Category Archives: Nord Stream 2

My TRT TV | Biden’s Nord Stream 2 sanction waiver: Merkel’s price for unity before his Putin summit

It was my pleasure to be with Thierry Bros of Sciences Po University, Paris, and Peter Zalmayev, Ukrainian security analyst and executive director of Eurasian Democracy Initative on David Foster’s Roundtable on TRT World, London, broadcast 9 June 2021.

I discussed Biden’s apparent reasoning for waiving Nord Stream 2 sanctions:

First off, the German government of Angela Merkel simply would not cooperate otherwise. Allowing her pet energy project to go forward was the price she had demanded for trans-Atlantic “unity” before Biden’s summit with Putin.

(Aside: My research in Berlin and elsewhere has convinced me that, at no point from the late-Trump administration through Biden’s six months in office, did the German side actually engage in any meaningful “negotiation” or discussions with the US side to seek to find some compromise or to initiate a moratorium on construction. Not until Biden waived sanctions on Nord Stream 2 AG, and decided not to sanction any German firms inolved in construction did Merkel show any real interest in discussions. She emphasized her change of attitude on negotiating with Biden about: “what now are also the necessary commonalities in the relationship with Russia” in comments during a German national broadcast interview immediately following Biden’s sanctions waiver. Until this waiver, she had held up any real discussion of the pressing issues of trans-Atlantic unity-in-general, whcih urgently needed attention.

This, IMHO, again indicates the correctness of my assessment of the depth of the split in US-German relations that has festered since at least the Obama administration. See Nord Stream 2: Berlin-Washington Mutual Intransigence Shows Transatlantic Divide on Russia | My AICGS Analysis October 10, 2020)

Secondly, as the EU and NATO allies all realize, Biden has to have this summit with Putin for a number of reasons. As I indicated on the show, the summit is needed to discuss:

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My EuroNews: Why didn’t Biden sanction Nord Steam 2 AG or German firms? The Biden-Putin Summit. Berlin-Moscow gas-alliance kills US climate partnership.

Here are four issues on the Biden-Blinkin sanctions decision I discussed with EuroNews and other news media in the last few days:

-1- Regarding Biden’s waiving of sanctions on the company Nord Stream 2 AG and its head Matthias Warnig (former Stazi officer)​:

These sanctions would be unlikely to stop NS2​, though it would cause difficulty for the firm and the European oil and gas firms that are partnering with it​.  

I am not surprised, however, in light of the upcoming Biden-Putin summit. It should be noted that​ the Russian side (e.g., their ambassador here in Berlin) has made clear, publicly, that sanctions would kill the Biden-Putin summit — which both sides need on many hot issues​ (see my comments of yesterday, on Iran negotiations, and US necessity to withdraw on-the-ground forces from the Middle East​, and to focus on “Great Power Competition” vs. especially China, and Russia).

-2- As for effect of the new sanctions on the pipeline’s construction, and what options the US has: 

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My Op-Ed | Die Ukraine als „Zentralbank“ für europäische Energie | Ukraine as “Central Bank” for European Energy

The English version is below here | Mein Op-Ed-Artikel wurde am 6. April 2021 im Tagesspiegel Background in Berlin gedruckt.

Die Ukraine als „Zentralbank“ für europäische Energie

Thomas O’Donnell, Hertie School of Governance

Wie kann die Gasdominanz Russlands strategisch eingehegt werden? Der Wissenschaftler Thomas O’Donnell von der Hertie School of Governance prüft in seinem Standpunkt die Möglichkeit, die Ukraine mit ihren großen Gasspeichern zu einer Art „Zentralbank“ für europäische Energie zu machen und sie als Puffer zu nutzen. Zusammen mit weiteren Alternativen zu den Nord-Stream-Pipelines verbessere das die Versorgungssicherheit stark.

Der Chef des ukrainischen Gastransportsystems, Sergiy Makogon, hat vorgeschlagen, dass Europa die Ukraine als flexiblen und strategischen Energieknotenpunkt akzeptiert und dabei die Vorteile ihrer einzigartigen Gastransport- und -speicherinfrastruktur nutzt.

Was dieses Konzept glaubwürdig macht, ist, dass die Ukraine seit 2014, kurz nachdem die Maidan-Revolution und die russische Aggression begannen, ihren Gassektor erfolgreich in diese Richtung umgestaltet hat. Mit Hilfe der EU rüstete die Ukraine rasch die Exportpipelines in die Slowakei, nach Polen, Ungarn und Rumänien um, um Rückflüsse (Reverse-Flow) zu ermöglichen. Das befreite Kiew schnell von der Notwendigkeit, russisches Gas zu kaufen, und stellte sicher, dass ein solcher „Handel“ in Zukunft nicht dazu genutzt werden kann, Moskau zugeneigte Oligarchen zu fördern.

Lesen Sie weiter auf der Tagesspiegel-Backgrond Seite (der erste Zugang pro Monat ist kostenlos; ansonsten gibt es eine Paywall.))

