How One European Pipeline Is Derailing Biden’s ‘America Is Back’ Promise

The Biden era was supposed to be different. The new team arrived in office aboard a raft of promises to repair America’s alliances after the battering they took through the four years of Donald Trump. “America is back. America is back. Diplomacy is back at the center of our foreign policy,” the president declared in his first foreign policy speech on Feb. 4. “We will repair our alliances and engage with the world once again, not to meet yesterday’s challenges, but today’s and tomorrow’s.”

Those remarks won Biden enormous credit with governments around the world. Yet well before it reaches the iconic 100-day mark, the new administration is being driven by Congress into action that could turn the relaunch of the U.S. as the leader of a network of global alliances into a home harbor shipwreck.

The issue is the Nord Stream 2 gas pipeline, which is slated to bring up to 55 billion cubic meters a year of natural gas from Russia to Germany and is within a few months of completion. A bipartisan coalition in Congress aims to thwart what it views as Russian President Vladimir Putin’s drive to acquire political leverage over Europe by hooking it on Russian gas. Now, lawmakers are pressuring the Biden administration to implement the sanctions they already passed.

Killing the pipeline, however, would not just set back the Russians: It would consign an $11 billion international infrastructure project involving some of Europe’s biggest firms to an expensive and watery grave. For German politicians and business leaders who prayed for a Biden victory in the November elections — and, in some of the highest offices in the land, literally wept with joy during the new president’s inaugural address — the conflict over the pipeline has sparked fears that while Trump may be gone, America will remain a heedless and hostile partner. Referring to the rumors of impending sanctions on Nord Stream 2 and such other Biden initiatives as the Buy American executive order, Klaus Dieter Frankenberger of the Frankfurter Allgemeine Zeitung wondered last month if Biden would turn out to be “Trump light.”

Biden himself has said that the pipeline is “a bad deal for Europe” but is reportedly reluctant to move forward with sanctions that would affect a critical ally. In the face of Congressional demands for maximal action that will kill the pipeline — an outcome that may not even be possible — senior aides are searching for a measure that would get Congress off the boil without causing a breach with Berlin.

If no middle position can be found, and the administration capitulates to Congress, one senior Berlin official worries, the result may be “a major portion of the CDU/CSU [the allied Christian Democrats and Bavarian Christian Social Union] turning against the U.S.” Germany’s center-right coalition has held the chancellery for all but 20 of the postwar German republic’s 72 years in existence. Such a breach with what has arguably been the most consistently pro-American party in Europe, the official adds, “hasn’t happened in the history of this republic.” The insult to Chancellor Angela Merkel, whom Trump singled out for particularly offensive treatment and who is now coming to the end of her 16-year tenure, would be unforgettable.

The concerns of America’s strongest ally in Europe are clearly not on the mind of Republican Sen. Ted Cruz. The Texas Republican is holding up the confirmation of William Burns to be director of the CIA, and Wendy Sherman and Brian McKeon to be the two deputy secretaries of State — and hinting he will put more holds on other nominations — unless the administration takes aggressive action to stop a pipeline that he argues has “catastrophic implications for American national security.” Democratic Sen. Jeanne Shaheen, an architect of the 2019 sanctions legislation that was supposed to prod the Executive Branch to take action against the pipeline, has also called for the “administration [to] act expeditiously to stop the remaining section of the pipeline.” Forty Republican senators have signed a letter to the White House and a Democratic letter is reportedly also in the works.

Congress has hated the pipeline since it was first contemplated a decade ago as an expansion of the original Nord Stream pipeline, which went into operation in 2011. In 2018, Secretary of State Rex Tillerson announced American opposition to the pipeline shortly before he was fired. Although Congress’ 2019 legislation empowering the White House to target Nord Stream 2 scared off most Western subcontractors who were working on the project, the Trump administration took no significant action against the pipeline until it sanctioned a single Russian ship that was laying pipe on Jan. 19 of this year, Trump’s last full day in office.

