US to create $1B fund for European energy projects, countering Russia influence

The U.S. is set to create a new $1 billion fund for energy projects in Europe and Eurasia to free countries like Ukraine from Russian energy dependence, which American lawmakers say Moscow uses to exert a malignant influence across the region.

The program, created with bipartisan support by Congress, dovetails with new sanctions on two Russian pipeline projects to Europe, while the Senate weighs even further penalties on Moscow.

But it may face headwinds from President Donald Trump, who continues to try to improve ties with Russia and increase trade and economic exchange. Just last week, Secretary of State Mike Pompeo promised "significant announcements about economic efforts" with Russia soon.

While the Trump administration has been supportive of the bill, Trump’s browbeating of NATO allies and deep disapproval of him in Europe have raised questions in European capitals about the U.S., with leaders like French President Emmanuel Macron calling for stronger European unity.

"We’re trying to find new and inventive ways to alter the reality in Europe, which is an America that is increasingly totally and completely irrelevant," Sen. Chris Murphy, D-Conn., who co-sponsored the bill, told ABC News Wednesday.

"Trump has made us a literal laughingstock in Europe. They get together with the cameras running, and they laugh at him, and they laugh at us. Of course Congress is going to try to do whatever we can to change that," he added.

Murphy’s bill, the European Energy Security and Diversification Act, was included by the Senate Tuesday in a year-end spending bill. Similar legislation passed the House earlier this year, meaning it heads to Trump’s desk as part of the larger bill, which he is expected to sign to keep the government open.

In particular, it authorizes approximately $1 billion in financing over the next four years from the U.S. government for energy projects in the region -- a new strategy to counter Russian influence. It will also give the U.S. Trade and Development Agency an additional $31.5 million to facilitate U.S. companies working with European energy projects.

Those U.S.-boosted projects would push back on Russian energy dominance, Murphy and his co-sponsor Sen. Ron Johnson, R-Wisc., argue, in turn minimizing President Vladimir Putin’s political and economic leverage in neighboring states and even into the heart of Europe.

The Trump administration has supported and even provided last-minute input for the bill, according to Murphy. Under Secretary of State for Political Affairs David Hale told the senator during a hearing this month that increasing Europe’s energy independence is a key priority. “We don’t want Germany and others in Europe to be even more dependent on Russian energy sources," he said.

But Murphy still expressed concern that the president -- who has pushed for the U.S. to be softer on Russia than even his own administration’s actions and who has scorn for the kind of green technology promoted by the bill -- will stand in the way.

"They are criminally soft on Russia. It’s hard to understand why, and this would not be the only tool at their disposal that they might ignore to take a harder line with the Kremlin," Murphy said in an interview.

One day after Putin met Ukraine’s new President Volodymyr Zelenskiy for talks on Russia’s aggression in eastern Ukraine, Trump hosted Putin’s top diplomat in the Oval Office. Russian Foreign Minister Sergei Lavrov also met with Pompeo, who called for increasing economic ties. Lavrov later told reporters he and Pompeo will soon announce a business council of executives from both countries to develop "mutually beneficial projects in the economy and investment."

But while the administration continues to push for closer ties, Republicans and Democrats in Congress are seeking to further penalize Russia. The year-end defense spending bill sanctions the companies constructing the Russian pipeline Nord Stream 2, which elongates a natural gas pipeline from Russia to Germany. U.S. officials have vocally opposed it for years, but Germany has moved ahead with it -- with some White House officials reportedly conceding sanctions at this point are too little, too late.

There’s also bipartisan concern Trump could further tear the transatlantic alliance with Europe, especially if he is acquitted in a Senate impeachment trial. With strong bipartisan support, Congress also passed legislation requiring its consent for a president to withdraw from the alliance by withholding funds for any exit.

"In the wake of the decision to pull out of Syria, everybody is very nervous that he could pull us out of NATO if he wakes up on the wrong side of the bed,” Murphy told ABC News, adding Trump could become “more emboldened to make rash decisions about national security if he comes out of this process without any real sanction."