US and Germany strike a deal over Nord Stream 2

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ENERGY & UTILITIES

The US and Germany have struck a deal over the Nord Stream 2 pipeline with Berlin pledging to respond to any attempt by Russia to use energy as a weapon against Ukraine and other parts of Eastern Europe.

The agreement comes a week after a meeting between US President Joe Biden and German Chancellor Angela Merkel after years of tension between the two countries.

Read more: Gas prices at 13-year high in Europe as Russia curbs supply

The pipeline, which is nearing completion, has caused concern for the US who feel it may make the EU and Germany more reliant on Russia for energy, and affect the independence of Ukraine and its Eastern European neighbours.

When complete, the 1230 km (764 mile) Baltic sea pipeline will pump natural gas from Russia to Germany. It is set to be the longest subsea natural gas pipeline in the world.

President Biden has chosen not to go through with his predecessor's policies of strict sanctions against the pipeline, instead favouring a primarily diplomatic angle. He has also chosen not to attempt to kill the pipeline, likely due to it being near completion.

The deal has come from Angela Merkel's visit to the White House to discuss the situation. Merkel is due to step down as Chancellor of Germany following the election in September after nearly 16 years in the role.

Biden waived sanctions on the pipeline back in March in an attempt to mend ties with Germany.

Germany has pledged to impose sanctions on Russia should it attempt to interfere with the sovereignty of any nations the pipeline passes through.

However, US lawmakers and Ukrainian officials have warned Germany's promises may not be enough to protect American allies from energy security concerns stemming from Russia.

Read more: France urges Germany to ditch Nord Stream 2 over Navalny arrest

Potential sanctions include hindering Russia's attempts to export energy to Europe, officials revealed.

Ukraine has revealed it will be seeking talks with the EU over the pipeline. The agreement has also been met with fierce bipartisan opposition in the US and from several political parties in Germany, including the Greens.

A State Department official told reporters on July 21: "Should Russia attempt to use energy as a weapon or commit further aggressive acts against Ukraine, Germany will take action at the national level and press for effective measures at the European level, including sanctions to limit Russian export capabilities to Europe in the energy sector."

The official revealed the US government has been in close contact with Kyiv on the matter.

"We elected not to provide Russia with a road map in terms of how they can evade that commitment to push back," they added. "We also will certainly look to hold any future German governments accountable for the commitments that they have made in this."

Berlin is also setting up a fund to support Ukraine's transition towards green energy, with the US set to aid in investments. Starting at $175 million (€148 million), it will also include $70 million (€59.2 million) to help "improve Ukraine's energy infrastructure security."

Germany will also be extending the Russia-Ukraine gas transit by at least 10 years, which should continue to provide Ukraine with a source of revenue, and therefore security against Russia, for a little longer.

The second pipeline for Nord Stream 2 has yet to be finished. Russian President Vladimir Putin claimed in June that the first line had been completed and "was ready to be filled with gas."

Read more: Nord Stream 2 complete and ready to be filled with gas, says Putin

Ukrainian President Volodymyr Zelenskiy told reporters that he was looking forward to discussing the future of the pipeline with President Biden when the two meet in Washington next month.

Angela Merkel also said that she had spoken with Putin in the hours before the deal was made public, with Nord Stream 2 and Russia-Ukraine transit among the topics discussed.

The latest reports indicate Nord Stream 2 was at around "98% completion".

The EU is still planning on using natural gas as a segway towards its net-zero goals, although phasing it out will be essential in the energy transition.  This has become a contentious topic within German national politics.

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