Lawmakers Rightfully Wary of Growing Russian Influence & Nord Stream 2
A bipartisan coalition of U.S. Senators has pulled back the curtain on Russia’s quiet march to expand its regional influence by way of energy infrastructure. More, and welcome, legislation is under consideration in an effort to halt Russia’s Nord Stream 2 natural gas pipeline project through sanctions against the Russians and auxiliary companies supporting its completion. If completed, the Nord Stream 2 project will serve as a geopolitical weapon to expand Russia’s influence in Western Europe and undermine American national security efforts with key allies.
Introduced by Texas Senator Ted Cruz, the Protecting Europe’s Energy Security Clarification Act aims to keep Russian Prime Minister Vladimir Putin from being able to circumvent active sanctions against the project. This latest bill is an expansion of measures passed in the 2020 National Defense Authorization Act that co-sponsor Senator Jeanne Shaheen described as ensuring “Russia does not surreptitiously extend its malign influence throughout Europe,” and protecting the Ukraine, Europe’s energy independence, and American allies from Russian exploitation.
The Nord Stream 2 project is a sister pipeline to Nord Stream 1 and is designed to move billions of cubic feet of Russian produced shale gas to a German offtake for use across Western Europe. Officially registered with Nord Stream AG, incorporated in Switzerland, there is little doubt that Nord Stream 1 and 2 are intended to disproportionately support Russian interests. Gazprom, the Russian state owned and operated energy services entity, is the majority shareholder in Nord Stream AG.
This battle between American sanctions and Russian expansion is truly analogous to differences in free market and top down, state-driven approaches to energy development. And added efforts by policymakers to halt the completion of the project are worthwhile despite pushback from German leadership.
Russia relies heavily on energy industries to support its economy at large with oil and gas operations making up 40% of fiscal revenues and nearly a fifth of the country’s gross domestic product. For American interests, there is obvious value in hamstringing the cash flow stemming from their energy influence.
Already the 2020 Russian budget faces a $39 billion deficit because of lower revenues from oil and gas. Nord Stream 2 is a long–term play to lock in decades of buyers in Western Europe, increasing our allies’ reliance on energy supplied by an unpredictable and often aggressive regime.
This isn’t just about Nord Stream 2. American policymakers should also consider commonsense solutions outside of legislation. Further unlocking American domestic energy can support our European allies with reliable energy while bettering our own energy industry – all while limiting Russia’s influence.
A first step can come by encouraging the Federal Energy Regulatory Commission to review the six outstanding applications for export terminals in the Gulf of Mexico. Added export capacity would give confidence to industry members contemplating new development projects and push the country closer to greater freedom and flexibility with energy exports.
To double down on the benefit of added export terminals, a second look must be given to Senators Rubio and Scott’s calls for a ban on offshore leasing and drilling activity. Technological advances have proven offshore operations to be safe and free from interfering with coastal tourism.
Data from the Energy Information Administration show federal offshore reserves (Gulf of Mexico) of nearly 600 million barrels and another 400 million offshore of Alaska. These reserves are valuable and geopolitically important. Had access to these reserves been available six months ago, the United States may have been able to better insulate itself from the Saudi / Russian price war. Or, these reserves could counter Nord Stream 2 by offering European allies an affordable and sustained stream of energy as part of larger trade agreements.
The United States is in a global leadership position when it comes to energy. To sustain that role, attention must be given to improving domestic energy strength and reiterating to allies that we are capable and eager to support them. Allowing Russia to complete and operationalize the Nord Stream 2 pipeline forfeits strategic advantages critical to the United States and its allies.
James “Spider” Marks is a retired U.S. Army major general and strategic advisor to the GAIN Coalition — Grow America’s Infrastructure Now.