Deep Dive

The Russian Pipeline That Turned Into a Lightning Rod

How Nord Stream 2 made everyone in Washington mad at one another.

nord-stream-2-biden-merkel-putin-germany-russia-foreign-policy-illustration
Foreign Policy Illustration/Getty Images

In 2015, Russian energy giant Gazprom announced plans to build a second pipeline that would double the amount of Russian natural gas pumped into Germany. Now, six years later, U.S.-Ukraine relations are strained, U.S. lawmakers are fuming at U.S. President Joe Biden as well as at one another, Eastern Europeans are mad at Germany, and the U.S. State Department can’t get its ambassadors to Mexico, Algeria, or Cameroon confirmed—all thanks to the pipeline project. 

The furor peaked this week as news reports emerged that the Biden administration was about to unveil a deal with Germany intended to shield Eastern European allies from future Russian efforts to use the pipeline as a geopolitical weapon, including threats to cut off gas supplies to Ukraine. 

Ukraine and Poland batted down the deal almost immediately after it was released, and now, the Biden administration is taking flak from lawmakers on both sides of the aisle.

In 2015, Russian energy giant Gazprom announced plans to build a second pipeline that would double the amount of Russian natural gas pumped into Germany. Now, six years later, U.S.-Ukraine relations are strained, U.S. lawmakers are fuming at U.S. President Joe Biden as well as at one another, Eastern Europeans are mad at Germany, and the U.S. State Department can’t get its ambassadors to Mexico, Algeria, or Cameroon confirmed—all thanks to the pipeline project. 

The furor peaked this week as news reports emerged that the Biden administration was about to unveil a deal with Germany intended to shield Eastern European allies from future Russian efforts to use the pipeline as a geopolitical weapon, including threats to cut off gas supplies to Ukraine. 

Ukraine and Poland batted down the deal almost immediately after it was released, and now, the Biden administration is taking flak from lawmakers on both sides of the aisle.

Depending on who you ask (there’s a whole thicket of lobbyists, administration officials, diplomats, congressional staffers, and their bosses deeply involved in this), the deal Biden struck is a devastating blow to Europe’s energy security, a savvy diplomatic fix to salvage relations with Berlin, a dangerous appeasement of the Kremlin and betrayal of Ukraine, or an unpalatable agreement that Europe can nonetheless find a way to live with in the long run.

No matter what, the issue devolved into a political lightning rod in Washington, and Biden’s post-Trump-era honeymoon period with some Eastern European allies has come to a screeching halt. 

The story of how a couple of pipes that run under the Baltic Sea assumed totemic importance is also a story about foreign-policy challenges on both sides of the Atlantic Ocean, from energy security, to climate change, to a revanchist Russia and the long shadow former U.S. President Donald Trump cast over transatlantic relations. Foreign Policy spoke to 18 U.S. officials, European diplomats, and experts for this story, all of whom voiced deep frustration at the situation. 

As one U.S. State Department official said, “It’s just so disappointing and unfortunate how this turned out.”

As a congressional aide put it, “It’s just a total dumpster fire.” 

Wolfgang Ischinger, a former top German diplomat and one of the country’s biggest voices on foreign policy, was only slightly less damning. He called the situation an “unprecedented low point in German Ostpolitik [or Eastern policy] since 1990.”


Russian President Vladimir Putin and Rex Tillerson, then-chairman and CEO of Exxon Mobil, attend a signing ceremony for an Arctic oil exploration deal between Exxon and Rosneft in Sochi, Russia, on Aug. 30, 2011.

Russian President Vladimir Putin and then-chairperson and CEO of ExxonMobil Rex Tillerson attend a signing ceremony for an Arctic oil exploration deal between ExxonMobil and Rosneft in Sochi, Russia, on Aug. 30, 2011. Sasha Mordovets/Getty Images

Realpolitik and the “Tillerson Amendment”

Nord Stream 2 was first announced in 2015 as Western countries were ratcheting up sanctions on Russia over its annexation of Ukraine’s Crimean peninsula and Moscow’s military and financial backing of separatist rebels waging a war in the Donbass. Although the German government has repeatedly described the pipeline as a commercial project, Ukrainian officials see it as an existential threat because it eases Moscow’s reliance on Ukraine to ship gas to lucrative European markets. This, in turn, could deprive Kyiv of billions of dollars in transit revenue and remove any incentive for Russia not to meddle with Ukraine further. “We’re not exaggerating when we say it’s a real security problem for Ukraine,” Yuriy Vitrenko, CEO of Naftogaz, the Ukrainian state oil and gas giant, told Foreign Policy

Worried it would strengthen Moscow’s leverage over Europe, successive U.S. administrations have opposed the pipeline’s construction. But although Trump warned the project would make Germany “captive to Russia,” U.S. Secretary of State Rex Tillerson, the former CEO of ExxonMobil, issued guidance that exempted the project from sanctions measures passed by Congress in 2017. 

