The Pipeline

Nord Stream 2 Oil Pipeline: Business or Politics? Competition or Blackmail?

Germany is Europe’s principal industrial power. That’s their first problem. They are also the motor of the European economy. That’s a second strike against them. Angela Merkel, their prime minister, is one of a half dozen most respected world leaders. Added to all that, they’re cordial trading partners with Russia. Now they’re just months off activating an important natural-gas deal with the Russians via a new pipeline that runs beneath the Baltic sea from Ust-Luga in Russia to to Lubmin in Germany. It’s called Nord Stream 2.

President Trump has suggested that American liquified shale gas, which he calls “freedom gas,” might be a better alternative.

The Nord Stream project is a deal between two sovereign nations, beneficial to both. The Germans need a secure energy source to drive their industry long term and the Russians have massive natural gas fields within pipeline distance. The work of laying the undersea pipeline that began 10 years ago is 94% finished with just the final 144 kilometers remaining. The Germans stand to have their energy needs covered for decades and for the Russians it’s a plum sale. The Nord Stream 2 pipeline is also designed to link with ramifications that will extend to the Czech Republic, Slovakia, Austria and Italy.

“The gas pipeline is advantageous for end consumers in Germany due to a procurement advantage of around five percent,” according to Global Risk The economic policy spokesman for Germany’s Union parliamentary group, Joachim Pfeiffer (CDU), argued that the second Baltic Sea pipeline would provide “another transport route for gas and thus improve our energy security”.  (Source: Global Risk

But there’s a problem. The American government disapproves, alleging that the project would increase Russia’s influence in the region. American opposition to Nord Stream 2 may also be related to competition that Russian gas represents to their own liquified shale gas in the EU market, which they would ship to Europe aboard tanker ships. Meanwhile, American rhetoric is ratcheting up and they are rallying their allies and sympathetic media around the world to oppose the Nord Stream 2 operation.

Three Republican Senators

Three Republican senators–Ted Cruz of Texas, Tom Cotton of Arkansas and Ron Johnson of Wisconsin–have sent a belligerent letter to the municipal authorities of Murkan Port on the island of Rugen demanding that they cease their technical assistance to the Russian vessels constructing the final sections of the Nord Stream 2 gas pipeline. Ted Cruz calls the Russian-German natural gas deal “a direct assault on US national security.”

According to Deutsche Welle (DW), the German news agency, the senators are “threatening” the operators of this small German port with “crushing legal and economic sanctions.” In their letter the US senators accuse port operator, Faehrhafen Sassnitz, of “knowingly providing significant goods, services, and support” for the project and demanding that they “cease activities” supporting the construction of the pipeline or face “potentially fatal measures.” German Minister of State, Niels Annen, took umbrage at what he considered the senators’ bad manners, saying that he considered the tone and content of the senators’ letter “completely outrageous.” He added, “Threatening a close friend and ally with sanctions, and using that kind of language, will not work.” Annen told German public broadcaster ZDF, “European energy policy will be decided in Brussels, and not in Washington DC.”

Sounds Like Familiar Extraterritorial US Sanctions

According to US Secretary of State, Mike Pompeo, the Nord Stream 2 project is considered an activity related to Russian export pipelines and therefore “at risk of US sanctions.” Pompeo considers his statement as “a clear warning to companies aiding and abetting Russia’s malign-influence projects that will not be tolerated. Get out now or risk the consequences.”

This sounds more like Dodge City than Old Europe. Where does the mayor of Dodge derive the authority to ban legitimate commercial transactions on the other side of the Atlantic? Where does this American geopolitical arrogance originate? In overconfidence? Naivete? Greed? A historical self-perception of invulnerability? All of the above? Whatever the motives, with this extravagant pipeline stand the Americans are, by threatening the Germans and the Russians with sanctions, taking on two quite serious countries–and by extension the entire European Community. That prominent American politicians should proffer those threats, and in that language, serves mainly to reaffirm the world’s suspicions just how far off the rails the Americans have veered.

As for “malign -influence projects,” what is that supposed to communicate, beyond self-serving, preach-to-the-choir gibberish? Secretary Pompeo studied at the US Military Academy at West Point. Didn’t he read the history of Napoleon Bonaparte? Shouldn’t he be aware of the way imperial arrogance lubricated the slippery slope from Austerlitz to Waterloo?

The American Free-Trade Farce

The US has already imposed some sanctions on the ships laying the Nord Stream 2 pipes and has threatened to expand them if the pipeline is completed. The EU stressed that such a move would be “unacceptable” and Germany insisted the project “gives no cause” for sanctions. The German foreign affairs minister, Heiko Maas, defends the principal of free trade, insisting that the Nord Stream 2 pipeline issue is economic, not political. Russia has been the largest supplier of natural gas to the EU since 2018, according to the European Commission.

The free-trade argument is one that the fiercely-free-trading Americans should understand, but they appear not to. They go so far as to suggest that Germany would be better served by importing American liquified shale gas, transporting it thousands of miles across the Atlantic Ocean. It’s almost as if their desire to peddle their own gas influenced their thinking in a grotesque way. President Trump had his own take on American natural gas. He calls it “freedom gas.” This might be a cogent argument in Mississippi but anywhere else in the world it sounds simply inane.

What’s the End Game?

German authorities have expressed their firm intentions to finish the pipeline and start receiving Russian natural gas. Secretary of State Pompeo has countered with a Hollywood old-west-style ultimatum: “Get out now or face the consequences.” What happens now if the Germans and the Russians decide not to “get out?” Will the President give the order to bomb the Russian town of Ust-Luga, the source of the problem? Or Berlin? Or both?

May you live in interesting times.

P.S. That said, will the President still be President?

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