careful, technical discussion. It is precisely the kind of challenge that U.S. diplomacy should take on: mediating among allies, listening to their concerns, finding a compromise that both can live with.
The Ukrainian problem is similarly multilayered. There is a long-running impression that Ukraine’s pipeline network is key to the relationship with Russia. One day, the argument is that Russia wants to annex Ukraine in part because it wants to take over its pipelines. Another day, the argument might be that the only reason Russia is not more aggressive toward Ukraine is the latter’s pipeline network, and that once the pipeline network becomes obsolete, Russia will make its move. (What we know for sure is that Russia wants to develop alternatives to having to ship gas through Ukraine.)
The Ukrainian gas challenge is twofold. First, there is a question of accessing sufficient gas to meet its needs, a problem that has become increasing less urgent as Ukraine has deepened its linkages with its neighbours (often importing gas that is Russian in origin but not in ownership—gas exported from Russia but sold into Ukraine by someone else). There is more work to be done there, and U.S. pressure can help open some bottlenecks. But Ukraine has survived for several years without buying Russian gas directly—it can continue to do so.
The more existential problem is the long-term viability of Ukraine’s pipeline network. The less gas flows through it, the harder, and more costly, it is to sustain the system. Addressing this problem has taken the form of seeking a commitment from Russia to ship a certain volume of gas through Ukraine. But in the long term, it cannot be the business of U.S. diplomacy to dictate how much gas will flow to Europe and by what route. Nor should we confuse the broader goal—Ukrainian energy security and system reliability—with an artificial revenue target that might meet that objective. Focus on the core interest, not the headline number.
To do this, U.S. diplomacy should help advance the dialogue on how to ensure the longevity of the Ukrainian pipeline network: how to shrink it if need be, how to modernise it by attracting investment, how to safeguard its independence, how to boost its operational excellence, and how to leverage its most important asset—the country’s gas storage facilities.
All these conversations are ongoing to an extent. The objective is to recentre the conversation away from trying to secure a certain volume of gas flow, or a certain target revenue, to upholding the underlying interest—the sustainability of Ukraine’s gas network. That way, we can shift away from a zero-sum game, not a competition between Nord Stream 2 and Ukrainian transit, but an assessment of how Ukraine can sustain its gas business even if we assume that Nord Stream 2 is built.
Biden is not Trump
This shift in strategy requires, above all, a change in tone and emphasis. During the Trump administration, the instinct was to fan the flames of this intra-European conflict, an instinct made more acute by the dislike that former President Trump harboured toward German chancellor Angela Merkel. Rather than inciting conflict, U.S. diplomacy can play the role of mediator, coming to the table with an open mind to find solutions among allies. It is what the United States does best.
It would help, of course, to have a more coherent transatlantic strategy on Russia. It often feels—in Washington, in Berlin, in Brussels—that sanctions merely disguise the absence of a U.S. strategy toward Moscow. If Nord Stream 2 could be placed in a broader strategic context, the case for sanctions might become clearer. Until that time comes, the Biden administration has been tasked by Congress to impose sanctions, unless it issues a waiver, but only after consulting with allies. That consultation need not be superficial or make-believe; it can be meaningful. And if designed properly, a compromise could overcome this contested aspect of the energy relationship with Europe so that we can start repairing this most essential strategic partnership.
Nikos Tsafos is deputy director and senior fellow with the Energy Security and Climate Change Program at the Center for Strategic and International Studies in Washington, D.C.
This article first appeared on January 27th 2021 and is published with permission
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