Thursday, August 8, 2024

161 - January 2022 - Biden flip-flops, Blinken proclaims that Nord Stream 2 pipeline is ‘leverage’ for Europe against Russia


Anthony Blinken (left) and Sergei Lavrov met in Reykjavik, May 2021


The biggest geopolitical game of the 21st century was on.

In January and February 2022, the idea that the Nord Stream 2 pipeline could serve as "leverage" for Europe against Russia emerged amid escalating tensions over Ukraine and broader geopolitical maneuvering. This period marked a critical juncture as Russia amassed troops near Ukraine's border, prompting Western leaders to reassess their strategic options, including energy dependencies tied to Russia. Nord Stream 2, a nearly completed gas pipeline from Russia to Germany, became a focal point in this debate, shifting from a symbol of economic cooperation to a potential tool of political pressure.

The notion gained traction in early January 2022 when U.S. Secretary of State Antony Blinken, during a visit to Berlin on January 5, framed the pipeline’s dormant status as an advantage for Europe. Speaking alongside German Foreign Minister Annalena Baerbock, Blinken argued that since Nord Stream 2 was not yet operational—lacking regulatory approval and gas flow—it could be wielded as a bargaining chip. He suggested that if Russia escalated aggression toward Ukraine, Europe could withhold certification, effectively denying Russia the economic benefits of the pipeline. Blinken’s remarks flipped the narrative: rather than Russia using gas exports to pressure Europe, the pipeline’s suspension could deter Moscow, given its $11 billion investment and reliance on energy revenues.


This perspective built on earlier discussions, such as Wolfgang Ischinger’s January 5 CNBC interview, where the former German ambassador called Nord Stream 2 a "major item of leverage" for the West. Ischinger emphasized Russia’s economic stake—tens of billions in potential losses if the project were abandoned—suggesting Europe could exploit this vulnerability if Russia’s military posture intensified. His comments reflected a growing consensus that the pipeline’s fate could influence Russia’s calculations, especially as gas prices soared and Europe faced an energy crunch exacerbated by reduced Russian supplies.

By late January, with Russia’s troop buildup intensifying, the leverage idea solidified. On January 25, Al Jazeera reported German Chancellor Olaf Scholz hinting at consequences for Nord Stream 2 if Russia invaded Ukraine, a shift from his earlier reluctance to politicize the project. Scholz’s remarks at a NATO press conference—“there will be a high cost”—signaled Germany’s willingness to use the pipeline as a sanction tool, aligning with U.S. pressure and coalition partner Baerbock’s skepticism about its approval. This stance was reinforced when, on February 7, U.S. President Joe Biden, standing with Scholz in Washington, vowed to "bring an end" to Nord Stream 2 if Russia invaded, cementing the pipeline’s role as a deterrent.

The culmination came on February 22, 2022, when Scholz suspended Nord Stream 2’s certification process after Russia recognized the Donetsk and Luhansk breakaway regions, just days before its full-scale invasion of Ukraine on February 24. This move, prompted by Putin’s actions, turned the leverage concept into action. Scholz’s decision—halting a key economic link—demonstrated Europe’s readiness to sacrifice energy ties to punish Russia, validating the earlier rhetoric from Blinken and others. The pipeline, once a lifeline for Russian gas, became a stalled asset, its fate tied to Russia’s behavior.

DATA:

1 Jan 2022 - Russian president Putin said that "Nord Stream 2 link ready to calm gas prices"

4 Jan 2022 - "Nord Stream 2 go-ahead could come in mid-2022" - Uniper CEO

5 Jan 2022 - Blinken: Nord Stream 2 pipeline is ‘leverage’ for Europe against Russia

“This pipeline does not have gas flowing through it at present and if Russia renews its aggression toward Ukraine, it would certainly be difficult to see gas flowing through it in the future,” Blinken said. “So some may see Nord Stream Two as leverage that Russia can use against Europe. In fact, it’s leverage for Europe to use against Russia.”

Germany views the pipeline as an opportunity to diversify gas imports to Europe, but came to an agreement with the Biden administration in July that Berlin would impose costs on Russia if it weaponized Nord Stream 2, or committed aggressive acts against Ukraine.

Blinken and Baerbock said they both reaffirmed commitments to the July agreement in their bilateral meeting.

The agreement that was reached in July followed President Biden waiving sanctions on the pipeline’s project company Nord Stream 2 AG, a subsidiary of the Russian-owned company Gazprom.

6 Jan 2022 a poll was released: "A majority of Germans are in favor of the Russian Baltic Sea pipeline Nord Stream 2 starting operations."