Op-Ed: Ukraine as “Central Bank” of European energy

Dr. Thomas O’Donnell, Hertie School of Governance | Published in: Tagesspiegel Background, Berlin. 6 April 2021

How can Russia’s gas dominance be strategically contained? Dr. Thomas O’Donnell of the Hertie School of Governance, Berlin, examines the possibility of turning Ukraine with its large gas storage facilities into a kind of “central bank” for European energy and using it as a buffer.  Together with other alternatives to the Nord Stream pipelines, this will greatly improve European security of supply.

The CEO of Ukrainian’s gas transmission pipeline system, Mr. Sergiy Makogon, has proposed that Europe embrace Ukraine as a flexible and strategic energy hub, taking advantage of its unique gas-transport and -storage infrastructure.

What makes this concept credible is that Ukraine has been successfully re-shaping its gas sector in this direction since 2014, shortly after its Maidan Revolution and Russia’s aggression began. With EU assistance, Ukraine rapidly retooled export pipelines to Slovakia, Poland, the Czech Republic and Hungary to permit reverse flows. This rapidly freed Kyiv from buying Russian gas and assured this “trade” could not be used in future to cultivate pro-Moscow oligarchs.

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Could Nord Stream 2 be axed? My guest appearance on Roundtable -TRT TV, London

This 10 February half-hour roundtable on TRT Television, London looked at the possibility of Nord Stream 2 being stopped by US sanctions. My thanks to host David Foster for the invite.

Today is 20 February, and I should add that since this was recorded, the Biden-Harris-Blinken administration has surprised Congress by sanctioning significantly fewer ships than it expected to be sanctioned for assisting Gazprom to lay pipe in Danish and German waters.

This White House attempt to generate goodwill with Berlin and with Merkel’s ruling coalition is generating bipartisan objections in Congress. Upcoming posts will analyze this development . Tom O’D. Below is the text from TRT network’s promotion of the show. and guests’ names and affiliations.

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I tell DW TV: Nord Stream 2 is geopolitical. Berlin & Moscow aim to reroute Russia-to-EU gas around “insecure” Ukraine.

My DW Business live, with host Chris Kober, Feb 12,

In this live interview with Deutsche Welle (DW.de) on 12 February, I told host Christoph Kober, that this pipeline is clearly “geopolitical”.

Without Nord Stream 2, Putin can’t significantly escalate his war inside Ukraine; he’d risk his lucrative gas-export business with EU. That’s because, without Nord Stream 2, most of the gas Russia exports to EU countries currently has to arrive via pipelines transiting Ukraine that belong to its finance ministry (the remainder Russia pipes to EU states arrives via Belarus-Poland).

I pointed out that, by invading Ukraine in 2014, Putin created his own worries about his lucrative gas business with the EU. Unfortunately for Ukraine, Germany’s government also frets about this gas, fully 40% of all EU imports, having to pass through Ukraine. And so, Berlin made a “realpolitik” decision in 2015, to assist Russia’s Gazprom to build a huge new a detour pipeline around Ukraine. (I analyzed this policy, in 2017, as a “Neue Neue Ost Politik” and here – i.e., the New New Eastern Politics, a third historical iteration of German elites’ reorientations towards Moscow.)

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The FT quotes my critique on: “German green foundation joins efforts to complete Nord Stream 2”

Baltic Sea Port of Mukran, Mecklenburg-West Pomerania.. Logistic center for building Nord Stream 2 pipeline. – By Klugschnacker – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=15320681

“This is either a conscious Russian disinformation scheme to collect supplies from naive firms, or it’s a really irresponsible move by the foundation,” said Thomas O’Donnell, energy and geopolitics analyst at Hertie School of Governance. (“German green foundation joins efforts to complete Nord Stream 2,” Financial Times, 21 Jan 2020, see here, or PDF here.)

The FT’s Erika Solomon interviewed me about the fake “climate-protection” foundation established by the legislature of the German state of Mecklenburg-West Pomerania (German initials MV).  State officials stated intent is to help Gazprom, the Russian state gas monopoly, overcome US sanctions to finish building the Nord Stream 2 pipeline. Their new foundation is financed with €20 million from Gazprom (sole owner of Nord Stream 2 AG), and €200,000 from the state government.

The strategy is for the foundation to purchase “rare and hard to find” equipment Nord Stream 2 AG will need to finish the pipeline, but which firms cannot sell directly to it because of US sanctions against the project. MV politicians have called their foundation a “clever mechanism” to protect firms from sanctions.  According to the state’s energy minister, Mr. Christian Pegel (SPD), the foundation will be a “type of hardware-store shelf” (“Baumarktregal-Variante“) that then supplies the Gazprom operation. The strategy here is that with the “climate-protection” foundation acting as the middleman, German firms will both not deal directly with Gazprom’s sanctioned Nord Stream 2 project, and the foundation’s purchases will be completed “before the deadline” when sanctions are applied.  

However, there are no such loopholes to be exploited.

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Deutsche Welle News live: Will Nord Stream 2 ever be completed?

