Topline
If Russian troops enter Ukraine, the United States will “bring an end to” Nord Stream 2, the $11 billion underwater natural gas pipeline connecting Russia to Germany, President Joe Biden announced Monday, shortly after U.S. officials warned Russia has amassed 70% of the military presence it needs to launch a full-scale invasion of Ukraine.
Construction work on the Eugal cas pipeline near Damerow, Germany. The Eugal gas pipeline would … [+]
Key Facts
If tanks or troops cross the Ukraine border, “there will be no longer a Nord Stream 2,” Biden told reporters, confirming statements made by administration officials since January.
Though the U.S. has no direct authority to cancel the activation of Nord Stream 2, which terminates in Germany, the U.S. and Germany are working in “lockstep” to respond to the Ukraine crisis, Biden said during a meeting Monday with German Chancellor Olaf Scholz.
The Biden Administration announced in January it was seeking out suppliers in the Middle East, North Africa, Asia and the U.S. to sell petroleum to the European Union, which relies on Russia for about 34% of its natural gas and about 27% of its crude oil.
Russian officials continue to dismiss U.S. warnings of a possible invasion as “madness and scaremongering.”
Key Background
The U.S. has threatened Russian President Vladimir Putin’s “inner circle” with severe economic sanctions if Russia invades Ukraine, which some U.S. officials worry might take place within days. Russia could retaliate to sanctions from the United States’ European allies by withholding its fuel exports to Western markets. However, the cancellation of Nord Stream 2 would deprive Russia of tens of billions of dollars in revenue. Russia relies on fuel for 36% of its national budget, and has sought to strengthen its trade ties to China, which is Russia’s top export market after the EU. Limiting oil and natural gas exports would make the Russian economy, with its “one-dimensional” reliance on fuel, far less resilient, senior Biden Administration officials said.
Tangent
Construction on Nord Stream 2 wrapped up last year, but German regulators still haven’t authorized it to open. The U.S. has long opposed the Nord Stream 2 project on the grounds that it could increase Russian influence in Europe. Last month, Senate Democrats rejected a bill sponsored by Sen. Ted Cruz (R-Texas) that would have severely sanctioned some people and companies involved in building the pipeline. The bill was also supported by the government of Ukraine, which earns billions of dollars annually by transmitting gas through over-land pipelines that Nord Stream 2 will bypass.
Further Reading
“Anticipating Russian Fuel Cutoff, White House Looks To Africa, Asia For Backup Sources” (Forbes)
Source: https://www.forbes.com/sites/zacharysmith/2022/02/07/biden-vows-nord-stream-2-pipeline-will-be-canceled-if-russia-invades-ukraine/