The U.S. is in a geopolitical mess over the Nord Stream 2 pipeline

By |2018-10-25T22:11:29+00:00October 25th, 2018|Energy|0 Comments

By Todd Royal

Since hydraulic fracturing (fracking) has upended geopolitics with record exploration and production of shale reserves in the United States (US), the Trump administration is now able to confront OPEC and OPEC+ while and truly working towards “energy independence.” The US is the new energy superpower – essentially the soft power of oil and natural gas production – over military power has rebalanced global energy markets and geopolitics in the Middle East. Domestic investment, innovation and the booming US economy has allowed the US to become the world’s top natural gas producer in 2009, “passing Russia,” and the top producer of “petroleum hydrocarbons since 2014, passing Saudi Arabia.”

When Congress lifted the 40-year ban on US crude and natural gas exports this exploded fossil fuel exports. But this has also propelled the US into the geopolitical mess the Germans have sown over allowing Russian control of the controversial Nord Stream 2 pipeline (NS2), which critics contend, “will strengthen Russia’s hand in Europe and isolate Ukraine.” Now is time for the Germans to, “ look in the mirror,” and ask why they have allowed Russian energy ascendance when their military, foreign policy and Merkel’s government are crumbling before the world’s eyes.

While Germany may view this as a commercial project, the US has aligned with Poland and is attempting to force the Germans into joint-demands if the project is ever to materialize. This “unusual foray” into European and German energy politics occurred when the Germans furthered weakened Ukraine and NATO by choosing an additional 55 billion cubic meters (bcm) of Russian Gazprom natural gas over Washington and Brussels’ interest in keeping Russia’s impact on European energy security away from Europe.

Washington’s anger led by President Trump is causing his administration to consider sanctions on Germany and abandoning a US-European trade deal unless the Germans and other European backers drop Nord Stream 2 from consideration. What additionally troubles Washington and NATO are recent Russian ventures in Greece that has Macedonia caught in the middle. Russia’s foreign minister recently canceled a trip to Greece:

“As tensions escalated between the two countries over a decision by Athens to expel two diplomats accused of trying to stoke opposition to an agreement that would, ‘clear the way for Macedonia to join NATO.’”

This has given Trump the impetus to pushback against NS2 over German and European consternation; forgoing the consequences of increased Russian involvement in European affairs. They simply want the natural gas, as German energy prices – over increased renewable energy use – are the highest in Europe and globally for an industrialized country. NS2 is dividing Europe when they’re already dealing with surging nationalism, incoherent immigration policies and a splintering of wealthier Northern European countries versus there poorer Southern European Union (EU)-bloc nations.

Unfortunately, the EU hasn’t dealt with the increased weaponization of Russian natural gas as a foreign policy tool, led in Europe by Gazprom’s, “stranglehold on the Continent’s gas market.” The US wants the entire EU and European hemisphere to rely on US natural gas or – possibly Middle Eastern sources that exclude Iran – but instead of diversifying, Europe has allowed, “Russian natural gas exports to the EU hit a record 155 bcm in 2017.” Previously, Russia has weaponized their energy resources against countries like Poland, Czechoslovakia, Ukraine, Latvia, and Estonia by withholding natural gas supplies, prices and contract manipulation. Putin believes they are buffers against invasion that took place under Napoleon and Hitler

Poland’s natural gas in cold winter months has been controlled by Gazprom’s Yamal-Europe pipeline; and Ukraine has been invaded and controlled by Gazprom’s war-like offensive nature of energy market manipulation that occurred for over a decade. It can be argued that Gazprom and Rosneft have a monopoly on the EU and former Soviet-satellite state’s energy prosperity and economic growth. This is why the Trump administration is worried about the Kremlin’s control over NATO, the EU’s economic health and the soft mixed with hard power of Russian energy resources on geopolitics.

Harsh Russian actions have caused countries – outside of German influence and wary of their large neighbor to the east – to diversify energy holdings and align with the US like never before. In an unprecedented move to counter Russian influence and German indifference towards NS2, “Poland wants a permanent military based, named ‘Fort Trump.’” Slovakia, Poland and the Czech Republic struggle with NS2 because it can deliver natural gas directly to Germany without crossing their borders or soil:

“Meaning Russia could sever or manipulate separate natural gas supplies to these nations without worrying about the consequences for the larger German market.” The future will likely bring geopolitical, economic and certainly linked energy ties between Poland and the US.

The US and Poland are the biggest barriers to NS2 becoming an accepted reality over Germany’s objections. The US wants Eastern European nations stronger; and it is not surprising that, “Norway hosts NATO’s biggest exercises since the end of the Cold War to remind Russia the Alliance stands united.” Poland and the Baltic States are not going to sit back and let NS2 or Russian energy interests backed by their military dictate the near or coming future. The US also has the Countering America’s Adversaries Through Sanctions Act of 2017, “to sanction any foreign firm that facilitates investment in Russian energy export pipelines, including construction. This includes NS2 and possibly the Turkish pipeline (Turk Stream); putting Washington, Warsaw, Kiev and reluctantly it seems NATO and the EU on hawkish terms against Moscow and Ankara.

Berlin though, argues NS2 doesn’t have any direct, geopolitical consequences and mechanisms such as the European Energy Community’s three-pronged strategy negate Gazprom, Rosneft’s or the Kremlin’s advantages gained from NS2. The difficulty understanding how a working policy paper, European best practices and regulatory oversight are going to stop Putin from advancing his agenda are reasons why the EU needs to reconsider its stance towards NS2. Countries east of Berlin who have been terrorized by Russian aggression for centuries will seek deeper US involvement and enlarge their own militaries by possibly seeking nuclear arsenals. An illustration of how Poland feels is the same way Japan looks at Chinese aggression in the South China Sea and would eventually seek nuclear weapons. NS2 has dangerous geopolitical, economic and global stability ramifications the Germans aren’t considering.

All choices for Berlin against Washington over pipeline politics and energy diplomacy involving NS2 and Moscow means Merkel’s government will either compromise with Trump – which doesn’t seem likely – or alienate Washington, Poland and most Baltic states. Trade deals and threatened sanctions from the US will involve resolving the NS2 situation that Germany and the EU have brought to the forefront. Russia will abuse its power, leverage, supply and geopolitical advantages that can be gained from NS2 and Turk Stream no matter the consequences. Its now time for Germany, the EU, NATO and the Trump administration to decide the greater concern: stopping Russian energy aggression or putting aside disagreements and counter the greatest threat to EU stability that NS2 presents since the end of the Cold War.