Germany’s Dependence on Russian Gas Is Hard to Break

LUBMIN, Germany – Next to a nudist beach and a sleepy marina, a huge network of metallic pipes rises from the pine forest behind the small village of Lubmin on Germany’s Baltic coast.

If few have heard of Lubmin, many from Berlin to Washington know the names of two gas pipelines that run here directly from Russia: the Nord Stream 1 hum, which carries around 60 million cubic meters of natural gas a year to protect Europe’s largest economy. And Nord Stream 2 was built to boost that flow, but was shut down abruptly before Russia’s attack on Ukraine.

The pipeline pair has become the twin symbol of Germany’s dangerous dependence on Russian gas and the country’s belated and frantic effort to dissuade it. Growing call for European Union to hit Moscow with tougher sanctions Atrocities unfolded in Ukraine.

Tuesday, The European Commission, the EU’s executive body, has proposed banning the import of Russian coal and possibly soon its oil.. But much more critical to Germany and the rest of Europe, Russian gas was off the table. At least for now.

“We depend on them,” said Axel Vogt, mayor of Lubmin, whose population is just 2,119, as he stood in the industrial port between the two pipelines last morning. “None of us dreamed that Russia would go to war. Now Russia is one of our main gas suppliers and this is not something we can change overnight.”

This dependence on Russia, which accounts for more than a quarter of Germany’s total energy use, has meant that Berlin has so far refused to interrupt President Vladimir V. Putin, whose war he has effectively subsidized for around 200m euros. or about $220 million in energy payments each day.

Images of mass graves and murdered civilians in the Ukrainian town of Bucha horrified Europe and sparked demands for a Russian energy embargo, particularly among Germany’s eastern neighbors.

“Buying Russian oil and gas finances war crimes,” said Gabrielius Landsbergis, Lithuanian foreign minister, who has stopped all gas imports from Russia. “Dear EU friends, pull the plug. Don’t be an accomplice.”

German Chancellor Olaf Scholz reacted quickly to the footage from Bucha, denouncing “war crimes committed by the Russian military” and expelling 40 Russian diplomats and promising new and tougher sanctions on Moscow. Germany’s grid regulator has gone so far as to take over the German subsidiary of Gazprom, which owns Russia’s main gas company and Nord Stream.

But government ministers have rejected the ban on gas imports from Russia for now. The reasons are clear.

For years, Berlin happily relied on Moscow for more than half of its gas imports, a third of its oil and half of its hard coal imports, and ignored warnings from the United States and other allies that Russia was arming its energy supplies. One in every two German homes is heated by gas, and gas powers much of Germany’s lauded export industry.

It won’t be easy in the short run to break this habit before it comes as a shock to a German economy that is still recovering from the pandemic like others in Europe.

“Our strategy is to become independent of Russian gas, coal and oil – but not immediately,” said German Economy Minister and Deputy Chancellor Robert Habeck, while busy traveling to Qatar and Washington in search of alternative gas contracts.

The government is taking steps to make Germany independent of Russian coal by the summer and Russian oil by the end of the year. Currently, the share of oil imports from Russia has fallen to 20 percent, and Russia’s coal imports have been cut by half.

But gas, with Germany’s goal of a carbon-neutral economy by 2045, is a completely different matter. Mr Habeck and others said it would take at least two years to become independent of the Russian supply.

“We cannot substitute gas in the short term,” said finance minister Christian Lindner. “We hurt ourselves more than they do.”

Under former Chancellor Angela Merkel, Germany had committed to phasing out nuclear power, making the country more dependent on Russia than before. The legacy of this decision can also be seen in Lubmin.

Behind the glowing pipelines is the outline of a shut down nuclear power plant, once the largest in Communist East Germany. The same year Ms Merkel celebrated the inauguration of Nord Stream 2, Germany announced that it would phase out nuclear power. The last three nuclear power plants are scheduled to go off the grid this year.

“This was a huge mistake and it is more evident than ever in light of what is happening now,” said the mayor, Mr Vogt.

