The Biden administration is gearing up to announce fresh sanctions against Nord Stream 2, the joint venture between Russian energy company Gazprom and five European partners, according to sources referenced by Politico.
Increased pressure on the US President comes as lawmakers demand efforts be made to derail the near-finished energy project before it’s too late, writes the outlet.
Congressionally-mandated guidelines require the US President to report to Congress regarding Nord Stream 2-related developments every 90 days, identifying entities involved in the construction that are eligible for sanctions.
Accordingly, officials were cited as saying fresh ‘targets’ could be determined before the next report is due in May.
“…We are continuing to look at entities that may be involved in sanctionable activities and will take necessary follow-on steps from there,” a senior administration official was quoted as saying.
This stance was earlier voiced by State Department spokesperson Ned Price, who was quoted by the outlet as emphasising that “we are always looking at pipeline activity that would be sanctionable, so if we see activity that meets that threshold we are prepared to follow the law”.
There is no clarity regarding which entities the US administration might sanction next, claim sources, adding they will likely include Russian vessels and companies involved in the project.
The current diplomatic situation surrounding the Nord Stream 2 project that the US administration seeks to impede has been called ‘delicate’ by Politico’s sources.
Joe Biden, who made no bones about declaring that Nord Stream 2 is a “bad deal for Europe,” has been walking a diplomatic tightrope, as he balances the US administration’s efforts to impede the project against a need to bolster Washington’s ties with Berlin.
Germany has been lobbying for the pipeline’s construction to continue unabated.
“We’re between a rock and a hard place,” a senior administration official was quoted as acknowledging.
Sen. Chris Murphy (D-Conn.) said earlier that “as long as we’re targeting Russian assets, we’re on safe ground,” adding:
“This is not the moment to create any greater fissure with Europe than is absolutely necessary.”
At the same time, there has been bipartisan political pressure on the Biden administration to display more definitive action.
Republican lawmakers sent a letter to secretary of state Anthony Blinken last week naming over a dozen such entities, including Russian offshore supply ships and insurance and inspection companies, said to have been identified by open-source maritime vessel trackers, writes the outlet.
Secretary of State Antony Blinken on Thursday briefed members of the Senate Foreign Relations Committee on the issue, while offering little clarity on whether further sanctions could be anticipated.
This immediately triggered backlash.
Co-author of a provision in the annual defence bill that required sanctions on entities supporting construction of Nord Stream 2, Sen. Ted Cruz (R-Texas), was quoted as saying:
“If the Biden administration dithers, if they defy the law, they will have turned a major foreign policy victory for America into a major foreign policy loss and a gift of billions of dollars in perpetuity to Vladimir Putin.”
Sen. Ted Cruz announces he will put holds on Biden nominees Wendy Sherman and Brian McKeon pic.twitter.com/3RYVbb2EkG— The Hill (@thehill) March 11, 2021
Cruz earlier put on hold Senate confirmation of Joe Biden’s nominees for CIA director and deputy secretary of state, using the delay as leverage to ramp up pressure on the administration.
“I told Secretary Blinken, I would be thrilled to lift the holds on the State Department nominees today if they would only follow the law and issue an interim report identifying all of the companies subject to mandatory sanctions,” added Cruz.
Berlin’s Lobby Effort
Meanwhile, Germany has been floating options to appease Washington and allow the pipeline to be completed.
Offers ranged from trade deals to increased investment in green energy projects in Europe and Ukraine, claim sources.
The mulled suggestions reportedly included partnering with the US to adopt a tougher stance against China.
In 2020 the German Ministry of Finance had ostensibly offered to channel 1 billion euros to “massively increase its public support for the construction of LNG terminals along the German coastline”, according to documents published by the non-profit Environmental Action Germany (DUH) and cited by DW.
In exchange, it reportedly sought guarantees of “undhindered construction and operation of Nord Stream 2.” However, the offer reportedly failed to strike a chord with the Trump administration.
“The question is whether Germany can come up with a deal that [Biden] couldn’t refuse. Biden could then go to Congress with that and say, ‘Look at what we’ve got,’” a former ambassador reportedly said.
Earlier, a spokesperson for the German Ministry of Finance confirmed that Berlin was “is in contact with the US government regarding US sanctions and sanction threats regarding Nord Stream 2.” No further details were revealed.
‘Scaremongering’ Over Nord Stream 2
Nord Stream 2, a joint venture between Russia’s Gazprom, Germany’s Uniper and Wintershall, France’s ENGIE, Austria’s OMV, and the UK-Dutch conglomerate Royal Dutch Shell is over 95 percent complete, and construction is expected to wrap up sometime before the end of the year.
Once this is done, the 745-mile-long twin pipeline network along the bottom of the Baltic Sea, bypassing Ukraine, will be able to carry up to 55 billion cubic meters of gas annually from Russia to Germany.
The project has been vilified by Washington as an alleged ‘threat’ to the energy security of Europe and Ukraine.
The Trump administration introduced the first batch of sanctions against it, arguing the pipeline will create too much European dependence on Russian energy supplies, while Washington ultimately seeks to promote its own more expensive LNG.
Previously introduced punitive measures led several companies, such as Switzerland-based contractor AllSeas, to pull out of Nord Stream 2.
Driven by fears of retribution on the part of Washington, other firms, such as insurers and certification providers, also halted their involvement in the construction.
Both Moscow and Berlin, which has been under increased pressure by Washington over its role in the project, have slammed the sanctions as an example of unfair competition.
Trump's successor, Democratic President Joe Biden has until now failed to impose any additional measures, despite calls from the US Congress to do so.