US Politics

US Defense Bill Deal Includes Tough Sanctions Against Russias Newest Gas Pipeline to Europe

WASHINGTON—Senate and House negotiators reached an agreement on the National Defense Authorization Act (NDAA) that includes among its hundreds of provisions a measure requiring sanctions against individuals and firms backing construction of Russias Nord Stream 2 natural gas pipeline.

“Including my legislation with Sen. Jeanne Shaheen (D-N.H.) in the NDAA highlights the bipartisan, bicameral consensus in Congress and throughout the government that the U.S. must stop Russias Nord Stream 2,” Sen. Ted Cruz (R-Texas) said in a statement.

“In the coming days, Congress will approve and the president will sign into law targeted sanctions that will do exactly that, specifically penalizing the companies involved in installing the pipeline,” Cruz said.

The targeted firms include Shell, Wintershall, Uniper, OMV, and Engie, which are funding half the pipelines construction costs.

“In doing so, we will have protected Europes energy security and prevented Putin from leveraging billions of dollars that could be used to fuel Russian aggression,” he said.

The Cruz-Shaheen sanctions proposal was introduced earlier this year as the Protecting Europes Energy Security Act of 2019, which was approved July 31 by the Senate Foreign Relations Committee on a 20–2 vote.

Russian President Vladimir Putin began construction of the Nord Stream 2 pipeline in an effort to create an alternative structure to transport natural gas from his country to multiple customers in Eastern and Western Europe.

Russia has long been Europes main source of natural gas, although the invasion of Ukraine by the Russian military in 2015 prompted the latter to phase out its purchases. Putin also worried military action would damage Nord Stream 1, which opened in 2011 with a major section transiting Ukraine.

“Russia is constructing a new Baltic pipeline, Nord Stream 2, with the financial support of several European energy companies,” the Congressional Research Service said in a study released Sept. 19.

“If the pipeline enters into operation, it is expected to further reduce Russian gas transit through Ukraine. This development would not necessarily increase Ukraines vulnerability to energy supply cutoffs,” CRS said.

“Ukraine stopped importing natural gas directly from Russia in 2016; it could, however, increase Ukraines strategic vulnerability, as Russias dependence on Ukraine for gas transit would no longer be a potential constraining factor in its policies toward Ukraine,” CRS continued.

A U.S. measure approved in 2017 reaffirmed U.S. opposition to the new pipeline, due to its “detrimental impacts on the European Unions (EU) energy security, gas market development in central and eastern Europe, and energy reforms in Ukraine,” according to CRS.

Secretary of State Mike Pompeo said in November 2018, the new pipeline “undermines Ukraines economic and strategic security, and risks further compromising the sovereignty of European nations that depend on Russian gas.”

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