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Tuesday, December 06, 2022

Opinion: Angela Merkel’s dubious energy legacy haunts and divides Germany as tensions over Ukraine rise

Germany is the weak link in the Western effort to hit Russia with a tough array of sanctions if it invades Ukraine. How did that happen?

Blame Angela Merkel.

The former chancellor who led the German government for 16 years until her retirement in December, always took a pragmatic, not ideological, approach to ties with Russia and Vladimir Putin, its President. She wanted Russian natural gas and received it in abundance, to the point Germany became dependent on Russian energy to power its economy, Europe’s largest.

At the same time, she abandoned Germany’s nuclear program and agreed to phase out its coal burners so the country could meet its net-zero greenhouse gas emissions goals. Not by 2050 or 2060, as many wealthy and developing countries have pledged, but by 2045, a goal that seems increasingly difficult to achieve.

Earlier this month, Robert Habeck, Germany’s new Climate Minister and a member of the Green party, said the country faces a “gigantic” task ending its reliance on fossil fuels. He predicted the interim goal of reducing emissions by 65 per cent from their 1990 level by 2030 will be missed by a wide margin.

About 40 per cent of Europe’s imported gas comes from Russia. In Germany, the figure is in the 50- to 75-per-cent range, up from 35 per cent in 2015. That portion could rise because Germany is closing the last three of its 17 nuclear reactors by the end of this year. With domestic gas production small and falling, Germany has made itself a slave to Russian gas as nuclear energy disappears from the mix.

Ms. Merkel, a Christian Democrat, is not entirely to blame for having handed Germany’s energy future to the Kremlin. It was her predecessor, Gerhard Schroeder, the Social Democrat chancellor from 1998 to 2005, who started the process.

During his first term, Mr. Schroeder decided Germany should phase out nuclear power, even though some of the country’s nuclear plants were fairly modern. His dependence on the anti-nuclear Greens, who were part of his coalition government, was no doubt behind the decision to kill off the nuclear industry well before renewable power could take up the slack – it still can’t.

Russia and Europe risk mutually assured destruction in a natural gas war

At the same time, he developed close ties with Mr. Putin, who became Russian President for the first time in 2000. Within a few years, a strategic energy partnership was formed between the two countries.

In 2004, Mr. Schroeder called Mr. Putin a “flawless democrat” and, shortly before the German election a year later, Germany and Russia announced the launch of the Nord Stream pipeline project that would deliver gas from Russia to Germany through the Baltic Sea, bypassing Ukraine. After Mr. Schroeder lost to Ms. Merkel, he joined the board of directors of the pipeline, now known as Nord Stream 1.

Ms. Merkel was initially critical of her predecessor’s energy policies – she called his decision to kill off the nuclear plants the “destruction of national property” – and his coddling of Mr. Putin. She actually reversed Mr. Schroeder’s decision and extended the operating life of the nukes by many years.

Then came the 2011 Fukushima nuclear catastrophe in Japan, and Ms. Merkel quickly reversed her reversal. Germany’s nuclear fleet would be gone by 2022 even though the reactors had operated safely for decades and had been supplying almost a third of the country’s electricity without spewing out greenhouse gases.

A few years later, even after Russia annexed Crimea in 2014, her government endorsed the doubling of the Nord Stream pipeline at the cost of US$11-billion, handing Germany (or so she thought) an endlessly reliable source of gas. Ms. Merkel conveniently ignored the criticism, especially from the Americans, that Russia could use the second pipeline, Nord Stream 2, as a political weapon. Her apparent belief was that geopolitics and economics could inhabit separate worlds.

She was wrong. Today, Nord Stream 2, which has been completed but is not delivering gas because its operation has not been approved by German regulators, is at the very center of the Western debate on how to punish Russia if it invades Ukraine. If Russia does, the pipeline may never open for business.

German Foreign Minister Annalena Baerbock this week said the pipeline was part of a sanctions package under discussion with European and American allies, though German politicians are divided on any sanctions that might cut Russian gas exports.

Germany’s energy policies under Mr. Schroeder and Ms. Merkel – who both pandered to the Greens and to Russia, in essence – have turned into an unalloyed disaster for Germany.

They have made Germany overly reliant on one fuel – gas – from a country that could weaponize that fuel if tensions over Ukraine reach a breaking point. If the Nord Stream 2 pipeline is not approved, or if Russia is hit with savage trade and financial sanctions, Mr. Putin may reduce or even eliminate gas exports to Europe. He has already been accused of reducing potential supplies, raising prices to painful levels.

At the same time, the shutdown of the nuclear plants has made Germany more dependent than ever before on Russian gas and the remaining German coal burners, jeopardizing the country’s ability to meet its net-zero commitments. If the new German government were smart, it would try to fix Ms. Merkel’s dubious energy legacy by giving new life to the country’s nuclear plants, whether the Greens like it or not.

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