15 januqry 2021: The Russia-led Nord Stream 2 consortium on Friday said work to complete the subsea gas pipeline to Germany could go ahead. But will US sanctions prevent that?

DW asked energy system analyst Dr. Thomas O’Donnell.

(My post-interview self-critique: Perhaps less coffee before the next interview 😉

My interviews: Tagesspiegel & Frankfurter Allgemeine (FAZ). Nord Stream 2 won’t avoid US sanctions using a phony “environmental foundation.”

These two interviews critique the new “environmental foundation” founded by a local German state, and paid for 99% by Russia’s Gazrpom, as a self-described “clever loophole” to circumvent US sanctions. The publicly admitted scheme is to have the foundation purchase materials and equipment from the specialty companies able to supply them, and have the foundation later supply these materials directly to Gazprom, enabling Gazprom to finish building the pipeline beneath the Baltic Sea. The foundation” is telling firms this will protect them from being sanctioned for selling directly to Gazprom. However, the US sanctions specifically target “circumvention” of sanctions, and I explain that German firms are ill-advised or naïve to cooperate, risking ruinous sanctions.

  1. Tagesspiegel BackgroundNur Naive verkaufen an die Nord-Stream-2-Stiftung” by Jakob Schlandt, 8 January 2020. [“Only Naive (businesses) will sell to the Nord Stream 2 Foundation” Free registration required)
  2. Frankfurter Allegemine Zeitung (FAZ). “Umstrittene Gas Pipeline: Wird Nord Stream 2 am Freitag weitergebaut? By Katharina Wagner and Niklas Záboji, 13 January.2021.
    • Or, English via Google Translate:

CONTROVERSIAL GAS PIPELINE:Will Nord Stream 2 continue to be built on Friday?

The permit from Denmark has been received and new pipes for Nord Stream 2 could soon be laid. However, it is more questionable than ever whether the American sanctions threats can be circumvented.

The completion of Nord Stream 2 remains uncertain. 94 percent of the Baltic Sea gas pipeline has been laid, but the last few meters are still stuck. After the departure of the Dutch-Swiss laying vessels in December 2019, progress was only brief when 2.6 kilometers were erected a few weeks ago . It was not a breakthrough: the pipeline consists of two parallel strands with a total length of around 2,460 kilometers. 30 kilometers are still missing in German, 120 kilometers in Danish waters.

Theoretically, things could continue this week on Friday for the construction consortium Nord Stream 2 AG, a subsidiary of the Russian state group Gazprom. From January 15th it has a permit from the Danish Maritime Administration, and the Russian ship Fortuna is authorized for the work. But according to reports, only preliminary work is planned.

Use of Russian “letter box companies”?

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My EuroNews #3: US Sanctions killing Nord Stream 2. Yet Berlin persists trying, with Moscow.

My 3rd EuroNews Nord Stream 2 sanctions interview, 6 January 2021 (After 30-seconds intro)

[This post is a dey late due to the violent attack on the US Capitol orchestrated by the outgoing-president and his followers. This assault has been defeated and the election is being certified by Congress. Trump will soon leave and Biden will take office in accordance with the Constitution and laws. T. O’D.]

The EuroNews Morning Show asked me [yesterday 6 January,] again about the Nord Stream 2 pipeline. Two key points made in the earlier interviews were:

  1. That the plans of Nord Stream 2 AG (NS2 AG) to restart pipelaying before the holidays in German waters was a propaganda exercise (viz, “a disinformation campaign”) orchestrated by Moscow and Gazprom to create the impression the pipeline can be finished.
  2. Despite this new pipelaying “bravado”, the pipeline was effectively “dead” because of the US sanctions.

These points were an assessment of the impact of the new sanctions law, which was about to be enacted by the US Congress.  This is the “Clarifications” of the Protecting Europe’s Energy Security Act, or PEESCA, which was enacted December 2021, despite a veto by President Trump. These PEESCA sanctions have been added to the previous PEESCA (December 2002) sanctions and the Countering America’s Adversaries Through Sanctions Act (CAATSA, initially 2017) sanctions against NS2.

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My EuroNews Q&A: All German parties back Nord Stream 2 except Greens; USA says it frees Putin to subvert Ukraine & Belarus

My EuroNews live Morning Show interview today (9 Dec 20) with Rosie Wright:

I explains why the German far-right AfD party, which went to Moscow yesterday to show Lavrov their party’s support for Nord Stream 2, supports the project. The AfD supports it along with all other German parties, from “far-right to far-left, and those in the middle, except the Greens.”

Also, I explain how Europe’s dependence on Russian gas will require decades to escape.

However, what are the strategic objectives of Moscow in building Nord Stream 2? I explain Putin wants to build Nord Steam 2 through the Baltic Sea to Germany as well as to complete the Turk Stream (formerly South Stream) pipeline across the Black Sea and Turkey and on into the Balkans and then into Central Europe, and also west to Italy. The reason for this is so that Gazprom does not have to send Russian gas to Europe via Ukraine and Belarus, countries that are in rebellion against Russian dominance.

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