US Congress unlikely to override Biden's Nord Stream 2 sanctions waiver

US Senate Republicans opposed to the Nord Stream 2 gas pipeline will not likely gather enough support to reverse the Biden administration's decision to waive some sanctions on the project developer.

Senator Kevin Cramer, Republican-North Dakota, said late May 24 that he had not yet picked up any Democratic support for his bill, the Protecting Our Well-being by Expanding Russian Sanctions (POWERS) Act. It would reverse the waiver granted to Switzerland-based Nord Stream 2 AG and its CEO Matthias Warnig, as well as expand the sanctions to include subcontractors working on the pipeline.

"We sure would like to get some Democrats on board," Cramer said in an interview on the Platts Capitol Crude podcast. "But if not, then I guess we're going to make more of a point than a law."

The State Department said May 19 that applying sanctions against the pipeline developer would negatively impact US relations with Germany, the EU and other European allies.

Cramer said the waiver was "peculiar" because it remains the official US position to oppose completion of the pipeline.

He said the US government should be "doing everything we can to make the case" for Europe to use US LNG on the basis of supply security and competitive cost.

"I would hope that at the very least we're sending a strong message not just to Russia, but to Germany ... to let them know there's significant political opposition to this in the United States and maybe you could consider something different than Nord Stream 2 and Vladimir Putin for your natural gas," Cramer said.

"The United States produces a lot of it, it is in great abundance here," he added. "The process of producing natural gas has become much more environmentally friendly."

US-Russia summit

The Nord Stream 2 waiver came days before the White House announced that President Joe Biden would meet with Russian President Vladimir Putin on June 16 in Geneva, Switzerland.

"The leaders will discuss the full range of pressing issues, as we seek to restore predictability and stability to the US-Russia relationship," White House Press Secretary Jen Psaki said.

US Secretary of State Antony Blinken on May 24 reiterated US concerns about the project during a phone call with German Foreign Minister Heiko Maas, the State Department said.

'Virtually inconceivable'

Kevin Book, managing director of ClearView Energy Partners, said the Biden administration may have wanted to send a signal to Berlin that it was willing to trade Nord Stream 2 for a stronger US-EU partnership.

"At this point, truly stopping a pipeline that the German and Russian governments are determined to complete might not merely require sanctions against NS2 financial sponsors and Nord Stream 2 AG," Book said in a May 17 report to clients.

"It might also require Washington to target Russian gas deliveries themselves — that is, taking aim directly at European energy security and economic independence. We deemed such a thing unlikely during the Trump era, and we regard it as virtually inconceivable today."

Russia has said it expects the pipeline to be completed this summer, with less than 100 km out of its total 2,460 km length estimated to be left to lay. It has insisted that it is a purely economic project.

The Biden administration's next report to Congress is due in mid-August, meaning that the pipeline could be close to completion at that time.

S&P Global Platts Analytics said more construction delays and pipeline underutilization remain possible, depending on Germany's September elections and European third-party access regulations.

If completed, Nord Stream 2 will allow for up to 55 Bcm/year of Russian gas to flow directly to Germany to add to the existing 55 Bcm/year capacity of Nord Stream pipeline.