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Politics

Natural gas is playing a major role in the Russia-Ukraine crisis

RACHEL MARTIN, HOST:

Russia has planned a major military exercise in Belarus today on the Ukrainian border. Meanwhile, Russian warships have already made their way into the Black Sea. These military moves are complicating the diplomatic effort to end the crisis between Russia and Ukraine. One of the strongest levers that the U.S. and its allies have against Moscow is sanctions, particularly oil and gas, which prop up Russia's economy. And earlier this week, President Biden warned that if Russia invades Ukraine, this multibillion-dollar pipeline called Nord Stream 2 will not become operational. NPR's international affairs correspondent Jackie Northam joins us now. Good morning, Jackie.

JACKIE NORTHAM, BYLINE: Good morning, Rachel.

MARTIN: What makes this pipeline so central to this crisis?

NORTHAM: Right. Well, Nord Stream 2 is an $11 billion project that's designed to pipe natural gas directly from Russia to Germany. And it's about 750 miles long and runs under the Baltic Sea, and that means it would avoid Ukraine, which other pipelines pass through. Also, Russia wouldn't have to pay any costly transit fees that it currently does to Ukraine. You know, the construction on Nord Stream 2 is complete, but it still hasn't been certified, so it's not pumping any gas yet. And some of the holdup is believed to be political.

MARTIN: Right. We'll get to that. So this thing, though, has already been built. How do you bring an end to it?

NORTHAM: That's a question that came up, you know, to a lot of people's minds. And to try and understand that I called up James Waddell, and he heads up European gas at the London-based Energy Aspects. And he says it would have been better if the U.S. had done something while the pipeline was being built. But Waddell says now there are a few things the U.S. could target that could stop the operation. Let's have a listen.

JAMES WADDELL: Things like companies being able to do maintenance and providing insurance. But I think the real option and the sort of worst-case scenario for anyone buying gas, which is the big sort of five European backers of the pipeline, is if they were directly sanctioned, the financiers of the project.

MARTIN: Ah, OK. So when Biden says that the U.S. is going to shut down Nord Stream 2 - which is this deal between two separate independent countries, Russia and Germany - is he alluding to sanctions, then?

NORTHAM: Yes, that would be the short answer - is this is all about sanctions. You know, the U.S. has always opposed this pipeline because it could give Moscow too much leverage over Europe. Europe relies on Russian natural gas to, you know, heat homes and run factories and the like. And there's a lot of pressure on President Biden to take a hard line on Nord Stream 2, particularly from congressional Republicans. I spoke with Matthew Bey, and he's an energy specialist at RANE, which is a risk intelligence firm. Here he is.

MATTHEW BEY: You can probably make the argument that it is just as much about the domestic audience as it is the international audience, whereas if there is an invasion of Ukraine, President Biden will be basically forced to do something. And what is the do-something that right now the Republicans are asking him to do? It's sanction Nord Stream 2.

NORTHAM: And of course, this runs the risk of alienating European countries, particularly Germany, because, as you know, this is a hugely important project for them and they see as their energy independence, although we should say that Germany's chancellor has said all options are on the table.

MARTIN: And there's always the possibility that Russia could retaliate and shut off the flow of natural gas from other pipelines into Europe.

NORTHAM: Yes, and that's seen as a lose-lose situation. Europe relies on Russia for natural gas, and Russia relies on revenue from sales to Europe.

MARTIN: NPR's Jackie Northam. Thank you.

NORTHAM: Thanks so much. Transcript provided by NPR, Copyright NPR.