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Nord Stream sanctions bill seen as lessening leverage with Russia

Cruz struck deal with Schumer to get bill to Senate floor

The Senate is poised to vote on a bill that would essentially force President Biden to impose sanctions over the Nord Stream 2 gas pipeline.
The Senate is poised to vote on a bill that would essentially force President Biden to impose sanctions over the Nord Stream 2 gas pipeline. (Peter Kovalev/TASS/Getty Images)

The Senate is slated to vote soon on a measure that would effectively force President Joe Biden to impose sanctions on German and other businesses that support the finalization of an underwater pipeline that would transport Russian natural gas into Europe.

Senate Majority Leader Charles E. Schumer and Sen. Ted Cruz struck a deal before the chamber’s holiday break to hold a vote no later than Jan. 14 on the Texas Republican’s bill to sanction the Nord Stream 2 pipeline. In exchange, Cruz agreed to cease blocking the unanimous consent process from being used to confirm some three dozen diplomatic and ambassadorial nominees.

While Nord Stream 2-related sanctions have had strong bipartisan support in the past, the calculus has shifted in recent months – particularly for Democrats. The Biden administration and some experts are arguing against using sanctions to doom the pipeline, which they now say serves as important leverage in discouraging Russian President Vladimir Putin from ordering the tens of thousands of troops he’s massed on Ukraine’s border to invade the eastern European country.

“What I worry about with the legislation that Sen. Cruz is talking about is he’s going to take the hostage and shoot it first, and that means it has no influence on the calculations in Russia,” Steven Pifer, a former ambassador to Ukraine and a senior fellow at the Brookings Institution, said in an interview. “It’s fine if you want to punish the Russians, but it’s a really stupid move if you’re trying to prevent a war between Russian and Ukraine. I can understand it’s great to beat your chest on the issue, but if you want to use it as a foreign policy tool, the administration is trying with some success to make this a hostage.”

The bill from Cruz, who last year led a group of conservative lawmakers in voting against Biden’s legitimate Electoral College victory, would mandate asset freezes and travel bans on “any corporate officer of an entity established for or responsible for the planning, construction, or operation of the Nord Stream 2 pipeline.” Those sanctions would go into effect no later than two weeks after bill enactment.

Sixty votes are needed to pass the measure, and the agreement reached with Schumer does not allow for any amendments.

“The Senate will soon have a vote on these sanctions, and the message to Russia and President Putin must be clear: Don’t interfere with the aspirations of Ukraine, and let Ukraine determine its future by the will of its people,” Senate Assistant Minority Leader John Thune, R-S.D., said Tuesday in floor remarks.

While the legislation includes a national security waiver Biden could use to get out of imposing the sanctions, it also includes a provision that would allow Congress to quickly vote to overturn the president’s possible use of the waiver.

Secretary of State Antony Blinken used a similar congressionally provided waiver last spring to get out of imposing otherwise mandated sanctions under a 2019 law on a key business leading the development of the pipeline, Nord Stream 2 AG, and its German CEO, Matthias Warnig. The company is a subsidiary of Russian energy giant Gazprom.

At the time, the Biden administration contended the waiver’s use was justified, as the 1,230-kilometer (764 miles) pipeline’s construction was nearly complete and it was better to work with Berlin on strategies for insulating Ukraine from Russia’s feared efforts to use Nord Stream 2 to leave Kyiv vulnerable to energy blackmail.

‘Difficult to see’

Construction of the pipeline, which would transport Russian natural gas under the Baltic Sea and into Germany and other parts of Europe, has since been completed. But German regulators have indefinitely paused their approval process of the pipeline amid rising alarm in Europe about Putin’s military mobilization along Ukraine’s border.

“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 Wednesday following a meeting at Foggy Bottom with Germany’s new foreign minister, Annalena Baerbock.

“Some may see Nord Stream 2 as leverage that Russia can use against Europe,” he added. “In fact, it’s leverage for Europe to use against Russia.”

Pifer said he expects if Putin does attack Ukraine, then the new German coalition government – viewed as somewhat more willing than its predecessor to put political principles before trade when it comes to Russia – would kill the pipeline or Biden would sanction it to death.

Addressing the press alongside Blinken, Baerbock said her government would support the 2021 U.S.-German agreement “where both countries agreed that there should be effective measures should Russia weaponize energy [against Ukraine]. We do not only fully support this, but also this, of course, applies to the new federal government.”

Baerbock did not specifically address the future of Nord Stream 2.

State Department spokesman Ned Price on Tuesday touted the administration’s efforts to build European agreement around punishing any Russian assault on Ukraine with overwhelming multilateral sanctions.

The spokesman declined to discuss just what sanctions, including any involving Nord Stream 2, were under discussion.

“These are measures that … we intentionally decided not to pursue in 2014 because of the massive effect that they would have on the Russian economy,” Price said, referring to when Russia militarily annexed Ukraine’s Crimean Peninsula.

“We’re not going to negotiate in public,” he added. “I think it is fair to say, however, that the Russians too have a very good idea about what we’re talking about when it comes to the measures that they would face and the massive profound costs that would befall the Russian economy should Moscow pursue this path.”

Deputy Secretary of State Wendy Sherman will lead a U.S. delegation in meetings with Russia on Monday in Geneva that will focus on the situation in Ukraine. There will also be meetings with the NATO-Russia Council and the Organization for Security and Cooperation in Europe.

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