WASHINGTON -- Two former U.S. ambassadors criticized legislation that seeks to impose sanctions on companies building Russia’s $11-billion gas pipeline to Germany, saying it could harm relations between the two NATO countries.
Rather, they said the United States should threaten to sanction Russia if it reduces natural gas transit through Ukraine below a certain level.
Congress is seeking to sanction the vessels that are laying the Nord Stream 2 pipeline along the floor of the Baltic Sea in an attempt to halt the project, which U.S. lawmakers say will make Europe more dependent on Russian energy.
The pipeline will have the capacity to carry 55 billion cubic meters of natural gas annually to Germany, doubling the nation’s imports of Russian gas, while avoiding transit through Ukraine and Poland.
The project is weeks away from completion, but President Donald Trump is expected to sign the annual defense spending bill that contains the Nord Stream sanctions legislation on December 20. Swiss-based Allseas Group and its vessels are the primary targets.
Former Ambassador Daniel Fried, who crafted the State Department’s sanctions policy against Russia in 2014 after it annexed Crimea, said December 19 at an Atlantic Council conference in Washington that the Nord Stream 2 sanctions legislation “pits the U.S. against Germany” rather than against the Kremlin.
Fried said he thought the Germans were “wrong” for agreeing to Nord Stream 2, but “that doesn’t mean that the Germans are the problem. The Kremlin is the problem. It is their aggression and their use of energy as a coercive tool” that is a problem.
The aim of the Nord Stream sanctions is to ensure that Russian gas continues to flow through Ukraine and Central Europe by delaying its completion.
Russia’s launch of Nord Stream 2 and Turkstream, which runs under the Black Sea to Turkey, would enable the Kremlin to avoid transit through Ukraine, depriving the country of as much as $3 billion in fees.
However, some analysts and officials have said that even if sanctions are put in place, it would only be a matter of time before Russia would finish Nord Stream 2 on its own, leaving the United States with no leverage over transit.
Fried along with former Ambassador Richard Morningstar, who served as the Secretary of State’s special envoy for Eurasian energy during the Obama administration, suggested using the uncertainty over Nord Stream 2 sanctions to reach a deal with Germany and the European Union on other measures.
Fried and Morningstar suggested the United States could impose sanctions on Russia’s state-owned gas giant Gazprom -- such as on its debt, equity, and technology needs -- should Russian gas transit through Ukraine fall below a certain level.
Russia’s gas transit contract with Ukraine expires on January 1. The two sides said December 19 that they have reached an agreement in principle on a new transit contract though few details were given. Ukraine had been pushing for a long-term contract while Russia was seeking a one-year contract.
“If this [uncertainty] could drive us toward some kind of deal -- possibly with contingency sanctions -- that could be the most helpful outcome,” Morningstar said.
Fried said Washington will “have failed” if the story ends up being a U.S.-German fight over Russia policy.
“That is a bad outcome and I am eager to avoid it,” he said.