Saturday, January 29, 2022

Germany is a case study in how not to pursue an energy policy

It's difficult to believe that Germany has dug itself into quite such a large and enveloping hole over its energy imports as it apparently has.

While most Western countries are umming and ahhing over how they can best sanction Russia for its threats to the sovereign independence of Ukraine, there is an ominous silence coming from Germany. Why? Because it has sold its soul to Russian gas. It may not have been Angela Merkel's idea - that honour goes to her predecessor, Gerhard Schroeder - but she has certainly been instrumental in making that hole much bigger over her 16 years in power. (Mind you, Italy is probably in an even bigger hole vis-à-vis Russian energy, something that gets talked about even less.)

About 40% of Europe's imported gas comes from Russia, which is bad enough. But this figure is in the region of 50-75% in the case of Germany, and this could rise still further when Germany closes the last three of its nuclear reactors later this year. This increased reliance on Russia has has shot up in the last six or seven years in particular, from around 35% in 2015. The Nord Stream 2 gas pipeline, which doubles the capacity of the original Nord Stream 1 pipeline, is all on Ms. Merkel (although it is not actually in use yet, because it has still not been approved by German regulators).

Buy why would anyone put themselves, and their whole country, in hock to a superpower as unreliable and downright nasty as Russia? It is not beyond the realms of possibility that Russia would seek to weaponize its gas exports, and it would would easy for Putin to turn off the taps at the drop of a hat. He has already reduced supplies and increased prices to excruciating levels.

And now the Americans and others are calling for Nord Stream 2 to be used as a bargaining chip in sanctions talks, and the Germans are dithering and prevaricating. All because they are over-reliant on one energy closure and one (maverick) country.

UPDATE

Since the Russian invasion of Ukraine, and the very different attitude new German Chancellor Olaf Scholz is taking toward Russia (including rearmament and unexpectedly cancelling Nord Stream 2), Angela Merkel's relationship with Russia and Putin are starting to be looked at in a very different light

Merkel's fluency in Russian, her maintaining of diplomatic ties with Russia through thick and thin (including 2014's annexation of Crimea), her rapid increase in dependency on Russian energy imports, and even her insistence on maintaining German spending on national defence at a bare minimum, are all now starting to look like weakness, even suspicious appeasement. Other than her openness to refugees and immigration, her legacy is undergoing a major revision right now.

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