Yet not only does that ploy look doomed, America’s dogged efforts to kill the pipe are bearing fruit. Congress has passed two sets of sanctions aimed at it. In December 2019 the mere threat forced Allseas, a Swiss undersea construction firm, to pull its vessels from the project, halting construction for a year and costing Gazprom a fortune. Many other international companies have been scared off.
Russian ships eventually restarted work in December. But the heat continues to rise. On January 19th the American government made good on its threats for the first time, slapping sanctions on Fortuna, a Russian vessel repurposed for pipe-laying. A few weeks earlier Congress passed an amendment to a different sanctions law, passed in 2019. By radically expanding the set of companies now exposed to American action to include insurers, certifiers and any entity supporting “pipe-laying activities”, the new law is a “game-changer”, says Mateusz Kubiak of Esperis, a Polish consultancy. Russian assets may eventually be able to finish the pipe-laying, he says. But certification, a technical exercise to show the pipeline meets international safety and design standards, “cannot be simply transferred to some murky Russian company.”
What now? The aggressive sanctions policy of the Trump administration unsettled even stalwart foes of Nord Stream 2 in Europe. Joe Biden is keen to rebuild America’s tattered alliances, but his team also opposes the pipeline. Optimists think the most recent sanctions legislation could offer a way out. The sanctions are mandatory, limiting the White House’s room for manoeuvre. But as Dan Fried, a sanctions co-ordinator at the State Department in the Obama administration, notes, the text also lowers the bar for the president to waive the sanctions. “It’s a hint that Congress wants a deal,” he says. Mr Biden’s team has indicated that it is open to suggestions.
What might a deal look like? One idea is an automatic mechanism to impose sanctions on Gazprom should the Kremlin renege on a deal brokered by Mrs Merkel in 2019 to keep gas flowing across Ukraine. This could form part of a grand bargain in which America drops its sanctions in exchange for German commitments to bolster energy- and other forms of security in eastern Europe. But Germany would need not only to signal interest in such ideas, but to pause support for the pipe. And officials in Berlin fear hardliners in Congress may tie Mr Biden’s hands. The diplomatic stalemate, then, may drag on. Meanwhile, the delicate dance in the Baltic continues. ■
