Many in the U.S view the planned Nord Stream 2 pipeline project, which is set to carry natural gas from Russia to Germany through the Baltic Sea, as an attempt to divide NATO, an expert told Anadolu Agency on Monday.
Scheduled to become operational in 2020, the pipeline has been under heavy scrutiny recently by the U.S. President Donald Trump who said Wednesday "Germany is the captive of Russia" because of the project.
"Germany is totally controlled by Russia because they will be getting from 60 to 70 percent of their energy from Russia with a new pipeline," Trump said on the first day of the NATO summit in Brussels. "We are supposed to be protecting you from Russia, but why are you paying billions of dollars to Russia for energy?" he added.
"The Russians want to divide NATO," Ed Hirs, an energy economist at the University of Houston, told Anadolu Agency, adding, "Trump is concerned about Germany turning towards a cheaper alternative [of gas] at the expense of the strategic alliance with NATO and the western bloc."
"It's a weapon," Hirs said about the pipeline and Russian natural gas. "It is a strategic and economic weapon. They could cut the gas off to Germany and cripple the German economy and not have to fire one shot," he argued.
Trump has been critical of NATO since last year and he demands other NATO members pay their fair share of the defense budget instead of letting the U.S. carry most of the financial burden of the organization.
He also said Germany's overdependence of natural gas from Russia is "a very bad thing for NATO."
"This is not just a Trump analysis. It is a strategic analysis that many people in the U.S. administration have undertaken," Hirs said.
"This is something that the Department of Defense, National Security Agency, everybody in Washington, Republican and Democrat, both recognize. This gives a huge amount of economic leverage to Russia over Germany," he explained.
- Germany's close ties with Russia
Russian energy giant Gazprom cut off natural gas supplies to Ukraine in June 2014, four months after the annexation of Crimea. Although Moscow faced western sanctions, Washington's concerns have grown stronger over the close ties between Germany and Russia.
German Chancellor Angela Merkel, who grew up in East Berlin, is fluent in Russian and knows Russian President Vladimir Putin for around 15 years, while there are more than 6,000 German companies operating in Russia.
"Trump or any president cannot save the Germans from themselves. Merkel has a warm relationship with Putin. Putin will try to chisel the allies apart. We're not going to be able to respond and protect Germany when Putin decides to cut their gas supplies off. It may very well be too late," Hirs said.
"Nobody really wants to go to war. But if Putin decides to expand, or the Russians later decide to expand, it's an attack against the NATO allies. Will the Germans step up and respond especially if they know that the Russians would cut off the gas supply and their families are all freezing?" he added.
Cyril Widdershoven, a partner of consultancy firm VEROCY in the Netherlands, told Anadolu Agency that a good relationship with Russia has always been a major focal point for Germany.
"Even during the Cold War, Germany was relying on gas supplies from the Soviet Union. At the same time, German-Russian business cooperation is extremely high. German business leaders are heavily involved in Russian activities or even lobbying efforts," he said.
- Cost of Russian gas VS. U.S.' LNG
Trump's criticism of the Nord Stream 2 also stems from his willingness to increase the U.S.' LNG supplies to Europe -- an attempt to realize American energy dominance and to wean Europe's energy dependency off Moscow.
However, cost is a major issue for Europe in importing American LNG.
"At present, Russian pipeline gas is the cheapest. Competition is still in favor of pipeline gas," Widdershoven said.
"While access to German markets for LNG is still underdeveloped, even when counting on access via third-party countries, transportation cost from third party to Germany will be constraining overall export to Germany in the end," he explained.
Since the 2008 shale revolution, the U.S.' gas production is booming, but there is only one operational LNG export facility in the U.S. -- Cheniere Energy's Sabine Pass terminal in the state of Louisiana.
The U.S.' Federal Energy Regulatory Commission (FERC) has approved nine LNG export projects, but only five are currently under construction while 13 export projects are pending a decision, according to FERC data compiled by Anadolu Agency.
Russia makes long-term take-or-pay contracts when selling gas, but Hirs said, "A contract with Russians is only good as long as they're making money on it and it fulfills their strategic needs."
"Russians have a history of abrogating contracts. They've done that with gas supply deliveries in past years. They've done that with oil delivery, currency exchange, and debt. With these long-term contracts, Germany is agreeing to buy the gas at a set price," he said.
"Once anything changes, the Russians will abrogate that contract. Germany needs to diversify its energy supplies, but it is not thinking strategically about this. Germans are taking a very big economic and strategic risk. If there is a conflict with NATO, Russians will have a huge amount of leverage over Germany," he warned.
Widdershoven said security of energy supply is a major issue for Europe, and added that even the European Union has been promoting diversification of supply, however, little has happened towards this end.
"At present, Russian gas is ruling on all sides and will even become more important in the coming years. Exports of Russian gas to Europe are up, instead of becoming under pressure. Other supply routes are still underdeveloped or are constrained by geopolitics or other issues. Central Asia, Caspian [region], Algeria or Egypt are considered but are not being fully addressed. Iran at present is out for years," he explained.
"U.S. LNG can address only a part of all, as costs and availability are not yet attractive enough. At the same time, LNG needs landing points, which are not fully developed, while most of Europe鈥檚 upcoming gas needs are in countries without any option for LNG at present," he concluded.
The U.S.' exports of LNG totaled around 20 billion cubic meters (bcm) last year; while only 2 bcm, or 10 percent of this amount, was imported by European countries, according to the U.S.' Energy Information Administration (EIA) data.
The Nord Stream 2 is planned to carry 55 bcm from Russia to Germany.
By Ovunc Kutlu in New York
Anadolu Agency
ovunc.kutlu@aa.com.tr