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Built at a cost of $11 billion, the new Nord Stream 2 pipeline from Russia to Germany is — depending on who you ask — an energy lifeline for German factories or a gift to Russian President Vladimir Putin as he tries to hold the continent hostage with Russian gas. The big question about the future of Nord Stream 2 is: When will it be turned on?
One thing is clear: Less than two weeks into the new German chancellor’s tenure, the pipeline’s fate is the headache Olaf Scholz didn’t need — and one of the biggest early tests of German leadership in a post-Angela Merkel world. Finished in September after five years of construction, the pipeline is ready to roll. But with Russian troops massing at Ukraine’s border, Scholz is under enormous pressure from European allies to use the pipeline as a cudgel against Putin.
As arcane as a European gas pipeline might sound, its diplomatic, political and economic ramifications are vast. The new pipeline stretches along a similar 764-mile route to the already-operational Nord Stream 1 and would double the capacity of Russian gas to Germany — importantly bypassing a grid that runs to the European Union through Ukraine. The gas transit fees that Moscow charges Kyiv are an important source for income. Putin has the option to cut Ukraine off as he pleases, but he can also keep his hands on the gas transit fees that fuel Germany and most of the E.U.
On this side of the Atlantic, Sen. Ted Cruz (R-Tex.) After holding up key Biden administration ambassador confirmations,
. On this side of the Atlantic, Sen. Ted Cruz (R-Texas.) is trying to put the nail in the coffin for the pipeline. After holding up key Biden administration ambassador confirmations, he reached a deal with Senate Majority Leader Charles E. Schumer early Saturday to cease his obstructions in exchange for a January vote on tough new sanctions against Nord Stream 2. He will need 60 votes — meaning all Republicans plus 10 Democrats — which is a high bar in the polarized U.S. Senate.
But pressure is not coming from Cruz alone. Biden’s administration tried to repair strained ties with Germany during Trump’s years by easing its stance on Nord Stream 2. Even so , it doesn’t like the project. As Putin rattles his saber, the White House, as well as a gaggle of vocal E.U. Leaders in Eastern Europe want Scholz’s pledge to end the pipeline in case of Russian aggression.
But for Scholz, the calculation is more complicated. Despite the painful Soviet times, Germans have more pragmatic views of Russia than those in the west. The German public is distrustful of Putin, polls show, but less so than the Americans, British, French, Swedish or Dutch. In addition, the Germans have been generally supportive of the pipeline’s completion.
“I think the unfortunate side effect of American economic sanctions, in the context of the Trump administration, was to make Germans feel defensive and mulish,” Constanze Stelzenmuller, a German expert at the Brookings Institution, told me. “I think there was a sense of being hammered over the head by an American president using a double standard.”
Like Nord Steam 1, the new pipeline had the early backing of a formidable insider: former chancellor Gerhard Schroder. After his defeat by Merkel in 2005, Schroder became Nord Stream’s chairman — as well as an effective Putin lobbyist in Berlin. Merkel, meanwhile, saw the Russian pipelines as a solution to the complex energy needs of Europe’s largest economy, particularly after her 2011 decision to phase out nuclear power in the wake of Japan’s Fukushima disaster.
Pipeline opponents are essentially asking Scholz to wager Germany’s energy future on a diplomatic bet against Putin. Although renewables such as solar and wind have seen a significant increase in their use, they still face limitations. Germany has been working hard to meet its ambitious climate goals, which are forcing it off of coal.
With nuclear off the table, natural gas remains a key German energy source — and one that German manufacturers were banking on for the foreseeable future. European countries are trying to diversify their energy sources by purchasing liquefied natural gases from the United States. But with other natural gas sources in Britain, Holland and Norway finite and poised for longer term declines, Russia seems to be Germany’s most logical source — even if that flies in the face of regional and transatlantic security.
A move by Scholz to mothball Nord Stream 2 “would alienate the German industrial base that thinks of this as a source of energy they were counting on,” Nikos Tsafos, an energy expert with Center for Strategic and International Studies, told me. “But you also lose any pretense of the rule of law, that even if you follow procedure and satisfy German government regulations, you still can’t start it.”
With winter approaching, the Germans have done what their bureaucracy does best: buy time with paperwork. Last week, the German energy regulator announced that a decision on final certification of Nord Stream 2 would not happen until the second half of 2022. The German energy regulator announced last week that final certification of Nord Stream 2 would not be made until the second half of 2022. This will allow them to determine if Russian troops stormed Ukraine’s border or whether tensions have subsided enough for them to reconsider its opening.
Even if he never gets his pipeline, one person may be enjoying the tussle between allies more than anyone else.
“Putin must be in heaven watching this, frankly,” said Judy Dempsey, a senior fellow at Carnegie Europe.