The Russia/Iran/DPRK sanctions bill, passed overwhelmingly by Congress this past July and sent to the White House for President Trump’s grudging approval, represents a significant escalation in Ukraine-related sanctions on Russia. Provisions in the legislation raise the possibility of U.S. sanctions being imposed on companies that partner with Russia in projects to build pipelines for energy exports. It is widely understood that the U.S. bill is specifically intended to undermine the project of five major European companies and Russia’s Gazprom to build the Nord Stream 2 gas pipeline between Russia and Germany.
I cannot definitively assess how the U.S. bill might affect a variety of Russia-related gas pipeline projects currently in the works or on the drawing board; presumably a small army of European corporate lawyers is parsing the bill’s language for indications even as I write. However, if the legislation succeeds in killing the Nord Stream 2 project, then the bill should be hailed as one of the most beneficial sanctions measures in history.
Opponents of Nord Stream 2 claim that it would inadvisably increase European dependence on Russian natural gas, making Europe more vulnerable to hydrocarbon blackmail. Opponents of the U.S. sanctions legislation point to language in the bill about increasing U.S. energy exports and creating American jobs, arguing that Washington is engaging in a blatant commercial grab—a compulsory displacement of Russian natural gas by American LNG—under the sanctimonious pretext of penalizing Russian geopolitical misbehavior.
Both of these allegations are mistaken, and miss the real rationale for either building or blocking Nord Stream 2.
The construction of Nord Stream 2 would not increase the amount of Russian gas flowing to European markets. Industry-watchers have pointed out that, in fact, the existing pipeline infrastructure operates below full capacity. Moreover, additional capacity could be added much more cheaply by upgrading the existing gas-transit system rather than building a new, underwater pipeline. There is no backlog of Russian gas searching for European markets, nor is there any pent-up European demand waiting to be satisfied by additional imports from Russia. There is no major infrastructural bottleneck constraining Russian gas sales to Europe and impelling the construction of Nord Stream 2. To the extent that hydrocarbon vulnerability is calculated in terms of Russia’s share of the European gas market, Nord Stream 2 would not increase that dependency by one iota.
Likewise, the failure to build Nord Stream 2 would not, in and of itself, decrease by one cubic meter the amount of gas that Russia sells to Europe, nor would it increase U.S. exports. The U.S. sanctions do not in any way restrict the amount of gas flowing through the existing pipeline infrastructure, which, as we have seen, could even support additional Russian exports. Moreover, even if Washington wanted to displace Russian natural gas with American LNG, both a) the volume of American gas available for export and b) the existing liquefaction/regasification infrastructure in the United States and Europe would be woefully inadequate to the task. The allegation that the new sanctions are simply a cover for American commercial imperialism is therefore bogus. Frankly, the language in the legislation about promoting American exports and jobs, far from being a serious statement of intent, strikes me as political puffery intended for a domestic U.S. audience. Creating American jobs is the flavor of the month in U.S. politics, and a plausible (or, in this case, even implausible) claim in this regard gives any policy added cachet.1
The fact is that the Nord Stream 2 project has little real commercial justification for Gazprom, which is prepared to spend billions of dollars to build essentially redundant pipeline capacity. The reason is not to increase Russian gas exports to Europe, but to divert those exports away from the current pipeline system transiting Ukraine.
The purpose is not business but geopolitics. The Russian economy and state budget rely heavily on the sale of natural gas to Europe. With the current pipeline infrastructure, a large portion of that gas must transit Ukraine. That dependence on Ukrainian transit creates a very serious problem for Moscow.
Putin’s great geopolitical endeavor has been to restore what most Russians regard as their proper place among the world’s great powers—an independent pole in the emerging multipolar world, respected by all and beholden to no one. The two flagship projects in this endeavor are the Eurasian Union and the more amorphous “Russian world,” both of which aim to weld the former Soviet space (and any other countries that can be induced to sign on) into a Moscow-led bloc that would increase Russia’s geopolitical heft and presumably provide some benefit to the other members as well. Despite Ukraine’s centrality to these projects, Kyiv’s interest in them has always been tepid, even under the ostensibly pro-Russian presidency of Viktor Yanukovych. As the Russian analyst Arkadiy Moshes put it some years ago, Ukraine has made clear that it seeks to integrate with Europe and cooperate with Russia, not vice versa.
