U.S. Threatens To Expand Sanctions On Nord Stream 2 As Russia Moves To Complete Pipeline
The United States has threatened to sanction any individual
or company helping Russia build a controversial natural gas pipeline to Germany
as the Kremlin moves to complete the last kilometers of the nearly $11 billion
project.
“Get out now -- or risk the consequences,” U.S. Secretary of
State Mike Pompeo said July 15 during a press conference in Washington
announcing the new sanction guidelines for the Nord Stream 2 pipeline.
The State Department essentially removed language that
excluded the pipeline from the powerful Countering America's Adversaries
Through Sanctions Act (CAATSA), which was passed in 2017.
Unable to use CAATSA, the United States in December passed
legislation to sanction any vessel laying underwater pipes for the Nord Stream
2 pipeline, forcing Swiss-based Allseas to quit the project with just about 160
kilometers remaining.
The pipeline, which consists of two parallel lines running
under the Baltic Sea, is a combined 1,230 kilometers in length.
Russia is now trying to use its own vessels to finish Nord
Stream 2 after receiving permission from Denmark earlier this month. The
unfinished portion of the pipeline lies in Denmark’s economic waters.
However, the Russian ship would still need to use the
services of Western companies, such as port facilities and insurance, giving
the United States the potential to hamper their efforts.
CAATSA allowed Congress to sanction Russian energy export
pipelines but contained guidance put in by Pompeo’s predecessor, Rex Tillerson,
that grandfathered in Nord Stream 2 and the second leg of TurkStream, which
runs under the Black Sea to Turkey.
Pompeo said the State Department is updating the public guidance
for CAATSA authorities to include the two Russian-led projects, which he
described as “Kremlin tools” to expand European dependence on Russian energy
supplies and undermine Ukraine.
Pompeo is set to visit Denmark on July 22 to discuss the
pipeline, among other issues.
Nord Stream 2 would pump up to 55 billion cubic meters of
natural gas to Germany annually upon its completion, doubling the European
nation’s import of Russian gas.
The project enables Moscow to significantly reduce natural
gas shipments through Ukraine, which currently earns billions of dollars
annually in transit fees.
“They are winding up and laying the ground for the
imposition of additional sanctions if Russia attempts to deploy its pipe-laying
vessels,” said Dan Vajdic, an adviser to Ukraine’s state-owned energy firm
Naftogaz, which lobbied Washington to impose more sanctions.
The United States is seeking to export more natural gas to
Europe while helping Eastern and Central Europe develop the necessary
infrastructure to reduce their dependence on Russian oil and gas.
Congress last year approved up to $1 billion in financing for
energy infrastructure projects in the region.
James Carafano, a national security and foreign policy
fellow at The Heritage Foundation, told a congressional hearing on July 14 that
the completion of Nord Stream 2 would destroy the economic rationale for such
U.S.-backed projects.
The State Department has denied that the threat of new
sanctions against Nord Stream 2 and TurkStream are designed to help U.S.
exporters of natural gas.
Nonetheless, State Department spokeswoman Morgan Ortagus
told RFE/RL in an interview that Russia and Gazprom are in a "difficult
position" to be able to finish Nord Stream 2.
"Companies basically have to choose -- you can do
business with the Russians and Gazprom or you can do business with the United
States. We think that companies will make the decision that it is more
lucrative to do business with the United States," she said.
Senator Ted Cruz (Republican-Texas) urged Congress to give
the White House more firepower to stop Nord Stream 2 by passing legislation
that would impose more sanctions on the pipeline, including on insurance and
certification companies.
"The Kremlin will no doubt continue its frantic efforts
to circumvent American sanctions, and so it is imperative that Congress provide
the administration the broadest possible authorities to counter these
ever-changing attempts at evasion," he said in a statement.
Cruz's home state of Texas is the largest producer of
natural gas in the United States and a key energy exporter.
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