Prisoner's dilemma: The belated reopening of the policy debate around the North Stream 2 pipeline project at a point when it is more than 90% complete, in an attempt of the Biden administration to improve relations with Germany (and the EU) and to increase cooperation on deterring China, risks failing to deliver a much-needed robust response to continuing malign Russian actions in Europe and the U.S.
Strategic win for Russia: More than a decade after the launch of Nord Stream 2 and South Stream (with its contemporary reincarnation – TurkStream), the Russian energy and foreign policy strategy of circumventing Ukraine and expanding Europe’s dependence on Gazprom is about to succeed completely. The Kremlin will in effect lock Europe in a gas dependence in times of an energy transition push to phase out coal and nuclear.
The EU’s diversification plans away from excessive Russian gas dependence that started in 2009 have fallen prey to the private interests of well-connected large European energy companies that have benefited from the construction of Gazprom-led pipelines. The combined weight of bilateral supply agreements between European states and Russia adds up to a level of vulnerability, which an increasingly assertive Kremlin will continue to exploit as its most potent instrument for power projection.
South Stream reborn: Nord Stream’s twin in the Black Sea, the South Stream project, in the form of the smaller but equally detrimental for European energy security TurkStream, has already been partially completed. The strong support of Germany for the implementation of Nord Stream 2 has, in practice, made TurkStream inevitable and any coordinated EU response against the project unlikely. Nord Stream has created a precedent, in which a politically-driven pipeline that does not contribute to the diversification of the European energy supply receives a de facto exemption from the EU energy competition rules.
Russia has also been able to evade U.S. sanctions by using Saudi, Belarussian, European and even American companies for TurkStream’s construction. The pipeline, whose first phase became operational in January 2021, will crowd out alternative LNG and Azeri gas supply from the regional gas market in Southeast Europe by blocking existing cross-border trading capacity. The project has also become an effective instrument to feed Russian and local pro-Russian oligarchic networks, which capture political figures, state-owned energy enterprises and regulatory institutions to expand Russian economic and political influence.
The European (energy) security is indivisible: It is still possible to reverse the negative trend of growing malign Russian influence in Europe. Transatlantic relations should focus on the core issue of strengthening Europe’s energy independence by not allowing the completion or use of any of the two interdependent Kremlin-driven pipeline projects. Not only is such a policy more comprehensive and based on principle, but it also transcends the bilateral relations between the U.S. and Germany.