Saving Europe

The Old World will be saved by the United States. Unfortunately, by passing the Protect European Energy Security Act, the U.S. Congress failed to save it the first time. However, the House of Representatives has approved new sanctions, which once enforced, will uncompromisingly destroy the Russian Trojan horse, the Nord Stream 2 gas pipeline. Unless of course, the European Union in its naivete, does not interfere with its saviors.

Few things in the world can compete with the grandiose comments about the Protect European Energy Security Act, by certain members of Congress during discussions of their own amendments to the law. Except however, the hypocrisy, which is inherent in the very name of this law.

For example, we learn from these members of Congress that Nord Stream 2 threatens “not only Ukraine, but the whole of Europe,” and that this pipeline is nothing more than a thinly disguised Trojan horse intended to separate Eastern Europe from the rest of the continent. By destroying it, the United States will not only save Ukraine and Poland, but also meet the energy needs of German partners in a responsible and environmentally friendly way. In addition, the legislators who proclaimed the slogan of global energy dominance, have also declared that Russia is using energy as another tool to attempt the domination of a free and prosperous Europe.

Now, in order to protect the EU’s energy security, Congress has decided to impose sanctions on dozens of European companies, which are naturally helping to implement Nord Stream 2.

Late last year, the United States passed a law as part of its defense budget which allowed sanctions to be imposed on companies owning pipe-laying vessels building offshore pipelines from Russia to Europe. This could also include companies that leased or sold such vessels. The likelihood of such sanctions forced contractor Allseas to refuse to participate in the project.

Suddenly, to the United States’ surprise, Gazprom found its own pipe-laying vessels, Fortuna and Akademik Cherskiy. In the beginning of the summer, both vessels received a permit to operate in Denmark’s exclusive economic zone, which opened up the possibility of completing the last 160 km (approximately 99 miles) of the pipe (in two-strand design). At the same time, American lawmakers were outdoing one another in submitting competing bills to expand sanctions.

In the second half of July, the House of Representatives supported the most lenient version of the amendments, which had a slightly smaller list of sanctioned activities. Overall they appear to be a forthcoming declaration of trade war with the European Union.

According to the drafters, the amendments to the Protect European Energy Security Act are drawn up in such a way as to exclude any possibility of completing the construction of Nord Stream 2. First, they broaden the concept of laying the pipeline. The amendments now not only include direct welding and pipe laying, but site preparation, digging trenches, topographic surveying, concreting pipes, etc. Secondly, the companies that “facilitated the sale” of the pipe-laying vessel may fall under these sanctions, as well as the institutions that assist such vessels with financial and insurance services, installation of welding equipment, and modernization. Dozens of European enterprises may be at risk.

It is appropriate here to ask, why European? Nord Stream 2 is not a project of just the Russian Federation, and while a number of American and European politicians obsessively insist otherwise, Russia continues moving the pipeline toward the shores of Germany. This is a joint Russian-European project, which is a part of a gigantic gas transportation system that begins on the Yamal Peninsula and ends in Central Europe. Most of the companies that may be subject to sanctions are located in Europe.

Essentially, U.S. lawmakers are determined to strike at their closest ally, the EU, with Germany first. Furthermore, in Germany, some political forces are already trying to create panic. Primarily, we are talking about the Green Party, which traditionally opposes projects related to fossil fuels. Now, its representatives say that because of Nord Stream 2, Germany will be isolated without Europe’s support, although Germany is not the only country involved in the new gas pipeline construction.

It is worth mentioning that the sanctions, written into the American bill to protect Europe from itself, are not so terrible. They mainly concern the right to enter the United States, but assume the possibility of introducing economic restrictions such as seizure of assets, a ban on work in the U.S., etc.

This raises questions. How seriously does the EU and its member countries take U.S. sanctions? How exactly will Germany, Austria, the Netherlands and other project participants respond to the United States in the event sanctions are imposed on their national companies? The question of retaliation no longer exists. However, how far is the United States willing to go against its closest allies?

Based on the timing of previously imposed sanctions, the amendments may take effect in December—although this election year may result in making its own adjustments and cause the dates to shift. Completion of Nord Stream 2 will take approximately two months, with additional time for commissioning. The main question now is how easy it will be to complete the construction of Nord Stream 2. Even under strong political pressure, no one will abandon it; the project is far too important for Europe. The new sanctions can shift the completion date only slightly—for example, to resolve insurance issues—but they cannot cancel the project.

Sanctions form the basis of the conflict between the United States and the European Union. It is possible to avoid a dispute, as well as maintain relations, only if the gas pipeline is completed before the amendments are adopted. These amendments also apply to the TurkStream gas pipeline, which became operational long ago. However, American lawmakers have diligently ignored this fact and continue to fight against its construction.

The author is an analyst and deputy general director of the Institute of National Energy.

The author’s opinion may not reflect the opinion of the editorial board.