The World Today for August 10, 2021



Energy Chess

The US and Germany recently reached a deal wherein the US would agree to drop its opposition to Nord Stream 2, an approximately 750-mile-long pipeline through the Baltic Sea that would allow Russia to export natural gas to Europe, as the Russian state-owned Gazprom website explained.

As part of the agreement, Germany would invest in green technology in Ukraine and work with the US to oppose Russian dominance of European energy markets.

Critics said the US had given Russia enormous power over European democracies while also ensuring another steady stream of foreign currency to autocrats in Moscow for years to come. The pipeline project costs around $11 billion. “This is a generational geopolitical mistake that decades from now future Russian dictators will be reaping billions of dollars of benefits annually from,” Senator Ted Cruz, the Texas Republican, told the Washington Post.

Democrats and Western European diplomats issued similar statements. Russia has also used the pipeline as an excuse to expand its military footprint in the Baltic, National Interest wrote. The plan would allow Russia to bypass Ukrainian gas lines that provide the former Soviet republic with vital revenues, Reuters added.

But defenders of the agreement said Nord Stream 2 was going to move forward with or without American approval. At least, argued President Joe Biden in CNN, the US advanced some of its goals in the region. German leaders have also suggested they would act to prevent Russia from harming Ukraine in that way, wrote Tass, a Russian state-owned news agency.

The US needed to accept the pipeline to maintain good relations with Germany, argued Politico. Germany was determined to see the pipeline built to secure its energy supplies and engage with Russia commercially rather than militarily. Under the deal, Germany will spend $200 million to improve Ukraine’s electrical grid, create a $1 billion fund to expand renewable energy in the country and ensure that Russia keeps exporting gas through Ukraine until 2034 at least, according to Bloomberg.

The US might have also been seeking to protect its own commercial interests involving pipelines, added Foreign Policy magazine.

Writing for the Moscow Times, Carnegie Moscow Center Senior Fellow Alexander Baunov felt that everyone won in the agreement. While Russia might receive a windfall in the short term, Europe will continue to develop its renewable energy sources, reducing overall dependence on carbon-based fuels in the medium and long term.

Win or lose, Europeans admit it’s a risky bet on an uncertain future.

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