The Biden White House has reportedly decided to effectively drop efforts to block the nearly-completed Nord Stream 2 pipeline supplying Russian natural gas directly to Germany, according to a new report, despite vows from top administration officials to prevent the pipeline’s completion.
The administration has decided that it will waive sanctions for the corporate entity Nord Stream AG building the pipeline, despite growing complaints from Capitol Hill and from many of Germany’s European neighbors that the pipeline is politically and economically unwise.
The news website Axios, citing unnamed sources, reported Tuesday that the U.S. will not pursue sanctions against Nord Stream AG’s CEO Matthias Warnig. Critics, including both the Trump and Biden administrations, have warned the nearly completed pipeline will give the Kremlin too much leverage over Western energy supplies and undermine Ukraine’s status as the key transit route for Russian oil and natural gas being sold in Europe.
Both Secretary of State Antony Blinken and Deputy Secretary of State Wendy Sherman pledged to fight the project in their confirmation hearings earlier this year. “I will do everything I possibly can to ensure that Nord Stream 2 does not go forward,” Ms. Sherman told a Senate Foreign Relations Committee hearing in March.
But German Chancellor Angela Merkel’s government has been determined to complete the project, and U.S. officials expressed growing fears that U.S. sanctions would anger Berlin without stopping the nearly-complete project from going forward.
The geopolitics surrounding Nord Stream 2 have long been vexing, as Germany has faced internal debates over the value of the pipeline to ease the energy needs of its own people as well as other populations across Western Europe.
U.S. lawmakers in late 2020 ordered the White House to deliver an assessment to Congress on companies involved in Nord Stream that may be subject to sanctions. While the legislation set in motion the process for authorizing the president to level sanctions against Russian and German firms, it does not explicitly mandate such sanctions.
Tuesday’s report by Axios said the administration will acknowledge that Nord Stream AG and Mr. Warnig are engaged in sanctionable activity, but will waive the application of those sanctions citing U.S. national interests.
The State Department did not comment directly on the report. A spokesman traveling with Secretary of State Antony Blinken in Iceland said the secretary had talked Tuesday with German Foreign Minister Heiko Maas on Nord Stream 2 and other topics.
Mr. Blinken “underscored the U.S. commitment to work with allies and partners to counter Russian efforts to undermine our collective security, and in that vein, emphasized U.S. opposition to the Nord Stream 2 pipeline,” the statement said.
Construction work halted for nearly a full year in December 2019 when the Trump administration was considering whether to apply new sanctions on the construction firms, but resumed again in December 2020. The pipeline is said to be about 95% completed.
Word of the possible sanctions waiver provoked a sharp reaction from some on Capitol Hill, where there has been strong pressure on the administration to find a way to kill the project altogether.
“Two months ago, President Biden called [Russian President Vladimir] Putin a ‘killer,’ but today he’s planning to give Putin, his regime, and his cronies massive strategic leverage in Europe,” Sen. Ben Sasse, Nebraska Republican, said in a statement. “You can’t pretend to be a Russia hawk but then just roll over. … Allowing the completion of the Nord Stream 2 pipeline would be a strategic mistake and the administration should rethink this.”
• David R. Sands contributed to this report.
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