OPINION: US President Joe Biden’s agreement with Germany that effectively removes any remaining roadblocks to Gazprom’s Nord Stream 2 pipeline looks like a triumph of realpolitik over the administration’s high ideals — and seems to have pleased almost nobody.
Certainly not his usual Republican critics, but more concerning for Biden is grumbling from within the Democratic ranks, which his administration has sought to downplay.
The European Union will be none too pleased, given longstanding opposition to the project and the prospect of Russia having even more potential influence over the European gas market than it does now.
German Chancellor Angela Merkel is no doubt happy to see a long-sought project cleared before she leaves office this September, but the country’s rising Green Party has been steadfast in its opposition to the pipeline.
No one can be more upset than Ukraine, which stands to lose billions of dollars from the transit fees it collects on Russian gas that now traverses the country on its way to Europe. Nord Stream 2 will take gas straight from Russia to Germany via the Baltic Sea, bypassing Ukraine.
Money aside, the country has justifiable concerns that, as a statement from the People’s Deputies of Ukraine put it, the project “creates conditions for Russia's escalation of military aggression against Ukraine”.
The agreement includes compensatory provisions such as a pledge to retaliate if Russia “attempt(s) to use energy as a weapon” and at least $1 billion to help Ukraine transition to cleaner energy.
Germany also vowed to press Moscow to extend transit fee contracts with Ukraine beyond their scheduled expiration in 2024. But it is far from clear how, or if, this and other promises will be fulfilled.
A senior official at the US State Department said the administration was “making the best of a bad hand” it had been dealt, with the pipeline nearly complete when Biden took office.
The US is keen to repair relations with Germany that were frayed over the past four years. Now it will require some deft diplomacy to patch things up with Ukraine.
(This is an Upstream opinion article.)