9 Jan 2022 - The Secretary General of Germany's ruling party urged not to mix Nord Stream 2 with politics

13 Jan 2022 - Germany's foreign minister wants to keep Nord Stream II out of the Ukraine conflict

German Defense Minister Christine Lambrecht warns against confusing the disagreement over the Nord Stream 2 gas pipeline with the conflict over Ukraine.

13 Jan 2022 - Senate Rejects Nord Stream 2 Sanctions Bill

White House opposes proposal by GOP Sen. Ted Cruz, backs other bill  

14 Jan 2022 - On 55-43 basis, bipartisan majority of US Senate today voted to sanction #NordStream2 AG, 100% owned by Russian state-controlled Gazprom, to deter further Russian invasion of Ukraine. 

18 Jan 2022 - Scholz: Germany will discuss Nord Stream 2 penalties if Russia attacks Ukraine

19 Jan 2022 - The Bundestag said that opposition to Nord Stream 2 threatens the EU's energy security

The project was and will remain primarily economic and energy, noted Steffen Kotre, member of the Bundestag Committee on Energy and Climate Affairs

"Different parties are trying, based on different motives, to mix together the importance of Europe's energy supply with geopolitical interests. This project was and will remain primarily economic and energy. Using it as a tool to achieve other political goals is wrong and jeopardizes Europe's energy supply,"

20 Jan 2022 - Blinken on Nord Stream 2 ahead of his meeting with Scholz tonight: 

"Nord Stream 2 is leverage for Germany, the United States and our allies"

26 Jan 2022 - Ukraine crisis: UK 'not optimistic' Russian invasion can be stopped

UK Defence Secretary Ben Wallace is in Europe to build momentum for sanctions against Russia and support for Ukraine amid fears of another invasion.

Wallace met the new German Defence Minister Christine Lambrecht

One defence source said Mr Wallace hoped to put "some lead in their pencil".

He's still hopeful that the Germans will support tough economic sanctions.

He sees the Nord Stream 2 pipeline, built to supply gas from Russia, as one of the key bargaining chips in any sanctions package. Germany gets around 40% of its gas supplies from Russia.

Under pressure from the US, the UK and Poland the new German government has now agreed to at least consider keeping the taps of the Nord Stream 2 pipeline closed - if President Putin uses military force against Ukraine. Ben Wallace said "Nord Stream 2 is a genuine piece of leverage which we should use for the greater benefit of all allies in Europe". 

27 Jan 2022 - Under Secretary Nuland Comments on Nord Stream 2

Under Secretary Victoria Nuland: “If Russia invades Ukraine, one way or another, Nord Stream 2 will not move forward.”

30 Jan 2022 - German regulator expects decision on Nord Stream 2 operator’s certification after June

30 Jan 2022 - U.S. State Department spokesperson Ned Price said on Wednesday the Nord Stream 2 pipeline between Russia and Germany will not move forward if Russia invades Ukraine.

"I want to be very clear: if Russia invades Ukraine one way or another, Nord Stream 2 will not move forward," Price told NPR. "I'm not going to get into the specifics. We will work with Germany to ensure it does not move forward." 

31 Jan 2022 - Liz Truss: I had a discussion with my colleague Foreign Minister Baerbock

...last week about precisely this issue, and I welcome the statements from her and Chancellor Scholz about Nord Stream 2, in which they were very clear that it will not go ahead in the event of a Russian incursion. We do need to reduce dependence on Russian gas. I welcome the work that the United States is doing to look at how supplies can be augmented, and we are working with partners across the middle east. This is a strategic issue for Europe and we do need to reduce dependence on Russian gas—there is no doubt about it.

I have been very clear about our position on Nord Stream 2. More broadly, we need to reduce dependence on Russian gas. On the discussions taking place in various formats, we cannot have a situation in which Russian aggression is rewarded in any way. It has no auspices over Ukrainian sovereignty and territorial integrity, and we are very clear on that. What we are working on, and what tomorrow’s meeting of Foreign Ministers is about, is making sure that we are co-ordinating our positions across NATO, and we are very clear on those red line 


CONCLUSION:

  • THE USA HAS NOT PLANNED PHYSICALLY KNOCK OUT NORDSTREAM 2

  • THE USA WAS WORKING OUT A DEAL WITH GERMANY ABOUT NON-CERTIFICATION FOR USING THAT AS A LEVERAGE AGAINST RUSSIA

  • THERE WAS NEVER AN ISSUE WITH NORDSTREAM 1, WHICH WAS NEVER EVEN SANCTIONED



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