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Biden sanctions Russian natural gas pipeline company Nord Stream 2

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Biden sanctions Russian natural gas pipeline company Nord Stream 2

Feb 23, 2022 | 5:33 pm ET
By Jennifer Shutt
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WASHINGTON — President Joe Biden on Wednesday sanctioned the Russian company tasked with building and operating the Nord Stream 2 natural gas pipeline, as well as its corporate officers.

Biden said in a statement the sanctions are part of the “initial tranche” of economic restrictions the United States began imposing on Russia earlier this week after it sent troops into eastern Ukraine.

“Through his actions, President Putin has provided the world with an overwhelming incentive to move away from Russian gas and to other forms of energy,” Biden said.

German Chancellor Olaf Scholz suspended the approval process earlier this week in response to Russian aggression toward Ukraine. And Biden said Wednesday the two “closely coordinated” their response.

The Nord Stream 2 pipeline, running under the Baltic Sea, is a multi-billion-dollar project that its parent company has completed, though the pipeline isn’t yet operational — and at least for now will not be following the U.S. and German actions.

“It’s currently dead at the bottom of the sea,” White House Press Secretary Jen Psaki said Wednesday.

Nord Stream 2 AG, the entity sanctioned Wednesday, was set up under the Russian state-owned gas company Gazprom to handle the natural gas pipeline project. The pipeline would transport gas from vast reserves in Russia to the European Union market, making landfall in Germany.

The sanctions announcement marks the third day in a row the Biden administration has detailed economic repercussions for the Russian government in an attempt to prevent further escalation in Ukraine.

On Monday, the administration barred new investment, trading and finance in the so-called Donetsk People’s Republic and the Luhansk People’s Republic — the two breakaway regions in eastern Ukraine that Russian President Vladimir Putin declared independent.

On Tuesday, Biden announced sanctions on two Russian financial institutions; Russian sovereign debt, cutting the nation off from Western financing; and Russian elites and their family members, who Biden said “share in the corrupt gains” of Russian policies.

Treasury Secretary Janet L. Yellen said the sanctions would “begin the process of dismantling the Kremlin’s financial network and its ability to fund destabilizing activity in Ukraine and around the world.”

Biden also said Tuesday he’d authorized moving U.S. military personnel and equipment already in Europe to Estonia, Latvia and Lithuania — all of which are in the North Atlantic Treaty Organization.

Biden reiterated he had no intention of sending U.S. soldiers into Ukraine to confront Russian troops, but said he wanted to send an “unmistakable message” that the United States “will defend every inch of NATO territory.”

Psaki said Wednesday the administration is aware of Russian officials vowing counter sanctions against the United States, but declined to detail whether American officials know what those might be.

Psaki did say that if Russia retaliates against the U.S. in a way that leads to a spike in energy prices, releasing more oil from the Strategic Petroleum Reserve is “certainly on the table” as one way to minimize impact on energy markets.

The Biden administration, she said, doesn’t expect the sanctions announced this week to have an impact on Americans. But Psaki said officials are preparing for Putin’s next steps.

If the Russian government escalates, Psaki said, the White House has a “range of steps” it’s prepared to take, especially on financial institutions.

“There’s enormous financial institutions — the two largest banks, for example — which were not a part of the announcement we made yesterday,” Psaki said. “There’s additional steps we’ve expressed an openness to, including taking steps as it relates to export controls. So these are assessments we will continue to make internally.”