The environmentalist buying the world's oil
Dear Reader,
What has Robert Habeck, Germany’s Federal Minister for the Economy, been doing since the Russian invasion of Ukraine started three weeks ago?
Well, a look at the press releases on his ministry’s website leads one to a curious conclusion. In the midst of one of the worst crises in Europe in 70 years, he has been busy trying to get the nebulous hydrogen economy off the ground.
In the past fortnight he has been to the US and Norway. Tomorrow he is flying to Qatar, and the UAE - all in an effort to convince these countries of the importance of hydrogen and other “green” energy sources.
A read out from his ministry about the imminent trip to the Middle East stated that “the centre point of the trip was a discussion of energy, specifically hydrogen and LNG (liquified natural gas).”
“We need to speed up the transition from conventional natural gas to green hydrogen. The best way to do this is via a European and international network,” Habeck said before his departure.
In Norway he was able to claim a precious victory in his battle to replace Russian gas with hydrogen. He came back clasping what he called a “joint statement on hydrogen co-operation” signed with his Norwegian colleague Jonas Gahr Støre, which committed the Scandinavian country to selling “large volumes” of hydrogen to Germany “as quickly as possible.”
Meanwhile, on the eve of his trip to the Washington Habeck made clear that a key point of discussion would be the establishment of energy security by increasing investment in renewable energy.
“The most important plank of energy sovereignty is the global transformation toward more renewable energies and greater energy efficiency,” Habeck said.
If it strikes you as strange that Habeck would be investing so much effort in energy sources of a sun-kissed future at a time when Germany has about ten months before its strategic fuel reserves run dry - don’t worry.
The blurb being pumped out by the Economic Ministry is essentially just snake oil.
As Economics Minister, it is Habeck’s job to make sure that Germany retains its place as one of the export heavyweights of the world. He is the man whose door industry lobbyists knock on with their worries about losing competitive advantage. When the Economics Minister goes abroad, he brings a big delegation of CEOs with him.
But Habeck, co-leader of the Greens, wanted to do something new. When he entered office at the end of last year he renamed it the Federal Ministry for the Economy and Climate. Although Germany already has an Environment Ministry, Habeck planned for a major part of his work to involve steering German industry away from fossil fuels towards “clean” energy.
He has planned to spend the next few months touring German villages in an effort to get locals enthusiastic about wind power.
Then Putin threw a spanner in the works…
Habeck didn’t want to give up on the dream altogether though. Thus the emphasis on carbon-free hydrogen in the ministry read outs of his recent diplomacy.
The sober truth is that hydrogen is so insignificant to the German economy that it doesn’t even merit a category of its own in official breakdowns of German energy sources. It is grouped together with “other” in a category that accounts for one percent of energy supply.
Oil, gas and coal meanwhile account for over three quarters of the total energy supply. And Germany’s main supplier of oil, gas and (hard) coal… is Russia.
With all the will in the world, hydrogen is not the answer to the present crisis, or even a crisis five or ten years down the line.
That’s why, however Habeck wants to dress up his current assignments, what he is really doing is sounding out new fossil fuel suppliers to replace the Kremlin’s oil-magnate-in-chief.
Indeed, one only needs to read the actual text of the “joint statement on hydrogen” Habeck brought back from Olso to understand that green energy played second fiddle to oil and gas.
Before hydrogen is even mentioned, the statement states that:
“Norway is a very important exporter of oil and gas to Europe. Companies operating in Norway produce and sell oil and gas on the market up to capacity. The Norwegian government will ensure that Norway remains a stable and reliable supplier of oil and gas to Europe.”
Meanwhile, the real purpose of the mission to Qatar and the UAE is to secure major natural gas contracts. The Economics Ministry describes such supplies as “short-term and temporary”, which is strange because they are supposed to be delivered to “Germany’s own terminals” - terminals which haven’t yet been built and which will cost billions of euros to construct.
The trip to Washington, officially dominated by talks on Ukraine, was also about LNG imports. Habeck met US Energy Minister Jennifer Granholm. Shortly afterwards, Focus magazine reported that he had made a special €1.5 billion fund available for the purchase of LNG, although the source of the gas remains unclear.
Oh, and while he wasn’t touring the world, Habeck was busy agreeing for Germany to release half a million tonnes from its strategic oil reserves into global markets to try and tackle supply shortages caused by the Russian war.
All pretty hard-nosed stuff for a Green Minister for the Climate.
In other words, while hot air might fuel the press releases of the Economics Ministry, it still ain’t enough to keep the cogs of the German economy turning.