Nord Stream 2

Even before the start of the Ukraine war, German energy policy was in crisis. Upon new chancellor Scholz’s first meeting with the US president this February, Joe Biden made it clear that he would stop Nord Stream 2 if Russia attacked Ukraine. The pipeline was supposed to transport fifty-five billion cubic meters of Russian gas to Germany a year, via the Baltic Sea. When asked by a journalist how the American president could stop a German project, Scholz replied succinctly: “I promise you, we’ll be able to do it.”

But US intervention proved unnecessary. Just before Russian troops invaded Ukraine, Scholz announced the end of the pipeline project. This earned him praise from the fourth estate: “In times of crisis, Germans have been able to rely on all chancellors,” declared business daily Handelsblatt; it now saw Scholz as a member of this club of honorable leaders. He had decided without further ado that Germany’s goals could be achieved in a different way and was now mobilizing the nation against the enemy on the field of energy policy. But what was this project that he put a stop to?

During Angela Merkel’s reign, Germany had set the goal of complete reliance on renewable energies, to be achieved by the end of the “Climate Protection Program 2030.” Until then, a variety of energy sources should guarantee cheap electricity as a lubricant for German growth. The fact that Germany is supplementing its portfolio of gas, coal, and oil with a steadily growing share of climate-neutral energy sources such as water, sun, and wind is reducing the power of the fossil fuel supplier countries in general and Russia in particular. In these circumstances, the German-Russian Nord Stream 2 project appeared an anachronism, especially to an ecologically minded public. Wrongly so.

For it was precisely the advancing independence from fossil fuels that made Nord Stream 2 so attractive. For Germany, this was an opportunity to get its hands on liquid gold on its own terms. Among other things, a lawsuit against Gazprom was launched for this very purpose. The results were impressive, the Frankfurter Allgemeine Zeitung (FAZ) reported in 2017:

Gazprom has now agreed to remove the territorial restrictions on the resale of its gas from all supply contracts. The same applies to all contract components that make resale unattractive, such as Gazprom’s participation in any profits that accrue. . . . But the move was expected in Russia. The EU is by far the most profitable market for the supplier. It must retain it, almost at any price.

The diversification of energy sources and Germany’s freedom to renegotiate the existing treaties with Russia was thus anything but a passive project of energy self-sufficiency. This was never about becoming wholly independent of other countries, but simply of producing the necessary electricity for itself using renewable energies. With carefully calibrated language, the German government speaks of seeking energy sovereignty. This means gaining cheap access to the energy raw materials of other nations on terms dictated by Germany. The ever-lamented dependence on Russian gas was simply reversed, making Russia dependent on Germany as an importer.

Made in Germany

Further, Germany declared itself to be the central distributer of Russian gas, making it the decisive player also in this sense. Russia was to assume the role a provider for German energy hegemony, at least for Europe, but possibly also beyond. Thus, Germany committed Gazprom to the role of a logistics provider, delivering the formerly Russian gas as a German product: “However, Gazprom’s commitments go even further in this respect. The company promises to deliver gas resold by other EU states directly to Bulgaria and the Baltic states.” The current German government also stuck to this plan and wrote in its coalition agreement several times: “We are accelerating the massive expansion of renewable [sic!] energies and the construction of modern gas-fired power plants in order to meet the growing demand for electricity and energy at competitive prices over the next few years.”

To this end, the Russian gas influx couldn’t come fast enough. It should have been a cheap lubricant for a transformation of the German economy toward green growth. This “energy turnaround” was also meant to end US hegemony on the world energy market. Thus, Russian gas fit very well as a “bridging technology” to the long-term farewell to fossil energy sources.

In other words, energy sovereignty through Nord Stream 2 was an imperialist project, in which Germany wanted to assume the decisive role in the energy market, at least for all of Europe.

