Coming just after German Chancellor Angela Merkel met President Joe Biden at the White House, U.S. and German officials appear to have reached a draft agreement on the Nord Stream 2 energy pipeline.
In exchange for the United States allowing the pipeline to become operational, Germany has apparently committed to a number of concessions, including showering Ukraine, a key transit corridor taking Russian natural gas to Europe, with hundreds of millions of dollars to assist Kyiv’s green energy efforts. The German government also appears to have pledged to revisit sanctions on Russia if Moscow uses the pipeline to undermine European security.
Perhaps more significant than the actual deal, however, is the fact that Washington and Berlin are now moving past an energy dispute that was highly controversial in both capitals. Ukraine, Poland, and others aren’t happy. It would be a “great pity” if Biden failed to stop the Russian pipeline project, Ukrainian President Volodymyr Zelensky told Axios last June. “There will be a feeling that in these circumstances, Russia will have a great chance to prevail over the United States.”
Ukraine has good reason to want Moscow’s $11 billion energy route shuttered. The new Russian pipeline bypasses Ukraine and delivers natural gas directly to Europe. This would appear to mean Kyiv is losing out on billions of dollars in transit fees.
For the U.S., however, Nord Stream 2 was small potatoes. Unfortunate, to be sure, but hardly the apocalyptic horrorshow the project’s opponents made it out to be. While more Russian gas into Europe will translate into more profits for the Kremlin and indeed more Russian leverage over Ukraine, stopping the pipeline would have required the U.S. to sanction German and European companies. How Biden could have done that on the one hand while beaming about the power of alliances on the other isn’t clear.
When the costs and benefits were analyzed, poking Putin in the eye wasn’t worth souring trans-Atlantic ties or daring an already frustrated Europe to chip away at the U.S. financial system. Ironically enough, killing the pipeline wouldn’t have done Ukraine any favors over the long term either. Yes, Kyiv would still be raking in transit fees as it always has. But what good are these fees if they enable Ukraine’s economic dependence on Russia?
Most lawmakers in Washington will greet the Nord Stream 2 deal between Washington and Berlin with a grimace. With respect to Russian policy, the Beltway operates on a simple formula: What is marginally good for Putin is horribly bad for the U.S. Senior lawmakers on the foreign affairs committees will write sternly worded public letters to the White House asking why caving to the Kremlin is in the U.S. interest.
The deal over the pipeline, though, is less a cave than an overdue admission that allowing the issue to linger is an exercise in wasted energy. And from the Biden administration’s standpoint of alliance management, it would be downright counterproductive.
Daniel DePetris (@DanDePetris) is a contributor to the Washington Examiner’s Beltway Confidential blog. His opinions are his own.