On top of the geostrategic concerns, opposition to the project is further fueled by overflowing pent-up demand to hand Russia a well-earned smackdown in response to a long list of Russian offenses: the poisoning and imprisoning of Alexey Navalny, the SolarWinds hack, annexation of Crimea and fighting in eastern Ukraine among others. Democrats still harbor rage against the Russians for their intervention in the 2016 election, while Republicans are seeking to revalidate their anti-Moscow credentials — and jam the new Democratic administration — after biting their tongues through the four years of Trump’s love song to Vladimir Putin.

Faced with this rare cross-aisle determination, the administration is in a bind, hobbled by having only one Senate-confirmed official, Secretary of State Tony Blinken, at Foggy Bottom and stalling for time. Blinken reportedly was surprised by the venom he has encountered in Hill appearances. State Department spokesperson Ned Price sought to reassure Congress that “we are always looking at pipeline activity that would be sanctionable, so if we see activity that meets that threshold we are prepared to follow the law.”

Russia may richly deserve the punitive treatment, but whatever damage a new round of sanctions implementation will inflict on Russia will be relatively minor compared to the harm to the U.S.-German bilateral relationship at a genuinely critical moment. Washington is looking to Europe — with Germany in the lead — to craft complementary policies to manage an emboldened China. On issues like setting standards and regulating the cyber world, only a U.S.-European effort could block Chinese ambitions. Washington also hopes Germany and its EU partners will help stop Chinese efforts to control a range of international agencies and provide a united front on Chinese human rights abuses. Breathing new life into NATO, revitalizing the Iran nuclear deal and, ironically, managing Vladimir Putin are other areas where German support will be essential.

German business leaders nervously hope reason will prevail, and point to the fact, reported in the Financial Times and elsewhere, that Blinken once wrote a book, Ally Versus Ally: America, Europe, and the Siberian Pipeline Crisis, based on his Harvard undergraduate thesis, on the 1980s transatlantic battle over first pipeline that brought Russian gas to Europe. They take uneasy comfort in the knowledge that the secretary of State came down in that earlier case on the side of alliance comity over American imperiousness.

German diplomats say they have confidence in their new counterparts, who are familiar from the Obama administration, and believe that some kind of deal to allow the pipeline to go forward is possible. But they admit that the dynamic between the two ends of Pennsylvania Avenue is a black box for them, and a worrisome one.

There is something supremely ironic about the Nord Stream 2 controversy: Congress is so determined to whack Russia that it is threatening to undermine the very transatlantic alliances that are essential for countering Russia over the long-term. But that is the result of Capitol Hill’s trouble with setting priorities and an ingrained bad habit — specifically, the habit of slapping on sanctions whenever it doesn’t like something. American legislators appear to have forgotten that so-called “secondary” or “extraterritorial” sanctions, which affect not only countries that have done things that are wrong (Russia invading and annexing Crimea) but also countries that have done things within their rights (doing business with Russia), are considered by the rest of the world to be a violation of international law.

In 2016, then Treasury Secretary Jack Lew warned against getting carried away with such sanctions, which “are viewed, even by some of our closest allies as extra-territorial attempts to apply U.S. foreign policy to the rest of the world,” but his admonition for restraint, along with the commentary of many others, seems to have made little mark. Not only our enemies, but our friends view these sanctions as the tool of a bully. As one top German international lawyer put it, “You won’t find a single reputable scholar here or anywhere [outside the U.S.] who thinks secondary sanctions are legal under international law.”

They have, however, become increasingly popular since Congress voted for the Helms-Burton Act targeting Cuba in 1996 by large margins, despite a reluctant Clinton administration. America’s unique place in the world economy and the dollar’s status as the global reserve currency has made these sanctions effective, advantages no other country has. More recently, the secondary sanctions the Trump administration used to damage the Iranian economy have reinforced the attraction for Congress.

