Did Biden lift sanctions on Nord Stream 2 to fix ties with Germany?

The US will lift sanctions against the Nord Stream 2 operating company and its CEO, a significant reversal of Trump-era policy that was aimed at scuttling the Russian efforts to supply gas to Germany and eventually to the whole of Europe. 

Under the Trump administration, Washington considered the Nord Stream 2 gas pipeline, which is worth $12 billion, as a geopolitical security risk that would affect the trans-Atlantic world. 

For some US-based security analysts, Biden's decision is largely seen as an attempt to ease tensions with Russia rather than strengthening Europe's energy security. 

"President Biden’s decision to greenlight Nord Stream 2 only emboldens the Kremlin, rewards Russia’s malign behavior in Europe, and undermines NATO’s energy security," US foreign policy expert, Luke Coffey, told TRT World. 

"If the Biden administration thinks that this will help improve relations with Russia, they are sadly mistaken. This has been the worst foreign policy decision taken by the Administration to date. It is now time for Congress to act to stop, or at least delay, the final construction of the pipeline,” said Coffey, who is Director of the Allison Center for Foreign Policy Studies at The Heritage Foundation. 

But Washington's announcement prompted a positive response from the German chancellor Angela Merkel. 

"President Biden has now moved toward us a bit on the Nord Stream 2 conflict, where we have different views but where we will now talk further about what are the necessary commonalities in relation to Russia," Merkel told the German public broadcaster WDR.

Biden's move however sparked criticism in the US. Republican Senator Ted Cruz from Texas lashed out at the US president, saying that the Biden administration is "shaping up to be the most pro-Russia administration of the modern era."

The former Trump administration's rationale behind imposing sanctions on Nord Stream 2 AG and its CEO Matthias Waring, was that the entire gas pipeline project could turn Germany into "a hostage of Russia". The move triggered a loud and clear opposition from several European leaders. 

Since Nord Stream 2 AG is a European company headquartered in Switzerland, Trump's sanctions were largely seen as an attack on a European company, with its trading bloc's spokesperson accusing him of imposing restrictions on a company that had been conducting "legitimate business".

But the Trump administration had not only voiced several concerns regarding the geopolitical risks the project posed, but also viewed Matthias Waring, the CEO, with deep suspicion. 

Waring was a former Stasi officer in the former communist bastion of East Germany. Before the intelligence unit was dissolved in 1990, Western nations, especially the US, saw it as a tool of coercion that was adopted by East Germany to silence voices of dissent. 

He reportedly shares close ties with Russian President Vladimir Putin. In one of the reports compiled by the US State Department from  2019, it was claimed he had engaged in "sanctionable activity".

Another troubling element for the US is that Russian energy giant Gazprom has a majority stake in the project. Gazprom works alongside an international consortium that includes Germany's Wintershall and Uniper groups, Dutch-British giant Shell, France's Engie and Austria's OMV.

But for the Biden administration, addressing the concerns of America's traditional allies in Europe seems to be more important than letting Russia sell its gas to Germany. 

While announcing the sanctions waiver, US Secretary of State Antony Blinken defended the decision, saying it will be "in the national interests of the United States."
"Today's actions demonstrate the administration’s commitment to energy security in Europe, consistent with the President’s pledge to rebuild relationships with our allies and partners in Europe," he said soon after concluding his meeting with Russian Foreign Minister Sergei Lavrov. The two representatives met in Iceland for an Arctic Council conference.

Repairing relations in a new era 

The decision, apart from strengthening Washington's relations with its European allies, is also in line with Biden's strategy of easing US-Russia tensions. 

In this context, Blinken held nearly two hours of talks in Reykjavik with Russia’s Lavrov. Both officials described the occasion as "constructive" and "useful”. 

Nonetheless, Washington remains cautious as it fears Russia could use Nord Stream 2 as leverage to weaken European Union states by increasing dependency on Moscow.

The Project

Russia is the largest exporter of natural gas and oil to the European Union as up to 60 percent of EU imports are energy products.

Five separate gas and oil pipelines already transport Russian energy to the EU - mainly through Eastern Europe and Ukraine. Three gas pipelines go through Ukraine, making it one of the major negotiators and profiteers of the energy flow.

To avoid costly and time-consuming channels via middle powers like the Ukraine, Russia and European states are building alternative routes. The Nord Stream 1 and the planned Nord Stream 2 are part of that wider plan. 

The 1,200-kilometre-long pipeline will run beneath the Baltic Sea and will directly transfer gas from Russia to Germany, Europe's largest economy. More than 95 percent of the project is already completed. 

Meanwhile, back in the US, criticism mounts as Republican Party members seem unwilling to let Biden off the hook. Some Democrats have also joined the chorus. 

Senator Bob Menendez, a Democrat and chair of the committee, said Biden "should do everything possible to accomplish what the Trump administration failed to do for four years: stop the completion of the Nord Stream 2 pipeline for good". 

Many critics have pointed out that the project would change the geopolitical dynamics in eastern Europe, especially for Ukraine. Kiev strongly opposes the project which would bypass Ukraine and potentially undermine its struggle against Russian domination. 

Yuriy Vitrenko, the new CEO of Ukraine's state-owned energy company, Naftogaz, said Nord Stream 2 is Russia's "most malign and dangerous geopolitical project".