The debate: should Germany ditch the new Russian pipeline?
A 7-minute read
Welcome to our second subscriber newsletter! Today we are disagreeing over whether Germany needs the Nord Stream 2 gas pipeline.
Jörg & Axel
Nord Stream 2, a pipeline currently being built under the Baltic Sea from Russia to northern Germany, has turned into the most tense diplomatic standoff between Berlin and Washington since the second Iraq War.
Both Democrats and Republicans in the US are determined to prevent natural gas from every flowing through the 1,230 kilometres of steel tubing. A bipartisan sanctions programme imposed at the end of 2019 managed to scare off private companies just as the project was entering on the home stretch.
But Gazprom, Russia’s state-owned gas exporter, brought in two of its own ships to finish the job.
Angela Merkel seems determined to see the project through, too. She argues that Germany needs the gas as a “bridging” energy for the years in which renewables still can’t provide for all of Germany’s energy needs.
At the same time most other EU countries oppose the project, while the German government is desperate to improve relations with its transatlantic partner after four miserable years of dealing with Donald Trump.
So what should Germany do?
Axel makes the case that looking for moral purity in energy politics is a phantasy - instead Germany needs to prioritise saving the planet over standing up to Putin. Jörg counters that finishing the pipeline would be too big a risk - instead Germany needs to reverse a disastrous error it made in 2011.
‘Germany shouldn’t cave in to US pressure’
German president Frank-Walter Steinmeier's attempt to couple the construction of Nord Stream 2 to German war guilt is as wrong as the belief that trade with Russia will somehow topple the Putin regime is naïve. Germany is no longer peddling the fable that Volkswagen’s China exports are a democracy project, so why should it be true for Russia?
But Germany, where all political parties bar the Greens, are in favour of finishing the pipeline, need not hide behind moral arguments for wanting to get the pipeline finished.
The case for importing Russian gas is an economic one and when Angela Merkel claims that criticism of the Russian regime and Nord Stream 2 have to be separated, she’s not a hypocrite, she is right.
Let’s face it, energy is a dirty business. Unlike Norway and Sweden, which are blessed with a natural supply of hydropower on which they can base their clean, cheap and autonomous energy supply, countries like Germany need to compromise.
Compromiser-in-chief has always been the United States, which gave up its right to moralize over other countries' energy policies when it struck a Faustian pact with Saudi Arabia 75 years ago.
It’s laughable that America, whose energy policies have for decades propped up Middle Eastern dictators and fuelled Islamist terrorism, should have the gall to criticize Germany for building Nord Stream 2.
When the project was given the green light by the German government in January 2018, its most vocal critic was then US Secretary of State Rex Tillerson. In his previous role as CEO of energy giant ExxonMobil, the lobbyist veiled as a politician vehemently opposed US sanctions against Russia following the annexation of Crimea.
And pious Ted Cruz, the far-right Republican Senator and shale gas proponent who is now threatening Germany with sanctions, should perhaps re-read John 7:53–8:11 - The United States of America has never imported as much Russian petrol as it did last year. The one who is without sin, and all that…
Any industrial nation that takes the moral high ground on energy soon finds that it is skating on thin ice.
Another critic of Nord Stream 2 is Poland. Whether primarily motivated by de facto ruler Jaroslaw Kaczynski’s conspiracist belief that Russia killed his brother, or by the threat the pipeline poses to Poland’s new liquified natural gas (LNG) terminal in Swinoujscie on its Baltic coast, is hard to tell.
Denmark, Finland and Sweden, who for historic reasons have no illusions about mother Russia, but who also have no economic skin in the game, have all given Nord Stream their approval...
The gas that flows from Russia to Germany under the Baltic Sea is a necessity for Germany to achieve its ambitious goal to decarbonize its energy supply by 2050. A goal that Poland, where 75 percent of the energy supply stems from carbon, does not share.
The climate crisis is the largest threat to mankind in, well, the history of mankind. What is the true moral priority: decarbonizing energy consumption as quickly as possible, or in making a symbolic stand against Vladimir Putin?
After a junior minister in the French government said that Europe should “stop the project” over Russia's imprisonment of opposition leader Alexei Navalny, foreign minister Jean-Yves Le Drian quickly reigned him in.
Maybe he was reminded by Emanuel Macron of how eager France was to send Rafale and Mirage fighter planes to topple Gadhafi in order to help Total get its hands on lucrative oil contracts in Libya.
Nord Stream 2 is not a clean project, neither politically nor environmentally. But there is no moral high ground in the energy business.
‘Ditching Nord Stream 2 is painful but necessary’
Germany has backed itself into a corner over Nord Stream 2. The only party that is against the pipeline is the Greens. Ironically, the Greens are the primary culprits for the fact that all their adversaries see the pipeline as alternativlos.