Against this backdrop, Germans have been left to wonder about all the rhetoric they heard about a new American diplomacy to accompany the renewed assertion of the centrality of alliances — about a policy that, as Blinken declared, would “balance humility with confidence” or the kind of recognition of the virtues of international cooperation that Burns wrote about in The Atlantic last summer.

Setting aside the narrow issue of whether secondary sanctions are legal tools to use, the Nord Stream 2 issue has frustrated Germans because despite the efforts of Emily Haber, their highly-regarded ambassador in Washington, they feel good arguments are falling on deaf ears.

They have a point: the case that sanctions advocates make is questionable at best. The notion that Putin will ensnare Europe in an energy stranglehold is far-fetched. Europe has been diversifying its energy sources for decades and now receives less than 40 percent of its natural gas from Russia, down from 80 percent in 1990. There is also little evidence that Germany’s substantial Russian gas imports over decades have affected Germany policies toward Russia. Nothing stopped Chancellor Angela Merkel from taking the lead in criticizing Moscow for the poisoning of Navalny, who was flown to Berlin, where he recuperated. (Trump questioned whether the Russian government was behind the poisoning.) Nor can Germany be accused of weakness when it comes to the sanctions related to Russia’s annexation of Crimea or occupation of eastern Ukraine.

In recent years, German natural gas consumption has fluctuated in a small band, and while it may grow as nuclear energy and coal are phased out, that will be offset to a significant degree by the rapid growth in renewable energy. Germany is a global leader in the field with renewables comprising 18 percent of total energy consumption and powering more than 45 percent of electricity generation. Moreover, a completed Nord Stream 2 would likely not mean substantially greater exports of Russian gas to Europe. It would just mean that less gas comes to Europe in pipelines that transit Ukraine, Belarus and Poland. (Concern about diminished gas transit fees have led Ukraine and Poland to be among the vociferous lobbyists for killing Nord Stream 2.)

Against this backdrop and with ample historical experience, the Germans plausibly argue that they will not be in the thrall of the Kremlin. The key dependence, they argue, will run in the other direction, with an economically ramshackle Russia urgently needing euro payments for its gas, a point endorsed by experts such as Eugene Rumer, the former top U.S. intelligence community Russia watcher.

There are ways to achieve a solution with Germany that will avoid a train wreck. Many German politicians — including Greens who hate to see more fossil fuels flowing into the country and policymakers who hate having any business with Russia — think the pipeline was a dumb idea from the start, but relations with the Trump administration were too toxic to sort things out, and the project is now too close to completion to abandon. There is ample room for negotiation.

Former German Ambassador to the U.S. Wolfgang Ischinger has suggested that Germany make the flow of gas conditional on improvements in Russian behavior. Responding to the argument that Russia will divert gas that now transits Ukraine to Nord Stream 2 and starve that country of much-needed transit fees, Steven Pifer, who served as U.S. envoy to Ukraine, argues for insisting on a Russian guarantee that it will continue pumping at least 40 billion cubic meters of gas through Ukraine, as it is now doing, beyond 2024, when the current deal runs out. No doubt there are other possible approaches as well.

What there is no substitute for in global politics is a strengthened transatlantic alliance — historically the most important for American statecraft — and that is something that won’t happen if the strongest country in Europe, Germany, feels dissed.

A narrative has been circulating among the European policy class since well before last November’s election that centers on the belief that Trump was not an outlier on the graph of American foreign policy but a continuation of a trend of downgrading the transatlantic relationship that began during first administration of George W. Bush and continued through Barack Obama’s time in office.

The natural inference from this view is that the phrase “America First” may be gone, but an arch-transactional approach and a willingness to anger long-time allies will be the story going forward. That, together with a fear that even a well-intentioned Biden restoration will be short-lived, and there are future Trump-like presidents in America’s future, feeds German and broader European anxieties. What is the point of backing up a U.S. drive to curb Chinese misbehavior if the U.S. can’t be relied on to treat the transatlantic alliance as a two-way street? The question is one Congress and the Biden administration need to grapple with now.