Richard Grenell and Nord Stream 2: that's why the US ambassadors are fighting the pipeline

The concern of the US leadership for the security of the European Union may depend a little on the shape of the day. Recently, US President Donald Trump has found the thrust of France to form a new "very offensive" European army.

However, when it comes to the Nord Stream 2 pipeline, White House officials are unaware that they are worried about the cohesion of the EU. The project undermines "the security of Ukraine and Europe", US Ambassador Richard Grenell complains in a letter to the companies involved in the project. The letter made news because the companies understood it the way they meant: a threat.

Last Sunday, the ambassador posted on Twitter: he retweeted a European Parliament resolution against the pipeline. "A strengthened Europe benefits us all," wrote Grenell. A few months ago, the European institutions of Grenell were not so popular. In Europe, you decide a "political class before the election, who wins this and who is running," said the ambassador in an interview to the far-right portal "Breitbart", whose strippers Steve Bannon once he said on the European capital Brussels, she was the "heart" the globalist "through which he wanted to" aim ".

The resistance against Nord Stream 2 is not the strangling of Trump and his colleague, but of the bipartisan consensus in the United States. Also the European commissioner for energy, Maros Sefcovic, was against the project, many members of Eastern Europe of the EU.

Why is the project so controversial in politics and among many experts – and how could it happen that the federal government is now largely isolated in the application? The overview:

1. Does Germany make the pipeline too dependent on Russia?

Russia's share of gas imports in Germany has recently been about 34%, with the commissioning of the latter, around 1300 kilometers long of the Nord Stream, this share would increase over the medium term by more than 50%.

"All studies show, however, that the fear of problematic dependence on Russia is exaggerated," says Stefan Meister, a Russian expert at the German Foreign Relations Council (DGAP). The reason for this is that in recent years several ports have been created in Europe with terminals for liquefied gas tankers (LNG). If Russia suddenly ceased to supply gas – or only at exorbitant prices – large oil companies like Qatar, Algeria or the United States could soon be docked at the terminals.

The underlying logic illustrates the plant in Klaipeda in Lithuania: the use of the local terminal has been reported previously, although sometimes less than 20%. The government still considers the project quite gratifying: a ministry analysis concludes that the terminal is giving the country "a lever on the price of gas". In other words, as Lithuania has created the opportunity for an alternative gas supply with the LNG terminal, Russia Gazprom tends to keep the price lower.

"In the short term, from the point of view of economic policy, Nord Stream 2 would probably have positive effects for Germany", says Georg Zachmann, energy expert at the European think tank Bruegel. Germany would become the central hub for gas from Norway, the Netherlands and Russia. "The competition will take place here, we will basically lower prices and guarantee a high level of security," says Zachmann.

2. Why does the United States exert so much pressure on Germany?

The United States itself claims to be guided by concerns about the energy dependency of Europe and on the stability of Ukraine. However, this is not the only reason: US producers of liquefied petroleum gas have announced their intention to become the largest LNG supplier in Europe by 2025. Charlie Riedl, president of the Association of Exporters , recently declared to the "FAZ" that the goal is "at least 50%" of the market.

The background to this is the fact that the US government has allowed the export of natural gas – and gradually builds the capabilities for shipping LNG. However, for oil tankers, the gas must be cooled to minus 192 degrees and liquefied, a complex process that tends to make LNG more expensive than the pipeline gas.

In Berlin's government circles, therefore, the suspect is loved, the United States has also targeted sanctions on Nord Stream 2, in order to move a competing project from the European gas market. For example, the corresponding CAATSA Act – which established the basis for US pipeline sanctions – under Section 257 ("Ukrainian energy security") states that the approach to Nord Stream is also "to export US energy resources" Prioritize the creation of American jobs, help US allies and partners, and strengthen US foreign policy. " Therefore, Josef Braml, US expert of the DGAP, comes to a drastic conclusion: "Trump wants to blackmail Germany and Europe in order to buy more LNG".

3. What can the United States do against the line?

Since 2017, US sanctions have been discussed in the future. In principle, this represents a significant risk for any global company, since most transactions are settled in dollars, US financial sanctions can paralyze almost all transactions. In Germany, for example, the Uniper and Wintershall companies could be involved, each of which invests 950 million euros in the construction of the gas pipeline.

However, the US authorities are also targeting two specialized companies whose expertise is needed to transfer the pipeline to the Baltic Sea: the Italian company Saipem and Allseas, a company based in Switzerland with headquarters in Switzerland.

However, according to reports, Saipem has largely completed the work. For example, oil pipelines in the area of ​​technically demanding shallow waters off the German coast have apparently already been transferred, and the section off Russia could, if necessary, be taken over by a Russian company.

The pipeline operator states that 70 percent of the pipe parts are already covered in concrete and ready for installation. The first gas is expected to be pumped through Nord Stream 2 by the end of the year. In the United States, in turn, the US Congress should launch a sanctions law in the spring. It could be a race.

