Trump’s Nord Stream 2 disaster

In his rambling May 31 monologue following his felony convictions, Donald Trump somehow found time to reference the ill-fated Nord Stream 2 natural gas pipeline between Russia and Germany. Trump declared: “I ended the Russian pipeline. It was dead. He [Biden] comes in and approves it.” Trump went on to allege that Biden did so because money from the former mayor of Moscow’s wife was paid to the Biden family.

Similarly, in a speech at CPAC last year, Trump noted that he “got along very well with Putin even though I’m the one that ended his pipeline. … I ended it. It was dead.” Trump added that “nobody ever heard of Nord Stream 2 until I came along.”

In fact, Trump did not stop Nord Stream 2 — he enabled it. The Nord Stream 2 pipeline went from zero to 90 percent completed during Trump’s presidency. Rather than stop it “dead,” the Trump administration rejected years of bipartisan congressional calls for imposition of sanctions to stop the project. Only when Congress, in frustration, passed mandatory sanctions did the administration finally take concrete action. But by then it was too late. 

Far from “nobody” ever hearing of it, Nord Stream 2 was a lightning rod from when it was announced in 2015. The pipeline deal was part of the misguided German policy of deepening energy ties with Russia, despite Putin’s illegal annexation of Crimea and his fomenting of separatism in the Donbas region of Ukraine.

The Obama administration saw Nord Stream 2 for what it was: an effort to bypass existing gas transport routes though Ukraine and undermine solidarity among NATO allies. The project pitted Poland, the Baltic countries and Ukraine against Germany. The European Commission and European Parliament similarly opposed the project as a threat to European energy security.

Congress saw these dangers as well and took legislative action. In 2017, it passed the Countering America’s Adversaries Through Sanctions Act (CAATSA), which included a section specifically targeting Russian energy export pipelines. Sanctions against the pipelines were to be imposed at the discretion of the secretary of State in consultation with the secretary of Treasury and in coordination with U.S. allies.

Enter Rex Tillerson. Trump’s first secretary of State was a 2013 recipient of an “Order of Friendship” from Putin in recognition of Tillerson’s contributions to cooperation with the Russian energy sector while he was CEO of Exxon-Mobil. It was Tillerson who issued the fateful public guidance to energy companies that CAATSA sanctions would only apply to new Russian export pipelines — those contracted after August 2017. Contrary to the will of Congress, Nord Stream 2 was thus grandfathered in and outside the scope of sanctions. 

Under the Tillerson guidance, the five EU companies participating in Nord Stream 2 with Gazprom had no legal grounds to declare force majeure, and the project went forward at a rapid pace.

Mike Pompeo became secretary of State in April 2018 after Trump unceremoniously fired Tillerson by tweet. But Pompeo did not change the Tillerson guidance, and Nord Stream 2 remained grandfathered in.

Rhetorically, U.S. policy under Trump was — as it had been under Obama — opposed to the pipeline. Trump’s controversial ambassador to Germany, Richard Grenell, repeatedly and publicly raised the possibility of American sanctions against German companies involved, infuriating his hosts. Trump too spoke against Nord Stream 2 in Brussels in 2018, berating Germany for freeloading on the U.S. military while expanding energy ties with Russia.

But where it counted — actually imposing sanctions against the project at the key stage when it could be stopped — the administration did nothing. Indeed, Trump’s posture amounted to the worst of both words: alienating our German allies while failing to take action to stop the pipeline. Putin must have been pleased. 

Finally, in late 2019 — with the project 90 percent completed — a frustrated Congress, led by Sen. Ted Cruz (R-Tex.) and Sen. Jeanne Shaheen (D-N.H.), inserted a provision into the must-pass National Defense Authorization Act mandating that the administration apply targeted sanctions against ships involved in the laying of undersea pipe for the project.

These mandatory sanctions were effective. The Dutch-Swiss pipelaying company Allseas immediately ceased operation on Nord Stream to avoid sanctions. This suggests that the five EU energy companies that provided half the financing for the project would also have backed out had U.S. sanctions been applied in 2017.

With the project nearly complete, Germany was determined to see it through and criticized what it saw as U.S. overreach. As 2020 progressed, Gazprom was able to deploy some of its own pipe-laying vessels to the Baltic Sea. Only in July 2020 did Pompeo finally rescind the Tillerson guidance, making Nord Stream 2 itself subject to sanctions. But it was too little, too late. 

As the Biden administration took office in 2021, Russian vessels were laying pipe for the final segments of Nord Stream 2. While U.S. sanctions in 2017 would have killed the project, by 2021 it was a fait accompli. The Biden administration denounced Nord Stream 2 as a “bad deal” and a danger to European energy security. But given the unlikelihood of stopping it at this stage and the need to rebuild relations with Germany shredded under Trump, the administration elected to waive sanctions. A supposed payment by the former mayor of Moscow’s wife to the Bidens, as Trump has alleged on various occasions, had nothing to do with it.

Pompeo termed this waiving of sanctions a “terrible tragedy.” In fact, the tragedy came from the years of inaction on Pompeo’s watch and the encouragement this gave to Putin as he planned to weaponize natural gas exports as part of his full-scale war on Ukraine. 

Such is the Trump legacy on Nord Stream 2: wasting years during which the project might have been stopped and then blaming his successor for his own failure. Trump seeks to portray his handling of the pipelines as an example of his toughness in dealing with Putin. In fact, it epitomizes his ineptitude and that of his administration.

Colin Cleary is an adjunct professor of U.S. Foreign Policy at George Washington University and a former U.S. Foreign Service officer. He was director of Energy Diplomacy for Europe in the State Department’s Energy Bureau from August 2018 to February 2020.