Putin’s endgame is to control Europe’s energy

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Expectations were low going into this week’s talks between NATO countries and Russia aimed at ending the impasse over Ukraine’s future. The meetings held over three days in Geneva and Brussels produced the outcome most pessimists had predicted, with Russian officials calling them “unsuccessful” and refusing to commit to further talks without preconditions.

No one is sure just who is bluffing whom as Russian President Vladimir Putin amasses 100,000 troops near the Ukraine border and U.S. President Joe Biden warns of “massive consequences” if Russia “further invades” its sovereign neighbour, a wanna-be NATO member.

Some analysts believe Mr. Putin would be willing to stand down if Mr. Biden agreed to his demand to permanently exclude Ukraine from joining the North Atlantic Treaty Organization alliance. U.S. officials have insisted such an undertaking is off the table but have suggested Mr. Biden may be open to making concessions regarding the deployment of NATO missiles in former Soviet bloc countries and military exercises conducted in Europe and the Black Sea.

“There’s some basic principles that are at stake here, basic principles that really go to international peace and security,” U.S. Secretary of State Antony Blinken said on Thursday. “Principles like one nation can’t simply redraw the borders of another by force; that one nation can’t dictate to one of its neighbours its choices, its people’s choices about their policies, about with whom they’ll associate; that one nation can’t just say that it’s going to exert a sphere of influence, a throwback to the last century, and subjugate its neighbours to its will.”

This all sounds, well, quite principled. But the truth is Ukrainian membership in NATO is a non-starter with several NATO allies, including France and Germany. And even U.S. foreign-policy hawks concede there is little appetite in Washington for expanding NATO now.

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Indeed, the solution to the standoff over Ukraine could hinge on the fate of the Nord Stream 2 pipeline that would double the volume of natural gas Russia’s state-owned Gazprom can ship to Germany. Previous U.S. administrations deemed the pipeline a national-security threat, since it would increase European dependence on Russian gas and reduce transit fees that Russia pays to Poland and Ukraine to transport gas on existing pipelines that cross their territories.

Last May, Mr. Blinken waived U.S. sanctions on the company that owns Nord Stream 2 and its chief executive officer in what was seen as a parting gift to former German chancellor Angela Merkel aimed at turning the page on relations that had become strained under Donald Trump. Ms. Merkel had championed the pipeline. Her successor, Olaf Scholz, considers Nord Stream 2 critical to Germany’s economic competitiveness, which has suffered because of surging energy prices stemming in part from the country’s decision to shutter its nuclear generating stations.

The Paris-based International Energy Agency projects German dependence on Russian gas will only grow in coming years as it aims to phase out coal-fired electricity generation and as gas supplies from the Netherlands dwindle. This week, IEA head Fatih Birol said the agency believes Russia has been holding back gas exports to Europe by a third in recent months, leading to a depletion of stored reserves on the continent that has sent prices even higher.

“Today’s low Russian gas flows to Europe coincide with heightened geopolitical tensions over Ukraine,” Mr. Birol said, suggesting Mr. Putin is using German approval of Nord Stream 2 as a bargaining chip in talks over Ukraine.

Democrats in the U.S. Senate this week tabled legislation that would renew sanctions on Nord Stream 2 if Russia invades Ukraine. They aimed to counter a bill sponsored by Republican Senator Ted Cruz that would immediately slap sanctions on the pipeline, a move Democrats argue would weaken Mr. Biden’s leverage in talks with Mr. Putin.

The Russian President’s machinations regarding Ukraine are undeniably motivated by far more than his desire to see Nord Stream 2, which runs across the Baltic Sea, enter into service. But the Biden administration’s apparent willingness to forgo sanctions on the pipeline if Russia refrains from invading its neighbour suggests it views Nord Stream 2 as a critical piece of the puzzle.

The question is whether the longer-term consequences of allowing Europe, and Germany in particular, to become even more dependent on Russian natural gas would be in NATO’s interests. Mr. Biden may see the Ukrainian standoff as a distraction given his preoccupation with China’s ascension. But handing Mr. Putin control over Europe’s energy security may not be such a good idea, either.

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