From the beginning, this project had plenty of enemies. First, the rerouting of gas transit across the Baltic Sea would have meant an end to transit fees for Ukraine. While German governments did have an interest in that country’s anti-Russian stance, the important revenues for Ukraine were not to stand in the way of Germany’s reorganization of the European energy market. Second, and much more weightily, some EU partners also opposed the project and branded Nord Stream 2 as a solo effort by Germany. Their counterproject of an “energy union” was in turn rejected by Germany. Third, Washington has also consistently opposed the pipeline, not least because its fracking operations have long since made the United States itself a gas exporter, now even a major one. Moreover, the United States has always taken Germany’s advance for what it really was: an attempt to emancipate itself — at least to some extent — from the US-dominated world energy market and to become a major distribution station in Europe, with the prospect of expanding even beyond that.

A Turn in the Times

This brings us to today’s situation. With the start of the Ukraine war, Nord Stream 2 has been stopped, but Russian gas deliveries continue. The sanctions hit Russia’s economy to the core, and the exclusion from the SWIFT payments system is presented as a “total economic and financial war against Russia.” That’s what France’s economy minister, Bruno Le Maire, called it, though shortly thereafter he distanced himself from this phrasing, saying it did not fit NATO’s “de-escalating strategy.”

There is, however, no record of Le Maire distancing himself from the sanctions themselves. The Russian banks, which mediate the payment transactions for Russian gas, are currently still exempt from this “economic nuclear bomb.” Nevertheless, they are preparing for the possibility of a unilateral supply stop from Russia: higher storage stocks, legal gas reserves, German terminals for liquefied gas, and coal-fired power plants are being built up as a reserve just in case.

These measures are not to be confused with a passive, wait and see approach. Germany is using these reserves to provide itself the necessary legroom in its further interventions against Russia. For the way it deals with Moscow has now changed fundamentally. Until now, Russia’s post-Soviet entry into the world market was used to reduce it to the shabby role of a supplier of raw materials. It provided the cheap materials for the energy system change and, at the same time, for the attack on the US-led world energy market.

Now this relationship has reversed, and Russia’s role as a raw material supplier is now Germany’s means for an economic attack. Because the latter sells its oil, gas, and coal, this is the lever — boycott and embargo — to damage it as fundamentally as possible. Less than forty-eight hours after the start of the war, one could already read about how Germany is mobilizing decisively against the former “strategic partnership” with Putin, also with regard to energy sovereignty.

Once again, this also reveals a contradiction within Europe. When Germany excluded its enemy from the world market, Hungary, Slovakia, and the Czech Republic opposed the embargo in its originally planned form. All three pointed out that they neither have alternatives to Russian oil, nor can they replace the refineries specially adapted to the composition of Russian oil without major investment. Germany’s economic warfare thus also demands the impoverishment of other EU states. They are to be brought into line with the EU Commission’s promise to extend the countries’ transition periods as well as to support the refineries’ conversion. Accordingly, the embargo adopted at the end of May now looks like a compromise between Germany and these states. Pipeline oil, however, is allowed to continue flowing, so the three countries can continue to import Russian oil for an unspecified period. Poland and Germany also receive oil through the pipeline named “Druzhba,” but both have declared that they will stop all imports by the end of 2022.

New Energy Order

Germany needed alternatives and immediately began to examine all options. Within a few days, there was even revived discussion of nuclear power. Leading daily FAZ argued for “realism” about what nuclear power can do: “Germany consumed almost 1,000 terawatt hours (TWh) of natural gas last year, a good half came from Russia. At the same time, the last nuclear power plants generated just under 70 TWh of electricity. All renewables came to 237 TWh, which also shows the dimension of dependence.” To make matters worse, half of all homes cannot be heated with nuclear power, because they are currently equipped with gas-fired boilers.” Nevertheless, “every kilowatt hour can help in the end.”

But there is something more substantial to be taken from this: obviously, it’s about more than heating apartments. Russian gas is now no longer to be a cheap means for an economic attack against the United States, but independence from Russian gas is the means for harming the enemy. Now even technologies can be reactivated, which until now could neither economically nor politically keep up with cheap Russian gas from the East.