However, quite apart from institutional arrangements for post-Soviet integration, Ukraine occupies a very special place in the Russian imagination. In pre-revolutionary Russia, Ukraine was known as Malorossiya (“Little Russia,” a term that most modern Ukrainians consider condescending), and Ukrainians were viewed simply as Russians with some regional peculiarities, and speaking an ungrammatical peasant dialect of the Russian language. In the Soviet period, notwithstanding famine and repressions, Ukrainians at least had official recognition as a discrete nationality. Curiously, post-Soviet Russia has seen a considerable reversion back to the Tsarist perception of Ukraine—not only among politically marginal nationalist groups, but even on the part of mainstream politicians and analysts. Putin has expressed his opinion of Ukraine as an artificial state comprised principally of lands “taken” from Russia, and has repeatedly assessed Russians and Ukrainians as “really” one people. In so doing, he is assuredly not advancing a theory that Russians are crypto-Ukrainians. Rather, it is the Ukrainian, not the Russian, identity and language that are expected to be subsumed and essentially disappear.
Russians have resurrected the pre-revolutionary concept of ukrainstvo (roughly, “Ukrainian-ness”) as a pejorative term for the scandalous and impermissible attempt (abetted, of course, by Russia’s enemies) to divide the Russian ethnos by the artificial creation of a separate Ukrainian identity. The actual beliefs and preferences of Ukraine’s inhabitants are irrelevant to the matter as far as Russian chauvinists are concerned. For them, ukrainstvo is not a manifestation of national consciousness; it is at best a condition akin to a psychiatric disorder and at worst a virulent infection to be eradicated as quickly as possible lest it spread.
Indicative is the July 18 proclamation by Aleksandr Zakharchenko*, de facto leader of the separatist Donetsk Republic, regarding the creation of “Malorossiya,” a new state entity designed to drive the “fascist junta” from Kyiv, reunite the country formerly known as Ukraine, and restore it to its proper place within the Russian world. Raising the 17th-century flag of the great Cossack leader Bohdan Khmelnytskyi, the erstwhile Donbas separatists of Novorossiya now aspire to become the liberators of Kyiv and even Lviv, and the administrators of a post-Ukraine entity subordinate to Moscow.
Although official Moscow has publicly distanced itself from Zakharchenko’s trial balloon, the Malorossiya scheme does fit nicely into the Kremlin’s playbook. Do pesky, legalistic outsiders insist on the restoration of Ukraine’s territorial integrity? Fine, we’ll satisfy that demand—but on the condition of turning the entire country into “Little Russia”—in every possible sense of the term. Malorossiya thus becomes a useful alternative to the floundering Novorossiya project. The two schemes are complementary rather than mutually exclusive: If Novorossiya embodies the effort to destroy Ukraine by smashing it into pieces, Malorossiya is an attempt to dispense with Ukraine by swallowing it whole. The standard of Khmelnytskyi now joins the banner of Novorossiya as a false flag under which Moscow can conduct its grim campaign against ukrainstvo.
What does all of this have to do with Nord Stream 2?
Moscow’s toolbox for bringing pressure to bear on Kyiv, including in the principled long-term struggle against ukrainstvo, has been cruelly limited by Russia’s reliance on Ukrainian transit for gas sales to Europe. In the event of hostilities, the Ukrainians could shut down transit for Russian gas exports precisely at the moment when Moscow would most need the revenues. Even a complete Russian conquest of Ukraine would not solve the problem; the Ukrainians, with their impressive historical experience of partisan warfare, could probably contrive to disrupt the pipeline system more or less indefinitely. Moreover, the potential for disruption of Russian gas supplies gives Europeans a strong incentive to work for prevention, rather than mere mitigation, of a wider Russo-Ukrainian conflict.
The existing gas-transit system gives both Russia and Europe a vested interest in Ukraine’s stability. The building of Nord Stream 2 and the diversion of Russian gas would not guarantee the outbreak of a wider Russo-Ukrainian war, but it would lower the bar for such a conflict considerably, both by freeing Moscow’s hand and by decreasing Europe’s motivation to oppose Russian military action. At the very least, Nord Stream 2 would further Moscow’s designs by depriving Ukraine of desperately needed revenues.
Moreover, Nord Stream 2 would work at cross-purposes with the EU’s ostensible policy of stabilizing and mentoring Ukraine. It would make no sense for Europeans to provide millions of dollars of financial and technical support to Ukraine while siphoning off billions of dollars in Ukrainian transit fees. It would be pointless for European diplomats to toil over the Donbas peace process while their corporations and politicians are joining forces to remove the single biggest impediment to the unleashing of a full-scale war across Ukraine.
