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Russian Pipeline Nears Completion; US Moves to Pressure Allies

Since it was first announced in 2011, the Nord Stream 2 pipeline project has become a fierce point of contention between the United States and its European allies. On July 6, 2020, despite immense pressure from its American partner to deal a crippling blow to the project, the Danish government granted companies working on the pipeline the ability to use vessels without a Dynamic Positioning System (DPS) as was previously required.

What is the Nord Stream 2 Pipeline?

The Nord Stream 2 is a gas pipeline currently under construction in the Baltic Sea. If completed, the project would connect the Russian Federation to Germany, and thus offer Russian gas companies direct access to the European market. While free market champions have touted the project as a way to increase wealth and product choice, concerns are rising that Moscow may use the pipeline to advance its gray zone strategy.

These worries have arisen in many NATO and partner countries, including the United States, Poland, and Ukraine. Speaking at a press conference in March, Polish Foreign Minister Jacek Czaputowicz warned about the potential military and intelligence applications of the pipeline, "this project can be used as a means of justifying increased naval presence and collecting intelligence of a wide variety in the Baltic Sea."

If the United States is unable to halt or delay construction further, The Intelligence Ledger assesses that the Nord Stream 2 can become operational as early as November 2020.

The Danish Dilemma

Denmark had long been seen by the United States as a means of delaying or halting construction of the pipeline. The government in Copenhagen typically denies permits for seafloor construction vessels that do not utilize a Dynamic Positioning System (DPS; underwater GPS) due to the presence of chemical weapon's that were dumped into the Baltic Sea during the Second World War. As such, the US shrewdly sought to deny Russia and Germany access to vessels with Dynamic Positioning System by threatening companies that operated such platforms with financial sanctions. This strategy worked, with two privately-owned pipe-laying vessels withdrawing from the project upon the announcement from Washington.

Russia only has access to one vessel with a DPS: the Akademik Cherskiy. The Russian Federation's only other pipe-layer currently available is the MV Fortuna, which does not possess such a system. The new announcement from the Danish Energy Agency removes the only hurdle stopping the Fortuna from helping the Cherskiy complete the last 160 kilometers of construction, and thus speeding up the timeline of the project.

America's Last Gambit

Although the Danish Energy Agency announcement is a blow to the American campaign against the Nord Stream 2, the old superpower still retains the ability to halt construction. This last gambit is not without risk, however, and may plunge the United States into a diplomatic spat with a close ally: Germany.

The United States previously refrained from directly sanctioning official institutions in Germany or Russia currently working towards Nord Stream 2's completion. Rumors are swirling in Washington, however, that Congress and the President may take steps to target Berlin and Moscow directly if Nord Stream 2 came close to becoming operational. If Washington enacted such sanctions upon an ally, an already poor relationship would undoubtedly become worse.

The Intelligence Ledger will continue to monitor the situation and report on breaking development.


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