WORLD FUTURE FUND
CONGRESSIONAL SANCTIONS ON NORD STREAM 2
A CASE STUDY OF WHAT NOT TO DO
IN US RUSSIA RELATIONS
In the draft of the 2020 National Defense Authorization Act, there is a plan to add sanctions to the new German Russian gas pipeline (Nord Stream 2) to deliver natural gas to Europe via a pipeline from Russia to Germany.
This makes no sense. It's most likely too late for the U.S. to prevent Russia from finishing the project. Russia has already received the last permission it needs to close the distance between the Leningrad region and the Baltic coast of Germany. And on October 1st, 2019, Gazprom stated that the project was already 83% finished (Bloomberg, 11-1-19). The Ted Cruz bill is likely to be ineffective, because even though Gazprom is currently using a Swiss-based contractor, they can switch to using their own vessel for the final stretch.
House and Senate lawmakers have yet to reach a final deal on the massive bill. But such a decision would further amp up tensions between the United States and Russia. The deadline is December 20th for appropriations bills.
The text of the sanctions provision has not been made public, but Risch said it is close to the “Protecting Europe’s Energy Security Act,” sponsored by Sen. Ted Cruz, R-Texas, which the Senate Foreign Relations Committee passed 20-to-2 in July. That bill would sanction companies operating vessels that lay pipes for the Nord Stream 2 and TurkStream pipelines. (Defense News, 11-23-19)
The pipeline is owned by Russia’s state-owned energy company Gazprom, though half the cost is being financed by five European energy companies.
The only thing these sanctions will do is damage relations with both Russia and Germany.
RUSSIAN NORD STREAM 2 PIPELINE MAP
NATIONAL DEFENSE AUTHORIZATION ACT 2020
SENATOR CRUZ AND SHAHEEN BILL TO IMPOSE SANCTIONS ON RUSSIAN PIPELINE
Congress to target Russian pipeline in defense bill (Defense News, 11-23-19)
The U.S. Dithered Too Long on Nord Stream 2 (Bloomberg, 11-1-19)