Biden Believes Nord Stream 2 Pipeline Is ‘Bad Deal’ for Europe: White House Press Secretary

White House press secretary Jen Psaki speaks during the daily briefing in the Brady Briefing Room of the White House in Washington on Jan. 26, 2021. (Mandel Ngan/AFP/Getty Images)

White House press secretary Jen Psaki said Tuesday that President Joe Biden believes the Nord Stream 2 natural gas pipeline is a “bad deal for Europe” and the administration will review restrictions on the project.

Psaki made the remarks in response to a question at a White House press briefing, when she was asked by Polish Radio reporter Marek Walkuski whether Biden is “determined to use all the tools he has, like sanctions, to stop the project.” Poland has long opposed the mammoth project that would let Germany double its Russian gas imports, with the Polish anti-monopoly watchdog in October fining Gazprom, the Russian state energy company leading the project, $7.61 billion over the pipeline, arguing it would have “serious consequences for Poland’s and the EU’s economy.”

Psaki responded to the Polish reporter’s question by saying that Biden “continues to believe that Nord Stream 2 is a bad deal for Europe.” She added that the Biden administration would review the restrictions on the project that were imposed during President Donald Trump’s administration under the National Defense Authorization Act, the annual defense policy bill that passed on Jan. 1.

The Trump administration imposed sanctions on any companies helping Gazprom, the Russian state energy company leading the project, to lay pipeline, insure vessels, or verify equipment.

The Nord Stream gas pipeline system. (Congressional Research Service)

Trump opposed the project on the grounds that it would strengthen Russian President Vladimir Putin’s economic and political influence over Europe. Poland has been one of the fiercest critics of the pipeline, which would sharply reduce central and Eastern European countries’ bargaining power in case of a supply row with Russia, which has in the past cut deliveries of the fuel to Ukraine and parts of Europe in winter during pricing disputes. Many EU officials in Brussels have also expressed opposition to the project, hoping to reduce the bloc’s energy dependence on Russia.

Besides opposing the Nord Stream 2 project, the Trump administration also sought to expand U.S. liquefied gas exports to the EU, as part of a larger effort to diversify European energy imports.

Biden has also opposed the project, which would bypass Ukraine and deprive it of lucrative transit fees, since he was vice president under former President Barack Obama.

Berlin has forged ahead with the project, however, with both Russia and Germany arguing the pipeline is a purely commercial project.

A ship works offshore in the Baltic Sea on the natural gas pipeline Nord Stream 2 from Russia to Germany on Nov. 11, 2018. (Bernd Wuestneck/dpa via AP)

The $11 billion pipeline, which is 90 percent complete, would double the capacity of the existing Nord Stream duct to deliver gas from Russia to Europe via Germany under the Baltic Sea.

The issue is coming to a head as the Senate has begun confirming Biden Cabinet members who could weigh in on decisions on the project, including Secretary of State Antony Blinken, and as construction resumes after being stalled for about a year following a threat of sanctions from the United States and the withdrawal of pipe-laying company Allseas.

A ship called the Fortuna on which Washington slapped sanctions on Trump’s last full day in office last Wednesday, has begun work in deep waters off Denmark, ahead of the resumption of construction, Nord Stream 2 said on Sunday.

The State Department is expected to issue a report to Congress soon on the companies helping Gazprom complete the project, which could add pressure to firms to drop out. Some companies, including Zurich Insurance Group and Norway’s risk management and quality assurance firm DNV GL, have dropped work on the project.

Reuters contributed to this report.