4. Germany wants the energy transition: do we really need gas?

The first Nord Stream pipe has a capacity of 55 billion cubic meters, with the Nord Stream 2 which doubles to 110 billion cubic meters. To classify: Germany has consumed about 90 billion cubic meters in the year last year, but also draws significant amounts of gas from Norway and the Netherlands.

However, in the next few years, natural gas production in Norway will decrease. In the Netherlands, earthquakes caused by cavities in the ground are causing problems for producers, for example near Groningen. Furthermore, – in any case modest – gas production in Germany has been declining for some years. The European Commission's forecasts therefore assume that the EU demand for imported gas will increase by 2040.

Even the former environment minister Jürgen Trittin of the Greens blames the federal government for this: if these should be taken seriously into account by the energy transition and, for example, rehabilitating old buildings that consume energy, Germany could save "so much gas every year by 2030 while we are currently importing from Russia".

5. Ukraine is losing vital transit costs through management?

For decades, Ukraine has been the main transit corridor for natural gas by Russian funding agencies in the west. After the disintegration of the Soviet Union, this gave the country a winning card against its powerful neighbor, Russia: for a long time over 100 billion cubic meters of gas were pumped from Russia through the Ukraine to the west.

Finally, it was only about 60 billion cubic meters, yet Ukraine admitted between two and three billion dollars in transit fees in the year, equivalent to more than two percent of the country's economic output. However, in the past, a significant part of Ukrainian gas revenue from Russia ended up in private pockets and black boxes, not in the state budget. However, little has been invested in the rehabilitation of pipelines: Ukrainian pipelines are reported to be hit 14 times more frequently than other pipelines today.

Meanwhile Ukraine itself has significantly reduced its dependence on Russian gas. Instead of much more than 40 billion cubic meters as it was a few years ago, the country has recently bought only about 15 billion cubic meters – and not from Gazprom, but in the European market: European intermediaries sell on paper the gas supplied by the Russia Ukraine.

The supporters of Nord Stream 2 refer to this practice to demonstrate: Ukraine could be provided in the event of an emergency via the west, through "reverse flow", that is a sort of inversion of thrust in the pipelines.

The energy expert Zachmann believes that this topic is incomplete. Russia can be expected to use the two strands of Nord Stream 2 in order to keep prices in western Europe low with favorable pipeline gases and to overcome the most expensive liquefied natural gas LNG suppliers. But if Russia stops supplying Eastern Europe at the same time, "there may be a bottleneck: consumption in the region is 154 billion cubic meters, while the pipeline capacity is only 110 billion cubic meters ". However, these risks could be mitigated "at some costs," Zachmann said: the EU should expand the capacity for a possible supply of the east from the west.

6. Germany requires a transit guarantee for Ukraine: can it help you?

If the Kremlin is able to completely eliminate Ukraine as a transit country in the future – for example through Nord Stream and almost completed TurkStream management – the Russian expert Stefan Meister sees the danger of further military escalation of the conflict with Russia.

From the military annexation of Crimea in 2014, the leadership in Moscow has struggled to supply the peninsula. Therefore, in recent years it has repeatedly been hypothesized that the Kremlin could try to conquer a land connection from the Donbass in the eastern Ukraine to the Black Sea. "Until the Kremlin relies on Ukraine as a transit corridor for the 39, Europe, Kiev has a bargaining chip to stop Russia, "says Meister, a DGAP expert.

This is one of the reasons why the Federal Minister of Economics, Peter Altmaier, has announced that he intends to ensure that Moscow will continue to transport minimum quantities of gas through Ukraine in the future. Chancellor Angela Merkel (CDU) also calls from Moscow "clarity on how to proceed with the role of Ukrainian transit".

Russian President Vladimir Putin has already replied: in the meantime, he talks about wanting to keep transit through Ukraine. The question is how credible would such a commitment of the Kremlin be – after Putin never tired of praising the benefits of a complete evasion of Ukraine as a transit country for almost a decade. Putin once solemnly declared that Russia had "recognized the current borders of today's Ukraine" and that the Crimea, now occupied, was "no controversial territory". It was 2008 in the Tagesthemen.

7. Has the federal government made mistakes?

Foreign Minister Heiko Maas (SPD) says he can no longer stop wondering. When talking about Nord Stream 2, the wind is now beating on his face, in talks with Eastern European neighbors and "in NATO", and also at the UN General Assembly must "feel that in Germany seems to us to be on the La Maas told the New Year's reception of the Eastern Committee of the German economy last week, but there is nothing to be done.

So all the other ghost riders: only Germany is on the right track? "Behind the US position there are transparent economic interests", says the experienced master of Russia. However, Germany still had to wonder how she would like to continue doing so. The dispute has not long been maintained with rational arguments, but it has been "so charged now that it has damaged Germany's reputation in the EU," Master said.

Meanwhile, Germany is in the eyes of many neighboring countries as a bad boy there. It is quite possible that this may once again take revenge and that the neighbors of the EU block German interests, warns Meister: "Chancellor Merkel has failed with its principle to ignore the problem as far as possible."