US Reaffirms Opposition to Russian Gas Pipeline Projects Ahead of Trump–Putin Summit

July 1, 2018 Updated: July 1, 2018

The United States reaffirmed its opposition to two Russian gas pipeline projects in Europe on June 29, one day after the White House confirmed a meeting between President Donald Trump and Russian President Vladimir Putin.

Trump administration officials have voiced opposition to Russia’s Nord Stream 2 and TurkStream pipelines for months, saying that the projects are a political move meant to cut Ukraine out of a lucrative transport contract. Top diplomats are also concerned that the pipelines are a step backward from Europe’s goal of diversifying its energy supply.

Nord Stream 2 is an expansion of the world’s longest undersea pipeline, linking Russia to Germany. Turkstream is a gas pipeline running from Russia to Turkey. Both projects are currently under construction.

Trump has said he is not happy with Nord Stream 2 moving forward, according to a briefing with a senior administration official in April this year. The president was especially concerned because Germany moved forward with the project while fully aware of the United States’ goal of helping allies diversify their energy supplies as a matter of national security, the official said.

The State Department reaffirmed its position on June 29. While lauding American allies in Europe on recent progress in diversifying energy supplies, Heather Nauert, the department spokesperson, said that the Russian pipelines “would exacerbate Europe’s dependence on Russian-sourced energy.”

If allowed to proceed, Nord Stream 2 would double the capacity of the current Nord Stream pipeline to 3.9 trillion cubic feet of natural gas per year by 2019.

The project has faced opposition from the United States and a host of European countries. Eight European leaders signed a letter in March objecting to the gas link, saying it would generate “potentially destabilizing geopolitical consequences.” Last year, a group of 10 American senators voiced their objections to Nord Stream 2 in a letter to Jean-Claude Juncker, the president of the European Commission. The pipeline would be a step back “in the diversification of Europe’s energy sources, supplies, and routes,” the letter said.

Mary Burce Warlick, the acting special envoy for International Energy Affairs at the Department of State, said in a briefing last year, “We agree with many of our European partners that these projects will reinforce Russian dominance of Europe’s gas market, reduce opportunities for diversification of energy sources, and advance Russia’s goal of undermining Ukraine by ending Ukraine’s role as a transit country for Russian gas exports to Europe.

“In fact, construction of Nord Stream 2 would concentrate 80 percent of Russian gas imports to the EU through a single route, creating a potential chokepoint that would significantly increase Europe’s vulnerability to a supply disruption.”

Half of Nord Stream 2’s $9.5 billion price tag is financed by Gazprom, a Russian state-owned gas company. The other half is financed through loans by a group of five corporations: Germany’s Uniper and Wintershall, France’s Engie, Austria’s OMV, and the Dutch-British oil giant Royal Dutch Shell.

Gazprom is the EU’s largest gas supplier. Many EU officials have long resisted the Nord Stream 2 project, fearing that it would solidify Russia’s dominance over the European gas market and reduce Gazprom’s reliance on exporting gas via Ukraine.

Donald Tusk, the president of the European Council, has said that the pipeline is not in the EU’s interests and believes the project flouts the union’s rules. Last year, a group of 65 European Parliament members urged Tusk and Juncker to stop the project.

Germany continues to defend the project, casting it as purely a business venture. As a result, the debate over Nord Stream 2 pitches a handful of dominant EU members like Germany against a large number of smaller central and Eastern European nations.

American officials have also noted dissatisfaction with Germany and other EU members who are allowing Nord Stream 2 to proceed. Former Secretary of State Rex Tillerson opposed the project publicly in January, saying it would undermine Europe’s security. Just days after his announcement, Germany granted Nord Stream 2 a permit for construction and operation in German waters and landfall areas.

Russia’s gas export pipelines are intensely political because of its invasion of Ukraine. Half of the gas that Gazprom sells to the European Union transits through Ukraine.

Seeking to assuage concerns that the pipeline project is a political power play by Moscow, German Vice Chancellor Sigmar Gabriel traveled early this year to Poland, where he promised the new pipeline would go ahead only if Russia did not cut off Ukraine and Eastern European gas flows. Russia has made no such promise. The combined capacity of Nord Stream 2 and TurkStream would relieve it of the need to transit gas through Ukraine.

“Russia currently has the ability to supply gas to Europe across Ukraine. So adding Nord Stream 2 is not adding a new capability of supplying gas that doesn’t exist,” Kurt Volcker, the U.S. special representative for Ukraine negotiations, said on May 24.

“It is, rather, replacing one. And it is intended … purely as a political act by Russia in order to put Ukraine and also to some degree the Baltic states and Poland at a higher degree of vulnerability to Russian pressure. So it’s a purely political project.”

Trump told reporters aboard Air Force One on June 29 that he plans to talk to Putin about Ukraine and Syria. The United States does not officially recognize Russia’s annexation of Crimea. Trump said former President Barack Obama was to blame for allowing the invasion to happen.

The White House has issued several rounds of sanctions against Russia for its operations in Ukraine and its destabilizing activity in the United States and around the world. In May, the State Department threatened to sanction the companies involved in Nord Stream 2.

Trump and Putin are scheduled to meet in Helsinki, Finland, on July 16.

 

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