Tuesday

18th Jun 2019

US yet to push on Nord Stream 2 sanctions

  • 'We would prefer the pipeline not be built at all,' said US deputy assistant secretary for energy diplomacy Sandra Oudkirk (Photo: Nord Stream)

The US would still like to block a planned gas pipeline between Russia and Germany but is not yet pushing for sanctions against companies that would be involved in the project.

"We oppose Nord Stream 2, we would prefer the pipeline not be built at all, US deputy assistant secretary for energy diplomacy Sandra Oudkirk said on Monday (19 March).

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But she insisted that her visit, to Brussels, then in Paris and Copenhagen, should not be seen as a "a sign sanctions will or won't happen."

Denmark passed last year a law to try to block the pipeline going through its territorial waters. But Oudkirk said that whether it would block the pipeline altogether was "a questions for Denmark".

The US Congress last summer passed the Countering America's Adversaries Through Sanctions Act (Caatsa), which president Donald Trump signed on 2 August, and which among other plans sanctions on companies that invest in Russian energy export projects.

"Any company working in the sector of Russian energy export pipelines faces elevated sanctions risk now that they didn't face on 1 August," Oudkirk noted.

She added however that the US did "not talk about pending sanctions announcements, publicly or privately."

Speaking to a group of journalists ahead of meetings with EU officials, Oudkirk said that Nord Stream 2 (NS2) was "geopolitically a bad idea".

She said that the US did not view Russia "as a particularly reliable supplier" and that the pipeline would "build in vulnerability" for Europe.

"It builds in another infrastructure generation of dependence upon Russia as a primary if not sole source of gas for a large number of countries," she argued.

The EU commission is also opposed to the pipeline, saying that it could be against EU rules and that it is a "risky" project.

But it also opposed to potential US sanctions and said last summer that the EU would consider retaliating if concerns over EU companies' interests were ignored.

Different approaches are "not unusual," Oudkirk said, noting that EU and US "legal systems are extremely dissimilar."

"A lot of the times we share the final goals but we follow different paths to get there," she said.

Oudkirk, who took office in January, said she was in Brussels to talk to people and hear EU positions.

While Germany is Nord Stream 2's main EU supporter, she will travel to Berlin later, "perhaps as soon as next month."

But as the former US administration official in charge of sanctions, especially on Russia, she said she already knew many of her interlocutors in the German government.

'Malicious rumour'

Oudkirk pointed at "disinformation on NS2 from Russia" and denied the "malicious rumour" according to which the US would be only opposed to the pipeline project so it can sell gas in Europe.

She argued that since the US administration under president Barack Obama authorised companies to export liquefied natural gas (LNG) to Europe, the government's role "is done".

She insisted that "US energy is sold by companies to companies on a commercial basis. The government is not involved in negotiating these deals."

She noted however that Greece's plan to sign a contract for an LNG import terminal was of interest to the US because it could open a "vertical corridor" to Central Europe.

A week after secretary of state Rex Tillerson was abruptly sacked by Trump, Oudkirk confirmed that the EU-US energy forum, which has not met since Mey 2016, was still blocked.

"We need to have our nominee in place in order to set a date," she said. "Everyone realises we've had a little bit of flux and we need to work our way through that."

Opinion

Nord Stream II aims to undermine Energy Union

The Gazprom pipeline simply does not have any commercial bearing. Rather, it undermines the functioning and effectiveness of the European Energy Union and circumvents Ukraine for gas transits - paving the way for further Russian strong-arming in the region.

Merkel: Nord Stream 2 is 'political'

Germany has for the first time acknowledged concerns on the "political" and "strategic" aspects of Russia's Nord Stream 2 gas pipeline.

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