There is a delicious irony in European proponents of Nord Stream 2 decrying Washington’s selfish high-handedness. These same Europeans have summarily dismissed urgent objections to Nord Stream 2 by the Central Europeans, whose security interests would be imperiled by the project. It is tempting to suppose that the Central Europeans even played a part, however minor, in generating the U.S. sanctions. Perhaps Transatlantic cooperation is not dead after all!
Those who imagine that the U.S. sanctions will push Europe into the arms of Russia should think again. Since a sizeable contingent of EU members has opposed Nord Stream 2 all along, any attempt to craft EU-wide retaliatory measures would be contentious and divisive not only (or even principally) between the United States and Europe, but within the European Union itself. Disgruntled proponents of Nord Stream 2 would be well advised simply to allow the Americans to play their traditional role as the bad cop. As the Germans, Austrians et al. pull the plug on this misbegotten project, it would be both face-saving and psychologically rewarding to blame crude American pressure rather than to admit that the Central Europeans were actually right all along about the substance of the matter.
In the best of all possible worlds, Russia would pump as much gas as Europe wants through the existing gas-pipeline infrastructure. Europe would be warm, Russia would be rich, and Ukraine would be secure. The disruption to this agreeable arrangement comes not from some Ukrainian lurch into fascism, nor from unwarranted Western infringement on some sacrosanct Russian zone of privileged interests. The root problem is Russian unwillingness to accept Ukrainian statehood, or even to tolerate the concept of a Ukrainian national identity, and Moscow’s consequent long-term efforts to bring maximum pressure– including military—to bear on Kyiv. The construction of Nord Stream 2 would send an unmistakable signal of European complicity with Moscow’s policy, conveying the message that the priest and the Levite on the road to Jericho could be relied upon to avert their eyes at the appropriate time.
Russia’s existential struggle against ukrainstvo is likely to be one of the defining features of European security for the next generation. Massive Russian expenditures on commercially unnecessary pipeline infrastructure, as well as the ongoing construction of Russian military bases on Ukraine’s border, testify to that reality. European interest in the Nord Stream 2 pipeline deal, unfortunately, exemplifies a mentality that vaguely acknowledges this fact but can’t be bothered when it comes to thinking through all the consequences. It recognizes that turmoil is likely to occur along the eastern fringes of Europe, and seeks to insulate Western Europe by ensuring that the resulting instability doesn’t disrupt the flow of Russian gas. Though the eastern marches of the continent may burn, Western Europeans must be spared collateral damage.
Although it is a well-intentioned attempt to shelter European gas consumers from disruptions in supply, the Nord Stream 2 project actually threatens instead to ignite a conflagration that would quickly overwhelm any feeble firewall the EU might try to erect. One can easily imagine a scenario ten years hence in which European diplomats are working feverishly on the text of a Minsk 12 Agreement, squeezing the Ukrainian government hard for a package of concessions robust enough to induce Russian-backed forces to withdraw from their bridgeheads on the right bank of the Dnieper River near Kyiv. The “Malorossiya Air Force” maintains a high ops tempo of devastating sorties using aircraft, including state-of-the-art MiG-35s, Su-30s and Su-34s all supposedly “captured from Ukraine,” and flown by volunteer pilots on holiday from the Russian Air Force. Meanwhile, international relief agencies record the three millionth Ukrainian refugee arriving on EU soil, with fifty-kilometer queues of desperate people still backed up at every EU-Ukrainian border crossing. Between their frantic calls for Washington to “do something,” European leaders might reflect, belatedly, on their shortsighted pipeline decisions of yesteryear. Unfortunately, at that point, pious European efforts to salvage something for Ukraine from the unfolding catastrophe would constitute the moral and practical equivalent of throwing their thirty pieces of Russian silver back into the Temple.
On the bright side, thanks to Nord Stream 2, at least the Europeans could purchase as much Russian gas as they needed to keep all those Ukrainian refugees warm during the winter.
*Correction: An earlier version of this article misidentified the de facto leader of the Donetsk Republic.
1That said, at the margins, the availability of American LNG for export does exercise downward pressure on gas prices and helps undermine the traditional Gazprom business model of high contractual prices and often onerous conditions, purportedly a reasonable quid pro quo for reliable long-term supply. Moreover, even though American LNG could probably never seriously challenge Russian gas on the European market on the basis of either quantity or price, the gradual expansion of LNG facilities represents one element of a European “Plan B” in the event of a disruption, for whatever reason, of Russian supplies. However, none of this has anything to do with Nord Stream 2.