So, the list is open. Germany could revoke its ban on fracking, which it enacted “without necessity” (FAZ explained). The potential resources are enormous: “The paper puts the conventional, i.e. previously used, natural-gas resources and reserves at 200 billion cubic meters. In contrast, the recoverable shale gas reaches 320 to 2,030 billion. On average, 800 billion is expected, which is four times the existing reserves.” In fact, much could still be done with fossil fuel production in Germany, if only more investment were made. But that’s exactly what hasn’t happened so far: “The industry is unsettled because fossil fuels are politically and socially outlawed,” says the head of the natural gas and petroleum association BVEG. Politicians are also divided on this issue. The leaders of Germany’s “lignite states,” such as Brandenburg’s minister-president, Dietmar Woidke (a Social-Democrat), have always criticized the early coal phaseout. Foreign minister Annalena Baerbock, of the Greens, also thinks a later phaseout is possible.

‘Peace and freedom in Europe have no price tag,’ foreign minister Baerbock says, and former German president Joachim Gauck calls for ‘freezing for freedom.’

For its part, the United States is offering its own services. Just like his predecessor, Biden is making it clear that his country — and Qatar — are to become the substitute suppliers for Europe. But Habeck is also negotiating with Venezuela and otherwise “probing” the entire planet for Germany’s global political claims. This way Germany uses its energy policy as a weapon: Berlin had assigned Moscow the rank of a mere raw material supplier with conditions profitable for Germany, calling it a “strategic partnership.” Now, this economic role is the basis for an attack on Russia, excluding it from the world market again.

In the meantime, Germany is looking for new suppliers of raw materials that will serve its own anti-American ambitions. In doing so it lands — not entirely without contradiction — precisely with the superpower from whose world energy market it seeks to emancipate itself in the long term. To ensure that this does not mean subordination to US interests, however, it builds its own terminals for liquefied gas “so that we can determine energy supply and energy sovereignty on our own state territory” (as Habeck put it).

Environmental Cost

In addition, the expansion of renewable energies shall proceed even faster: energy sources — based on capital and high-tech — alone guarantee national sovereignty. The fact that nuclear power and liquefied gas are in discussion at the same time comes as a surprise only to those who have always viewed the energy transition with an ecologically interested eye. Those now irritated by this alleged “backsliding” have surely confused the climate effects of the energy transition with its purpose as a political weapon.

The government’s determination to keep its options open — from fracking to nuclear power — is a clear indication that the environmentally minded German public is mistaken to see the energy transition as nothing but a program to save the climate. Another indication is the oft-cited fear that the Chinese government could outstrip Germany in questions of climate-neutral energy supply — a fear that can only be explained by the fact that it is not a matter of doing without fossil fuels around the globe, but rather of competition for the establishment of a new world energy market.

Yet another indication of this are the protests of this critical public itself, namely by Fridays for Future. Their criticism is, on the one hand, that the measures of the “Climate Protection Program 2030” will not stop the climate catastrophe: major tipping points will not be prevented, nature will continue to be exploited, etc. On the other hand, the activists always accuse the German government of failure and demand more determined action. Thus, even the most critical climate activism participates in the ideology that German energy imperialism is simply aimed at saving the planet. Thus, every further step taken by the German state in its competition against other nations is accompanied by cries from its public that all this is not enough.

This is the kind of opposition that the government is happy to put up with — no wonder why it regularly praises young people for their critical engagement. The critical citizen demands that the nation should do “even more” for the climate and, conversely, has much understanding for the impositions of this project, which are presented to him as the costs of climate change and of freedom in general.

“Freezing for Freedom”

Rising heating prices and other costs are the byproduct of this energy policy — even more so with the war in Ukraine. It has long been clear who bears the costs. With the aim of defeating Russia, necessarily the impoverishment of the German domestic population also rises. This isn’t concealed at all: “Peace and freedom in Europe have no price tag,” foreign minister Baerbock says, and former German president Joachim Gauck calls for “freezing for freedom.”

The government is expecting a “new poverty” (as pretty much every one of its leading representatives has said in recent weeks). It must know it, because it is preparing the conditions which necessarily produce this outcome. Accordingly, it promises that people will not be ruined more than necessary. The economy minister also gets good marks from the press because he states “without embellishment” the challenges ahead of us. Foreign policy does indeed come with a price tag — and it’s becoming clear who is having to pay the costs.