By Anthony Faiola
with Claire Parker
Sections of Nord Stream 2 pipes at the Baltic port of Mukran on the island of Ruegen in Sassnitz, (Alex Kraus/Bloomberg)
Built at a cost of $11 billion, the new Nord Stream 2 pipeline from Russia to Germany is — depending on who you ask — an energy lifeline for German factories or a gift to Russian President Vladimir Putin as he tries to hold the continent hostage with Russian gas. Either way, the big question facing the project’s future is this: Will Nord Stream 2 ever be switched on?
One thing is clear: Less than two weeks into the new German chancellor’s tenure, the pipeline’s fate is the headache Olaf Scholz didn’t need — and one of the biggest early tests of German leadership in a post-Angela Merkel world. Finished in September after five years of construction, the pipeline is ready to roll. But with Russian troops massing at Ukraine’s border, Scholz is under enormous pressure from European allies to use the pipeline as a cudgel against Putin.
As arcane as a European gas pipeline might sound, its diplomatic, political and economic ramifications are vast. The new pipeline stretches along a similar 764-mile route to the already-operational Nord Stream 1 and would double the capacity of Russian gas to Germany — importantly bypassing a grid that runs to the European Union through Ukraine. Kyiv counts on the gas transit fees it charges Moscow as an important source of income. The new pipeline gives Putin the strategic option of cutting Ukraine out as he sees fit, while leaving his hand on the spigots that power Germany and much of the rest of the E.U.
On this side of the Atlantic, Sen. Ted Cruz (R-Tex.) is seeking to pound the nails in the pipeline’s coffin. After holding up key Biden administration ambassador confirmations, he reached a deal with Senate Majority Leader Charles E. Schumer early Saturday to cease his obstructions in exchange for a January vote on tough new sanctions against Nord Stream 2. He will need 60 votes — meaning all Republicans plus 10 Democrats — which is a high bar in the polarized U.S. Senate.
But pressure is not coming from Cruz alone. The Biden administration has sought to mend ties with Germany, strained during the Trump years, by treading more lightly on Nord Stream 2. Still, it is no fan of the project. As Putin rattles his saber, the White House, as well as a gaggle of vocal E.U. leaders, particularly in Eastern Europe, want a pledge from Scholz to nix the pipeline in the event of stepped-up Russian aggression.
More broadly, critics argue that, with Nord Stream 2, the Germans are simply handing Putin a noose for their own necks. In recent months, Russia has stood accused of deliberately failing to meet increased European demand, leading to spiraling prices and low storage levels across the continent. Though Putin has denied it, critics called it a message to the E.U.: Open the new pipeline, or else.
Polish Prime Minister Mateusz Morawiecki called on Scholz this month “not to give in to pressure from Russia and not to allow Nord Stream 2 to be used as an instrument for blackmail.” Germany’s own new foreign minister, Annalena Baerbock — whose party, the Greens, has long opposed Nord Stream 2 — also recently said the pipeline should not be opened in the event of Russian escalation.
But for Scholz, the calculation is more complicated. Despite painful memories of the Soviet era, many Germans harbor more pragmatic views on Russia than their peers to the west. The German public is distrustful of Putin, polls show, but less so than the Americans, British, French, Swedish or Dutch. In addition, the Germans have been generally supportive of the pipeline’s completion.
Eyeing U.S. imports of Russian oil, some Germans also see hypocrisy in Washington’s attempts to squash Nord Stream 2. The Trump administration imposed targeted sanctions on the project. In May, the Biden administration waived sanctions on the primary company overseeing it, but has still sought to sanction the pipeline at the margins.
“I think the unfortunate side effect of American economic sanctions, in the context of the Trump administration, was to make Germans feel defensive and mulish,” Constanze Stelzenmüller, a German expert at the Brookings Institution, told me. “I think there was a sense of being hammered over the head by an American president using a double standard.”
Like Nord Steam 1, the new pipeline had the early backing of a formidable insider: former chancellor Gerhard Schröder. After his defeat by Merkel in 2005, Schröder became Nord Stream’s chairman — as well as an effective Putin lobbyist in Berlin. Merkel, meanwhile, saw the Russian pipelines as a solution to the complex energy needs of Europe’s largest economy, particularly after her 2011 decision to phase out nuclear power in the wake of Japan’s Fukushima disaster.
Pipeline opponents are essentially asking Scholz to wager Germany’s energy future on a diplomatic bet against Putin. Renewables like wind and solar have grown substantially but still have limits. At the same time, Germany is trying to live up to ambitious climate targets that are forcing it to wean itself off coal.
With nuclear off the table, natural gas remains a key German energy source — and one that German manufacturers were banking on for the foreseeable future. European countries have sought to diversify by importing liquefied natural gas from the United States. But with other natural gas sources in Britain, Holland and Norway finite and poised for longer term declines, Russia seems to be Germany’s most logical source — even if that flies in the face of regional and transatlantic security.
The Nord Stream pipelines, meanwhile, are seen as far more state of the art, reliable and efficient than the creaking, leaking grid in Ukraine. That’s one reason the E.U. is divided on the pipeline. Austria, for instance, is pushing for its speedy opening.
A move by Scholz to mothball Nord Stream 2 “would alienate the German industrial base that thinks of this as a source of energy they were counting on,” Nikos Tsafos, an energy expert with Center for Strategic and International Studies, told me. “But you also lose any pretense of the rule of law, that even if you follow procedure and satisfy German government regulations, you still can’t start it.”
With winter approaching, the Germans have done what their bureaucracy does best: buy time with paperwork. Last week, the German energy regulator announced that a decision on final certification of Nord Stream 2 would not happen until the second half of 2022. By then, the Germans may know whether Russian troops have stormed Ukraine’s borders — or if tensions have cooled down enough to revisit its opening.
Even if he never gets his pipeline, one person may be enjoying the tussle between allies more than anyone else.
“Putin must be in heaven watching this, frankly,” said Judy Dempsey, a senior fellow at Carnegie Europe.
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