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Wonder why Russia has Europe over a barrel? Ask German environmentalists.
It is said that Vladimir Lenin once called Soviet sympathizers in Western countries “useful idiots” for unwittingly advancing the cause of revolutionary Russia. Were the Bolshevik leader alive today, he might apply the same label to German environmentalists, whose influence over their country’s energy policy has been an inadvertent, but essential factor in Moscow’s post-Cold War rise.
Two decades of stringent environmental regulations have made Germany, Europe’s largest economy, increasingly dependent on natural gas from Russia, the world’s largest exporter. Of course, economic leverage translates seamlessly into political power, and Russia’s sway over German foreign policy has been conspicuous as the recent imbroglio in Georgia has continued to play out.
In fact, Germany has the means to power its economy without Russian natural gas, so energy dependence is unnecessary. For starters, it is home to the largest reserves of coal in Europe. But thanks to the European Union’s marquee climate-change mitigation policy—the continent-wide Emission Trading Scheme—the economics of power production have shifted decidedly against coal because its combustion releases the most greenhouse gases of any conventional fuel source.
Given that coal is currently taboo, Germany could meet its energy needs by expanding the use of nuclear energy, which emits no carbon dioxide when used to generate electricity. Yet the environmental movement in Germany opposes nuclear energy because its waste is difficult and dangerous to store. In 2000, environmentalists won passage of the Nuclear Exit Law, which commits German utilities to phasing out nuclear power by 2020.
Rather than coal or nuclear, the environmental movement prefers sustainable sources of power such as wind and solar, and it has convinced the German government to grant generous subsidies to the renewable energy industry. But despite these investments, renewables are still too costly to displace conventional energy sources, which is why wind and solar power account for less than 2 percent of Germany’s primary energy production, according to government figures.
That leaves natural gas, which is cleaner than coal and less expensive than alternative energy. Germany is fortunate to have large deposits of gas—more than 9 trillion cubic feet—most of which is thought to lie beneath the northwestern state of Niedersachsen. Environmental regulations, however, have limited exploration and development in the region.
To meet its demand for energy, Germany turned to Gazprom, a state-owned company that has a legal monopoly on natural gas exports from Russia. Natural gas currently accounts for almost a quarter of all the energy consumed in Germany, including all electricity in homes, gasoline in cars, and coal for industrial boilers. That’s up 40 percent since 1991. And Gazprom now supplies 40 percent of all natural gas consumption in Germany, an increase of 55 percent over the same period.
Currently, almost 40 percent of Germany’s domestic gas consumption comes from Russia. That share is likely to increase with the construction of the Northern Pipeline, a project to be completed in 2010 that would link Russian gas directly to Central European markets.
It’s little wonder, then, that German Chancellor Angela Merkel was the first major world leader to pay a visit to new Russian President Dmitry Medvedev. Or that at last spring’s NATO summit in Romania, German diplomats orchestrated the opposition to U.S. President George W. Bush’s plan for expanding the trans-Atlantic military alliance to include Georgia and Ukraine. Before the summit, Russian officials had warned that NATO expansion would cause a “deep crisis,” and provoke a “response” from Russia.
Then, last week in St. Petersburg, Merkel became the first Western leader to restore close bilateral ties with Russia after the August conflict in Georgia. Not coincidentally, Merkel’s trip to Russia came at the same time that a major gas deal was signed between Gazprom and E.On, the German gas giant.
Merkel has been outspoken as the Kremlin has demonstrated a seeming willingness to use Russia’s energy resources as a cudgel in interstate disputes. As winter approached a year ago, Gazprom threatened to cut gas supplies to Ukraine after the pro-Russia candidate lost a major election. The timing of the warning was widely interpreted as a thinly veiled threat. So was the decision by Transneft, a state-owned pipeline company that has a monopoly on oil exports from Russia, to precipitously cut supplies to the Czech Republic last July after that country signed a deal with the United States to host radar technology as part of a global missile shield—a policy strenuously opposed by Moscow.
But actions speak louder than words, and Medvedev and his mentor, Prime Minister Vladimir Putin, are no doubt paying more attention to what Germany’s leader does than what she says.
Domestic opposition to the Northern Pipeline has grown recently, and a debate has started on the future of coal in Germany. For the foreseeable future, however, Germany’s foreign policy will be beholden to its energy dependence on Russia. And for that, we have the environmental movement to thank.
William Yeatman is an energy policy analyst at the Competitive Enterprise Institute, a Washington-based think tank.