The environmentalists’ decades-long smear campaign against nuclear energy bore fruit in 2011, when Germans were the only Europeans to take to the streets to demand an end to nuclear energy in the wake of the Fukushima meltdown.
Despite the fact that Fukushima was caused by an earthquake - a natural disaster unknown here - Germans marched in their hundreds of thousands calling for an immediate Atomausstieg.
The protests led Angela Merkel to make her single biggest mistake as Chancellor. Fearing that the SPD and Greens could combine over the nuclear issue to oust her from power, she caved in and promised to close the last nuclear power stations by 2022.
At the drop of a hat, a quarter of Germany’s electricity supply was put on the palliative care ward.
The Greens’ insistence that the gap could be filled with renewables was always delusional. The Energiewende, as well as being hugely expensive, is also vastly inefficient. Storage facilities that could flatten out the unavoidable fluctuations in wind and solar production are still a pipe dream. And the more wind turbines Germany erects, the more that local communities fight back against the rapid industrialisation of their landscapes. The result: onshore wind farm construction has practically ground to a halt.
But Germany’s manufacturing base - the bedrock of its economy - needs to be kept running. As the world’s second largest exporter of goods, Germany is reliant on vast sources of heating and electricity. Its coal mines are a cheap and plentiful solution. Too bad that brown coal is so carbon heavy - not ideal for a country that wants to reach carbon neutrality by 2050.
So what option does Germany have other than importing natural gas - which is both affordable and releases far less C02 into the atmosphere than coal? Surely it makes sense to buy the seemingly endless quantities being sold by a supplier a few hundred kilometres up the Baltic coast?
No, it doesn’t.
Pulling out of Nord Stream 2 with just five percent of the project left to be finished would be a decision fraught with political risk - Moscow would take it as a signal that Germany is prepared to mix energy and diplomacy - something Berlin has always avoided. Putin, a man famous for holding a grudge, won’t forgive such a humiliation.
Nonetheless, it is the right move to make, as long as Germany simultaneously returns to a sensible energy policy. Germany is already too reliant on Russian gas. The geo-political risks of deepening this dependency outweigh the understandable energy concerns that are driving it.
There are already three pipelines that deliver Siberian gas to Germany - Nord Stream 1 which runs under the Baltic, one through Poland, and one through the Ukraine, making Germany the single biggest market for Gazprom. While Berlin likes to say that energy and diplomacy should be “decoupled”, Moscow clearly doesn't play the same game: it has used gas supplies to Ukraine to twist Kiev’s arm in the past.
While it is unlikely that the Kremlin would use such crude tactics against Germany as anything but a last resort, Berlin is also aware that just such an ultima ratio does exist should Moscow choose to use it. This weakens any German Chancellor’s hand.
A new generation of young Russians, Belarussians and Ukrainians are sick of corrupt oligarchs. It is just a matter of time before the next political flare up in Russia or on its borders leads to a diplomatic crisis in which western Europe has to stand on the side of democracy. But, the more Germany depends on Russian fuel, the less the Kremlin has to fear a united European response.
Eastern European states like Poland know that - that’s why they are so scared of the geopolitical implications of Nord Stream 2.
The solution is a common European energy market which makes use of the liquified natural gas (LNG) terminals that are dotted along the continent’s coasts and which still are not even close to being used at full capacity. Yes, LNG is more expensive. And yes, some of the countries that one would buy from are corrupt. But diversifying your suppliers diversifies your risk.
At the same time, much of the LNG can be imported from the US, which is surfing on the shale gas wave. That’s a good thing - the more that democratic states prioritize trade with one another, the more they create the only democratic incentive autocrats like Putin understand - the hard currency of cash.
That’s not enough, though. Natural gas is never going to cover the energy gap created by the double exit from nuclear and coal. Costly wind and solar energy projects have been driving domestic energy costs through the roof, increasing the pressure to bring in cheap gas. A brave German government would follow the example of France, which has a stable and affordable nuclear energy infrastructure, and use the most efficient source of energy that physics can buy.
If the Green party is ready for government it needs to ask itself a tough question: given that carbon-based fuels still make up half of German electricity production (that’s not even to mention heating!), can an affordable, independent and environmentally friendly energy policy really exist without nuclear power? Meanwhile, the CDU needs to have a serious think about how its desire for European energy independence can be coupled with over-reliance on the Kremlin.
Unfortunately, none of this is going to happen. Opposition to nuclear power is written into the DNA of the Green party, while economic lobbying and war guilt have blinded the SPD and the CDU to the wider implications of their nationalistic energy policies. The best we can hope for is that the new US administration can pressure Berlin into a compromise in which it agrees to take in reduced amounts of gas through the new pipeline while investing in its LNG infrastructure.
Pro & Contra - very good format if used sparingly. In this case, very successful, methinks. Agree with Jörg, interesting suggestion for compromise.