Even before Russia’s attack on Ukraine, Mr. Scholz’s new coalition’s plans to simultaneously phase out nuclear power and coal and transform Germany into a carbon-neutral economy seemed ambitious.

Now, even Greens and politicians like Mr. Habeck are exploring what it takes to keep the last nuclear plants running longer. Some worry that the 2030 date may also need to be pushed back to shut down the last coal plants.

But pressure is mounting for Russia’s rapid exit from fossil fuels, even in Germany, with some claiming to date back to its own genocidal history, Germany’s moral obligation that outstripped economic concerns.

“The country that proudly declares that Europe will ‘never see’ the likes of Auschwitz ‘never again’ is pumping 200m euros into Putin’s war chest every day,” financial newspaper Handelsblatt wrote in an editorial. “The debate in Germany about whether our economy will grow by 6 percent or 3 percent in the event of an energy embargo suddenly seems trivial and unimportant. We are like the Kremlin hostage.”

Russia’s war against Ukraine was a wake-up call for Germany, which for decades had been betting with Moscow that trade and economic interdependence would keep peace in Europe.

However, a few days after the invasion, Mr. Scholz vowed to break with the energy policy of Ms. Merkel and her predecessor Gerhard Schröder, who still sits on the board of the Russian oil company Rosneft and chairs Nord Stream 2’s shareholder committee.

The mayor of Lubmin, Mr Vogt, remembers hosting Ms Merkel and Mr Schroeder in 2011. They had come with the then Russian President Dmitri Medvedev to open the gas tap. “This gas pipeline will make Europe’s energy supply significantly safer,” Mr. Schröder said at the time.

In February, after Mr Scholz suspended Nord Stream 2, Mr Medvedev, now deputy chairman of Russia’s national security council, said on Twitter: “Welcome to a new world where Europeans will soon pay 2,000 euros for 1,000 cubic meters of gas. ”

Petra Krüger, a 57-year-old radiologist and mother of two, said she was worried about rising energy costs as she walked along the beach and crossed pipelines in Lubmin this past morning and that it now only heats up in the afternoons. She remembered the excitement in the village when the original Nord Stream pipeline was built after years of industrial decline.

“The community felt like it had won that long-term lifeline,” he recalled.

“We’ve all been deceived,” he added. “We should never have allowed ourselves to become so dependent on ourselves. Scary.”

Rising energy costs, not only in Germany but also in Europe, have raised questions about who will suffer more from Russia’s energy embargo – Mr. Putin or the West?

Some argue that Germany should cut gas ties first.

“We must act before Putin does,” said Roderich Kiesewetter, a conservative MP and member of the German Parliament’s foreign affairs committee.

The possibility of Mr. Putin turning off the gas tap is a scenario actively prepared by the German government. Last week, Mr. Habeck set in motion the first step of a national gas contingency plan that could eventually lead to the apportionment of natural gas.

Every day, a crisis team of government representatives, regulators and the private sector meets to monitor gas supplies. If they begin to decline, the government will intervene to begin rationing natural gas supplies. Household and critical utilities, including hospitals and emergency services, will be prioritized by industry, according to a planning document.

Only Nord Stream is not controlled by Russia. So is Germany’s and Western Europe’s largest gas storage facility, which was taken over by Gazprom along with others in 2015. Watching a strategic move by Moscow, German officials say some of these facilities have been drastically reduced.

“We must increase precautionary measures to be prepared for an escalation by Russia,” Economy Minister Habeck said, urging German consumers and companies to strive to reduce their energy use wherever possible.

“Every kilowatt hour counts,” he said.

But there are already concerns that Germany will change from one dependency to another.

In the long run, the strategy is to accelerate Germany’s transition to renewable energies – or “freedom energies” as the finance minister calls it. However, 95 percent of solar cells and 85 percent of solar modules are made in China.

“If Russia and China unite against us right now, they can flatten us,” said Gunter Erfurt, CEO of Meyer Burger, the only European company currently producing solar modules with its own solar cells. “We need to bring solar power generation back to Europe. Europe needs to diversify and be fast.”

Christopher F. Schuetze Contributed to reporting from Berlin.

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