“What you’re looking at there is realpolitik,” said Kevin Book, managing director of the energy consultancy firm ClearView Energy Partners. Book said Tillerson’s guidance came from recognition that nothing short of devastating sanctions on European companies would kill the project. “There are definitely tools which are in the tool chest, but they cut more towards the trunk than towards the branch,” Book said. As the Trump administration began to ratchet up pressure on the project, the “Tillerson amendment,” as it became known, was lifted by his successor Mike Pompeo last summer. 

During the Trump era, with the president making warm overtures to Russian President Vladimir Putin even amid the investigation into how Russia interfered in the U.S. elections, Nord Stream 2 policy became a political port in the storm for Republican lawmakers. By opposing Nord Stream 2, they could show their party was tough on Russia without diverging from Trump—and all along sidestep the politically sensitive matter of Moscow’s election interference. 

Meanwhile, although Trump, himself, appeared to strike up a rapport with Putin, the rest of his administration took a hawkish approach to Russia. As early as 2018, Trump administration diplomats were privately vowing to their Ukrainian counterparts they would do everything they could to sink the Nord Stream 2 project. 

At the same time, U.S.-German relations took a turn for the worse. Trump chided German Chancellor Angela Merkel for not contributing enough to Europe’s security through NATO and repeatedly bashed Germany over its continued support for Nord Stream 2. 

Democrats and Republicans—as eager to show some form of bipartisanship in the bitterly divided Trump era as they were to curb the Kremlin’s energy power plays in Europe—united to pass punishing mandatory sanctions on the project in December 2019. Those sanctions against the entities and Russian vessels constructing the pipeline effectively halted the project in its tracks, with less than 100 miles of construction left of the 760-mile pipeline.


German Chancellor Angela Merkel and U.S. President Joe Biden take the stage for a joint news conference in the East Room of the White House in Washington on July 15.

German Chancellor Angela Merkel and U.S. President Joe Biden take the stage for a joint news conference in the East Room of the White House in Washington on July 15.Chip Somodevilla/Getty Images

The Biden Administration’s “Tactical Mistake”

Construction on Nord Stream 2 picked up again in December 2020 as the project found new ways around the sanctions. 

When Biden took office in January, he was faced with a pipeline nearing completion and battered relations with Germany and Ukraine—all while revving up efforts to address the growing challenge of China. In May, the administration opted not to levy sanctions against the company behind the project and its CEO, Matthias Warnig, a German citizen and former agent of the East German secret police. This decision was made in a bid to create some room for talks with Germany, both to salvage battered relations with Berlin in the post-Trump era and to push Germany to address the security concerns of Eastern Europeans.

Another driving factor was the Biden administration concluded sanctions alone couldn’t stop the project. “Nord Stream is 99 percent finished,” Biden said on Thursday. “The idea that anything that was going to be said or done was going to stop it was not possible.”

This is an opinion Republican lawmakers and at least some officials inside the U.S. State Department do not share, according to multiple State Department officials and congressional aides. Republicans point out the project was also near completion in December 2019, when sanctions were imposed, halting construction. So more sanctions could have a similar impact, even if the pipeline is at 99 percent completion. 

Meanwhile, Biden administration officials privately fumed about how one single pipeline project was effectively sucking the oxygen out of their bilateral relationships with Berlin and Kyiv and, by extension, eclipsing the rest of Biden’s messaging on his Europe agenda. 

All this back and forth culminated in the deal announced this week.

Under the terms of the agreement, the United States will drop the threat of further sanctions on the project, and both countries—the United States and Germany—will pledge to impose costs on Russia if it seeks to harm Ukraine or other European countries with its energy policies. Germany will push to extend a Russian-Ukrainian gas transit agreement for 10 years and contribute $175 million to a new green fund for Ukraine to improve its energy independence with renewables. 

