A Look at Euro-Russian Energy Deal Opposed by Trump

President Donald Trump’s criticism of Germany’s involvement in a natural gas pipeline deal with Russia launched a tense two days of NATO meetings in Brussels — but it also may have set the tone for the U.S. leader’s highly anticipated summit with his Russian counterpart Monday in Helsinki.

In a taut exchange with NATO Secretary-General Jens Stoltenberg on Wednesday, Trump said Nord Stream 2 — an offshore pipeline that would deliver gas to Germany directly from Russia via the Baltic Sea — leaves the Western military alliance’s largest and wealthiest European member “totally controlled” by and “captive to” Russia.

“We’re supposed to protect you against Russia but [Germany is] paying billions of dollars to Russia, and I think that’s very inappropriate,” Trump told Stoltenberg.

According to the U.S. leader, Germany “got rid of their coal plants, got rid of their nuclear, they’re getting so much of the oil and gas from Russia. I think it’s something NATO has to look at.”

As Europe’s biggest natural gas consumer, Germany relies on Russia for roughly half of its gas imports, which account for 20 percent of its current energy mix, according to London-based Marex Spectron group. The International Energy Association projects German natural gas demand to increase by 1 percent in the next five years, as Berlin continues phasing out its nuclear power plants by 2022.

Expanding upon the existing Nord Stream 1 pipeline, which has been transporting gas from Russia to Germany along the same Baltic Sea route since 2011, Nord Stream 2, currently slated for completion by 2019, would roughly double Russia’s export volume.

Trump says the $11 billion, 800-mile pipeline expansion linking Russia and Germany would give Moscow greater geopolitical leverage over Europe at a time of heightened international tensions, an opinion in keeping with that of his his immediate predecessor, former President Barack Obama, and former President George W. Bush, who opposed Nord Stream 1.

The administrations have long pushed for Germany, Europe’s largest energy consumer, to buy American liquefied natural gas (LNG) in an attempt to overtake a sector of the market long dominated by Russian distribution routes that run through Ukraine.

Poland and Lithuania, who are among Nord Stream 2’s most vociferous European critics, have built LNG terminals that would stand to profit from an American takeover of the market. But other former Soviet satellite nations — such as Ukraine, Latvia and Estonia — have long warned that a growing reliance on Russian energy not only compromises European security, but rewards Russia’s 2014 annexation of Crimea and other campaigns to destabilize the European Union.

There have been numerous price disputes between Moscow and Kyiv over natural gas deliveries to Ukraine, whose pipelines serve other European nations. In 2009, a disagreement between the two nations cut natural gas supplies to Western Europe in the middle of winter, leaving many without heat.

Nord Stream 2, they argue, will not only deprive land-transit countries such as Poland and Ukraine of billions in annual transit fees, it will also give Russia a way to penalize Eastern European foes without sacrificing lucrative deals further to the west.

According to Atlantic Council energy expert Agnia Grigas, Nord Stream 2 contradicts the EU’s official energy security strategy, which calls on EU nations to diversify energy sources, distributors and routes.

“If Nord Stream 2 is built, Germany would be the EU country most exposed to dubious Russian influence,” Grigas recently reported. “Moscow already has a track record of relying on German businesses and lawmakers to advance its own strategic goals. For instance, following Russia’s invasion of Crimea in 2014, large German companies with considerable business ties with Russia were among the harshest critics of Western sanctions against Moscow.”

As a private project backed by energy giants such as Shell — a British-Dutch multinational — Germany’s Wintershall and Uniper, along with Russia’s state-owned Gazprom, Nord Stream 2 is also being financed by private firms from Austria, France and Britain, but not by German tax funds.

In responding to Trump’s Wednesday tirade against Berlin, German Chancellor Angela Merkel said she knew all too well from her childhood in the East what it is like to live under Soviet control. But she said energy deals with Russia do not make 21st-century Berlin beholden to Moscow.

“I am very happy that today we are united in freedom as the Federal Republic of Germany. Because of that, we can say that we can make our independent policies and make independent decisions,” she said.

Merkel’s predecessor, Gerhard Schroeder, a longtime friend of Putin, has championed the Nord Stream enterprise since just before being voted out of office in 2005. He soon went on to lead the shareholder committee of Nord Stream AG, a consortium for construction and operation of the submarine pipeline, eventually going on to become chairman of the Kremlin-controlled Rosneft, Russia’s largest oil company.

In March, European politicians increased calls for sanctions against the ex-chancellor for representing Russian interests, though his name has yet to appear on any lists of individuals targeted for sanctions.

Despite repeated U.S. warnings that companies involved in the deal also risk being slapped with sanctions, Nord Stream 2 is scheduled for completion next year.

This story originated in VOA’s Russian service. 
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