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Putin's Cold War

Germany's Energy 'Wake-Up Call'

By Frank Dohmen, Alexander Jung, Wolfgang Reuter and Hans-Jürgen Schlamp

Russia's gas conflict with Ukraine has revived a debate over the German energy supply. Dependence on oil and gas is rising, both coal and atomic energy are limited, and alternative energy sources can't pull up the slack. How vulnerable is Germany to energy shortages and Russia's political capriciousness?

Energy managers at the Essen headquarters of Ruhrgas, a subsidiary of E.on and Germany's largest gas importer, played out crisis scenarios: What would they do if the break in gas supply didn't end? How many days would their reserves last? And where could they find so-and-so many millions of cubic meters of natural gas in a matter of weeks?

This was no test: It was the real thing. Hour by hour, technicians nervously watched as pressure fell in German pipelines after the Russian monopoly Gazprom shut off natural gas taps for Ukraine on Jan. 1. The sudden decision in Moscow sent ripples of panic across Europe, and spot-market prices for gas climbed to unanticipated levels -- until the Russians gave in and repressurized the pipes.

Soon, Ruhrgas gave the all-clear. The gas supply was secure again, and the message of the day was: Don't worry. Everything's OK.

But the fact is that nothing is OK. Ukraine and Russia may have put their natural-gas dispute behind them, but in Germany the debate has just started. The cold-blooded way the Russians used their natural resource as a blackmail tool has made a lot of Germans realize, suddenly, just how vulnerable the national energy supply is -– and how dependent they are on the good graces of foreign suppliers.

Germany's energy consumption has grown quickly in recent years; the nation now imports roughly three-fourths of its fuel resources. Almost every liter of petroleum used in Germany comes from abroad (97 percent), and the national demand for foreign coal and natural gas has also grown. Roughly 83 percent of the gas used by Germans comes from abroad, and the imported fraction of coal used here has risen to over 60 percent -- up from 18 percent only 10 years ago.

A natural resources superpower

Of course, German utility firms do business with a number of different international suppliers. But one stands out: Russia is easily Germany's biggest supplier of natural gas, bigger than Norway or the Netherlands. The largest nation in the world also leads oil exports: Russia sells 10 times more petroleum to Germany than Saudi Arabia. Germans increasingly buy coal from Russia, too -- imports have multiplied ten-fold in five years. Russia has assumed third place in the world, after South Africa and Poland, for coal exports, and third place for exports of Uranium 235, the fourth most important fossil fuel. Russia, in other words, is a natural resources superpower.

And Germans survive on an IV drip. No other western European nation is quite so thoroughly under the former Soviet Union's sway as Germany. Politicians wonder how long things can continue to be "OK" when the nation is so reliant on an increasingly authoritarian regime. And, above all, do they have any choice?

All of official Berlin seems to have gone hunting for a "new mix" of energy sources. Everyone agrees it should be broader and more well-balanced –- tilted away from reliance on both fossil fuels and supplies from the east. An energy expert from the left-leaning Social Democratic Party (SPD), Hermann Scheer, sees the new energy debate as a clear signal in favor of renewable energy sources. "It's a wake-up call," he says.

On the other hand, Germany's economics minister, Michael Glos, from the right-leaning Christian Social Union, took the opportunity to rekindle the debate over nuclear power. Germany is the only industrialized nation with a (very popular) plan to phase out its nuclear energy program. The country intends to abandon nuclear power by about 2020, when the last German reactor is expected to finish its mandated 32-year lifespan. Glos wondered aloud if it wasn't time to "go back and think again" about extending the legal operating periods of Germany's nuclear power plants until he was whistled back to the bench by Chancellor Angela Merkel.

For years, of course, politicians have talked about re-jiggering German energy policy. Helmut Schmidt's cabinet gave up on the last platform of bright ideas in 1980. Since then, no German government has dared to lay out a complete and decisive strategy to answer the most pressing questions.

For example: What if the world's oil supply peaks in a few years? Can Germany really give up nuclear power? Would a coal renaissance make sense? And how can Germany spark real competition in its domestic energy markets?

These are the delicate questions raised here by the Ukraine crisis. Besides, Germany's growing dependency on Russian natural gas is only one example of the plight of German energy politics.