The move sparked outrage in Washington and across Eastern Europe.

The Ukrainian and Polish governments were incensed, Republicans accused Biden of handing a victory to Putin, and many of Biden’s Democratic allies also criticized the deal, although in more diplomatic terms than their Republican counterparts.

Two State Department officials and two congressional aides, who spoke on condition of anonymity to discuss internal deliberations, said the agreement has caused deep rifts between the ranks of the State Department, where some diplomats privately opposed the U.S.-German deal, and the National Security Council (NSC), which took the lead in coordinating it. (Another senior administration official denies this, however, insisting there is no bad blood between the State Department and NSC.)

Daniel Fried, who served as assistant secretary of state during the George W. Bush administration, said he thought the decision to waive sanctions to create space for diplomacy was defensible but was also problematic. “I think the Biden administration made a tactical mistake waiving the sanctions before they had solid enough assurances from the Germans,” Fried said. “The second tactical mistake they made was not consulting with the Ukrainians and the Poles early enough.”


Environmental activists hold up a poster reading "Clog pipelines" as they sit in a tube on the construction site for the European Gas Pipeline Link, which will connect to Nord Stream 2, in Wrangelsburg, northeastern Germany, on May 16, 2019.

Environmental activists hold up a poster reading “clog pipelines as they sit in a tube on the construction site for the European Gas Pipeline Link, which will connect to Nord Stream 2, in Wrangelsburg, Germany, on May 16, 2019. Stefan Sauer/DPA/AFP via Getty Images

Caught in the Crossfire

One Republican lawmaker who opposes the pipeline reacted to Biden’s policy with more than just sharp words, leading to a punishing new standoff for the administration with the State Department caught in the middle.

Republican Sen. Ted Cruz issued a blanket hold on all of Biden’s nominations for senior State Department posts until Biden reversed course on his Nord Stream 2 policy. The move puts more than two dozen nominees in limbo, potentially leaving the department bereft of many key senior managers for months on end. Among the nominations caught in the crossfire: the ambassador nominees to Mexico, Algeria, Cameroon, and Vietnam as well as nominees for top posts in Washington like the undersecretary of state for energy and environment issues and the assistant secretaries of state for Africa, East Asia, the Western Hemisphere, South and Central Asia, diplomatic security, intelligence and research, international law enforcement, political-military affairs, and consular affairs.

This blanket hold will likely cause a bottleneck among more pending nominees, creating a logjam that could ultimately take more than a year to resolve.

One State Department official, speaking on condition of anonymity, called Cruz’s move “totally unprecedented” and said it will throw a wrench into the day-to-day conduct of U.S. foreign policy.

“There is no other time when a senator held all of the [State] Department’s nominees, including all of the career [foreign service officers] with no set timeline and no real offramp,” the official said.

Other Republican lawmakers on the Senate Foreign Relations Committee are quietly angered by Cruz’s hardball tactics, according to one Republican Senate aide, but aren’t voicing their grievances publicly. In any case, Cruz isn’t budging. “I look forward to lifting the holds just as soon as they impose the sanctions on Nord Stream 2 that are required by federal law,” he told CNN.

Cruz’s office did not respond to a request for comment.


The ‘Least Bad Option’?

Although Biden’s victory in the 2020 elections came as a welcome relief to officials in Kyiv, who saw their country dragged into pitched partisan battles during Trump’s first impeachment, these hopes were soon tempered by the U.S. decision earlier this year to waive some Nord Stream 2 sanctions.

Ukrainian President Volodymyr Zelensky told Axios in an interview in June that he first learned about the decision in the press and was “surprised” and “disappointed” by the move. He said he urged Biden to meet with him before the Geneva summit with Putin. The White House pushed back, saying it had notified the Ukrainian ambassador in Washington and senior officials in Kyiv of the decision. 

Behind the scenes, several congressional and administration sources said the administration has become increasingly frustrated with Ukrainian officials airing their grievances to the press regarding delicate diplomatic discussions.

“They basically told the Ukrainians that if they engage Congress or if they talk to journalists, the White House will cancel the Zelensky visit,” a second congressional source said, speaking on condition of anonymity.

