U.S. Senators Submit Bill With Sanctions Targeting Russian Gas Pipeline

WASHINGTON -- A group of U.S. Republican senators has introduced a bill to sanction entities involved with a Kremlin pipeline project as Washington seeks to force its European allies to reduce their dependence on Russian energy.

The ESCAPE bill -- if passed -- would likely delay the completion of Nord Stream 2, a key Russian project to deliver natural gas to Germany by sea, thus avoiding transit through Eastern Europe.

The bill authorizes U.S. sanctions on individuals offering investment, goods, or services to Russia to facilitate the development of energy export projects, according to a copy of the document submitted on June 13 by Wyoming Senator John Barrasso.

Russia’s state-owned gas giant Gazprom is building the $11 billion pipeline that would carry 55 billion cubic meters (bcm) of gas a year to Europe’s largest economy. Russia said last week it expected to complete the project by the end of 2019.

Critics say the pipeline will make Europe even more dependent on Russian energy. Gazprom delivered about 200 bcm of natural gas last year to Europe, accounting for slightly more than one-third of the region’s gas consumption.

The pipeline would also enable Russia to cut gas shipments through Ukraine, a U.S. ally that is battling Russia-backed separatists in its eastern provinces. Gas transit fees from Russia are a significant source of income for the Ukrainian government.

Barrasso’s bill comes a day after President Donald Trump again ripped Germany for supporting Nord Stream 2. Trump said the United States spends billions to defend Germany while “Russia is getting billions and billions of dollars from Germany.”

“It really makes Germany a hostage of Russia if things ever happen that were bad,” Trump said on June 12 after announcing that Poland would buy $8 billion more of U.S. liquefied natural gas to ween itself off of Russian energy.

Igor Sechin, the head of Russia’s largest oil company, last week accused the United States of using its massive energy reserves as a political tool.

The United States is sanctioning energy-producing nations like Iran and Venezuela to make room on global markets for its growing domestic production, he claimed.

"The reality today is that the United States uses energy as a political weapon on a mass scale. Sanctions, or even the threat of their imposition, have a destructive effect on the global energy market ecosystem.” Sechin, a close ally of Russian President Vladimir Putin, told a business forum in St. Petersburg on June 6.

U.S. oil and gas production has surged over the past decade to a record high thanks to shale production. The United States ended a 40-year ban on oil exports in 2015 and began exporting liquefied natural gas for the first time from the lower 48 states in 2016. The United States is now the world’s largest natural-gas producer.

Barrasso did not deny that one of the aims of the bill is to sell more U.S. natural gas to Europe. Wyoming has the eighth-largest gas reserves among U.S. states, according to the U.S. Energy Information Administration.

‘’The ESCAPE Act will take away [Putin’s] geopolitical weapon by sanctioning the Nord Stream 2 pipeline and expanding American natural gas exports. In the United States -- especially in Wyoming -- we’re blessed with an abundance of natural gas,” he said in a statement on June 13.

“It only makes sense that we would use these resources to help our allies and loosen Putin’s economic and political grip on the region.”

The introduction of the bill is only the beginning of a long process. It must be accepted by the full Senate, then approved by the House of Representatives before being sent to Trump for his signature.