Friend or foe? Dilemmas in Russian-German relations
‘Alexei Navalny is the victim of a crime’ claimed Angela Merkel, referring to the Russian opposition leader recently poisoned by a chemical nerve agent of the Novichok group. Mrs. Merkel has not only urged Kremlin to explain itself, but has even successfully called for EU-wide sanctions on Russian officials associated with the failed assassination (Mr. Navalny has since recovered in a German Hospital from the coma induced by the nerve agent).
At the same time, Berlin has been criticized for continuing to collaborate with the Russian Gazprom company on the construction of the Nord Stream 2 pipeline. Already 97% completed, the Nord-Stream 2 project is set to double the capacity of natural gas transported through the Baltic Sea, from Russia, to Germany, and from there to other European countries. This calls into question a paradox of German-Russian relations: despite the serious threats of sanctions and retaliation, Germany continues to fund the Kremlin through significant gas and oil imports, even at the risk of its own energy security.
What is energy security, anyway?
The International Energy Association (IEA), an intergovernmental organization, defines energy security as the ‘uninterrupted availability of energy sources at an affordable price’ and the making of ‘timely investments to supply energy in line with economic developments and environmental needs’. Germany’s energy reserves and relatively diverse and competitive market ensure security in the short term. In the long term, however, Germany shows a worrying trend of bad investments.
Not so Green Germany?
Despite significant investments in greener technologies, mineral oil is still the largest energy source in Germany. Domestic oil production is negligible, as 98% is imported, with 36% from Russia. This should be particularly concerning for European officials wary of the expansion of Russian influence, as oil exports are one of the largest sources of revenue for the Russian economy, and possibly one of the reasons for which Putin’s regime has maintained popularity among Russians. The Kremlin is dependent on the high European demand for energy. In 2017, fossil fuels accounted for 63.2% of exports and more than a third of federal revenue. Germany and the EU are seen as staunch critics of the Kremlin’s actions, yet by further endorsing projects such as Nord-Stream 2, they are the largest financial sponsors of the Russian state.
Natural gas, the second largest energy source, provides the same political issues. According to the Federal Institute for Geosciences and Natural Resources, Germany’s gas imports account for 94% of its consumption. Furthermore, the Federal Office for Economic Affairs and Export Control reports that out of the 5,419 petajoules (PJ) of natural gas imported in 2015 (the last year for which exact data is known), more than a third comes from Russia, followed closely by the Netherlands and Norway. In addition, while German demand for natural gas is predicted to grow in the future, domestic gas production is set to diminish significantly in the coming years, as will imports from the Netherlands. This leaves little room for improving energy security in Germany through reliable energy providers. Nonetheless, natural gas is significantly greener than oil, so it should remain a significant part of Germany’s energy supply, provided that Russia can be avoided.
Renewable energy is the third biggest source of German energy. In the last decade, subsidies for wind turbines and solar plants have determined a large increase in the power generated by renewables, but the overall impact on the environment has not changed as much. In fact, the electricity costs for households rose up by 50% in the same period of time. French households pay less than German households, and are at the same time causing less of an environmental impact. Long-term investments have to take into consideration that renewables are dependent on weather conditions and therefore produce power at irregular rates. Electrical grids cannot rely solely on renewable sources of power. In the future such disadvantages could be minimised as better batteries and energy storage facilities will be developed. For now, more traditional energy sources have to be used in conjunction with renewables. Furthermore, renewables also face similar political dilemmas, as green technologies are mainly supplied by Chinese companies.
Is there any way forward?
What could Mrs. Merkel do to improve German energy security in the long term? To make it greener, the German chancellor should of course continue to invest in renewables. This, however, begs the question: until sufficiently efficient and affordable batteries are developed, what should renewables be complemented with? As oil is a significant environmental hazard, natural gas seems the lesser of two evils. However, this entails more Russian gas, which is politically inconvenient. A proposed alternative would be American liquefied petroleum gas (LPG). Unfortunately, it is expensive. If all fees for shipping, liquefaction, and gasification are included in the price of American LPG, then it exceeds $6 per MMBTU (a measure of heat energy found in fuels). Meanwhile, Russian gas is sold at around $5 per MMBTU. If Mrs. Merkel would also want to keep costs down, then combining renewables with American LPG would not be suitable.
The True ‘Nuclear’ option
It might seem as if Mrs. Merkel has no alternative to the current situation. If Germany wants to create a green and affordable future, then Russian gas has to play a role in its future. This ignores a great possibility: nuclear energy. It is green, affordable and because of its reliability, it can effectively complement renewables. Furthermore, contrary to popular opinion based on very rare disasters such as Chernobyl and Fukushima, nuclear energy is very safe. The ‘Our World in Data’ (OWID) scientific publication has analysed direct and indirect deaths estimated to have been caused by radiation or emergency displacement caused by nuclear energy, and compared it with the negative side effects of other energy sources. While the study found no significant differences in the number of casualties caused by renewables or nuclear energy, it showed that switching from oil and gas to nuclear power would eliminate most greenhouse gas emissions and thereby reduce fatalities by more than 99%. Furthermore, a model developed by the National Bureau of Economic Research has shown that the phasing-out of nuclear energy in Germany has promoted a rise in the use of fossil fuels equal to 1,100 deaths each year.
Due to the unpopularity of nuclear power, Germany is in the process of phasing it out completely by 2022. However, if someone were capable of convincing the public of the safety and efficiency of nuclear power, that would be Mrs. Merkel — a senior politician with a doctorate in quantum chemistry.
What about Nord-Stream 2?
If Mrs. Merkel opts for more nuclear energy, will she be able to give up on the Nord-Stream 2? And more importantly, should she? As Bundestag members have recently suggested in a failed motion against the pipeline, economic reasons will probably force her to continue the project. Cancelling would entail huge costs not just for Gazprom and Russia, but also to European companies and investors involved. Refusing to use Russian gas could also mean forgoing future hopes of Russian liberalization: some still argue that Russia could be forced to democratize in order to have better access to European markets. However, if the last economic connection between the two is broken, Russia might instead opt for other consumers. Rapidly growing China would not hesitate to make business with Russia. Nonetheless, a resurgence of nuclear power in Germany would greatly improve energy security and minimize the need for future Russian fossil fuels. The best way to achieve Germany’s goal of green and affordable energy is maintaining renewables and endorsing nuclear power. Even though it might not be an easy decision, the social costs on German society might make nuclear energy an imperative.
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