One senior administration official vehemently denied these characterizations of their private discussions with Ukraine, first reported by Politico

One of these senior administration officials told Foreign Policy the Biden administration had more than a dozen engagements with Ukraine over the past two months as the deal with Germany was being hashed out. “In doing so, we have shared details and ideas that remained deliberative and sensitive, which is why—as we always do in the conduct of our diplomacy—we preferred to keep those consultations private,” the official said. “We look forward to continuing those discussions with Ukraine on Nord Stream 2 and many other issues when President Zelensky visits the White House.”

Publicly, administration officials are characterizing the current deal as the least bad option available. “This is a bad situation and a bad pipeline, but we need to help protect Ukraine, and I feel that we have made some significant steps in that direction with this agreement,” Victoria Nuland, undersecretary of state for political affairs, said at a Senate Foreign Relations Committee hearing on Wednesday. 

That same day, the White House announced that Zelensky would visit on Aug. 30, later than the July meeting that was initially anticipated. (A second senior administration official said Zelensky was invited to come in the summer, but they had not indicated a specific month when the invite was extended.) On Thursday, the chairs of the bipartisan congressional Ukraine caucus expressed their “deep disappointment” and accused the administration of holding the meeting when Congress, where Ukraine has many vocal allies, is not in session. 

Zelensky could still have a chance to make his case to members of the House of Representatives during the recess. The House Armed Services Committee will be marking up its version of the Defense Department’s authorization bill a week before the end of the August recess, giving the Ukrainian leader a chance to interact on Capitol Hill with Republicans and Democrats angered by Biden’s decision.


Ukrainian President Volodymyr Zelensky and the German Chancellor (not pictured) give statements ahead of talks at the Chancellery in Berlin on July 12.

Ukrainian President Volodymyr Zelensky and the German chancellor (not pictured) give statements ahead of talks at the German Chancellery in Berlin on July 12.Stefanie Loos/Pool/AFP via Getty Images

“The Ukrainians Are Pissed”

The U.S. State Department dispatched its counselor, Derek Chollet, to Kyiv and Warsaw this week ahead of the deal’s rollout with Germany. But any hopes the administration may have had about resolving its differences with allies in Eastern Europe over the pipeline were quickly dashed. “Unfortunately, the hitherto proposals to cover the resulting security deficit cannot be considered sufficient to effectively limit the threats created by NS2,” the Ukrainian and Polish foreign ministers said in a joint statement on Thursday. Zelensky said in a tweet he would have a “frank” and “vibrant” discussion with Biden about the threat posed by the pipeline during his August visit.

Skepticism that Russians would abide by the terms of any deal is shared across Eastern Europe. “I will never believe a deal with Russia or any agreement, that they will really obey any kind of agreement to continue to transit gas through Ukraine,” Kaimo Kuusk, Estonia’s ambassador to Ukraine, told Foreign Policy. Kuusk said Russia could surreptitiously interrupt gas transits to Ukraine to ramp up pressure on Kyiv, regardless of any deal it agreed to on paper with Berlin.

Still, some veteran diplomats are urging Ukraine to dial back public criticism of Biden.

“The Biden administration needs to understand that the Ukrainians are pissed, but the Ukrainians have to understand that the administration is really acting in good faith,” said Fried, the former assistant secretary of state. 

Maria Shagina, a postdoctoral fellow at the University of Zurich who studies energy and economic sanctions, said Ukraine had outsized expectations of the Biden administration regarding its willingness to use any and all means to halt the project. “The position in Ukraine is very black and white,” she said, and Ukrainian officials may have painted themselves into a corner in the process. “It will be very difficult to sell any deal to the population.”

Other experts said the merits of the deal won’t fully emerge until it is tested the next time Russia seeks to wield its energy dominance as a cudgel. “The real value of this deal will take time to play out,” said Brian O’Toole, a former senior sanctions official in the Obama administration. 

Although the Kremlin is likely relishing the political infighting in Washington and Europe this week, O’Toole said the deal represents an important step in repairing the U.S-German relationship. “Moscow loves the uproar and likes the idea of completing the project, but Putin misses out on completing the project and fracturing the relationship,” O’Toole said. 

Amy Mackinnon is a national security and intelligence reporter at Foreign Policy. Twitter: @ak_mack

Robbie Gramer is a diplomacy and national security reporter at Foreign Policy. Twitter: @RobbieGramer

Jack Detsch is Foreign Policy’s Pentagon and national security reporter. Twitter: @JackDetsch

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