In an interview with Germany’s Bild am Sonntag, published on Sunday, Klaus Muller, the President of the national energy regulator said that Germany’s natural gas reserves are not enough to see the country through next winter without purchasing additional Russian gas.
German government officials and industry representatives have repeatedly warned that a stoppage of Russian gas supplies would deal a huge blow to the economy.
In late June, Economy Minister Robert Habeck activated the second phase of Germany’s three-stage emergency gas plan. It came as Russia slashed supplies via the Nord Stream 1 pipeline, blaming the lack of a turbine, stuck in Canada due to sanctions.
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Recently, Russia began regular maintenance work on the pipeline, meaning no gas was flowing to Germany at all.
Also in recent weeks, Berlin asked Ottawa to exempt the piece of equipment cited by Moscow as the reason for falling supplies.
Europe’s largest economy is heavily reliant on Russian gas: but it’s hard for Germany to break the habit. Russia has been Germany’s natural-gas supplier for about 50 years and it has always been reliable, even during the Cold War and throughout the collapse of the Soviet Union, Davide Oneglia, a senior economist at London-based consultancy TS Lombard, told Insider.
Germany started importing Russian gas to promote dialogue, trade, and peace.
Germany started its Russian gas policy during the Cold War in the 1960s with the so-called Pipelinepolitik policy that connected both sides with a gas pipeline. The move aimed to incentivize the Soviet Union to move toward dialogue and trade with the West instead of conflict, said Henning Gloystein, the director of energy, climate, and resources at Eurasia Group, a geopolitical consultancy.
On Sunday 1 February 1970, senior politicians and gas executives from Germany and the Soviet Union gathered at the upmarket Hotel Kaiserhof in Essen.
They were there to celebrate the signing of a contract for the first major Russia-Germany gas pipeline, which was to run from Siberia to the West German border at Marktredwitz in Bavaria. The contract was the result of nine months of intense bargaining over the price of the gas, the cost of 1.2m tonnes of German pipes to be sold to Russia, and the credit terms offered to Moscow by a consortium of 17 German banks.
Aware of the risk of Russia defaulting, the German banks’ chief financial negotiator, Friedrich Wilhelm Christians, took the precaution of asking for a loan from the federal government, explaining: “I don’t do any somersaults without a net, especially not on a trapeze.”
The relationship would benefit both sides: Germany would supply the machines and high-quality industrial goods; Russia would provide the raw material to fuel German industry. High-pressure pipelines and their supporting infrastructure hold the potential to bind countries together, since they require trust, cooperation and mutual dependence.
But this was not just a commercial deal, as the presence at the hotel of the German economic minister Karl Schiller showed. For the advocates of Ostpolitik – the new “eastern policy” of rapprochement towards the Soviet Union and its allies including East Germany, launched the previous year under chancellor Willy Brandt – this was a moment of supreme political consequence. Schiller, an economist by training, was to describe it as part of an effort at “political and human normalisation with our Eastern neighbours”.
The sentiment was laudable, but for some observers it was a potentially dangerous move. Before the signing, Nato had discreetly written to the German economics ministry to inquire about the security implications. Norbert Plesser, head of the gas department at the ministry, had assured Nato that there was no cause for alarm: Germany would never rely on Russia for even 10% of its gas supplies.
Half a century later, in 2020, with the cold war gone, Russia would supply more than half of Germany’s natural gas (It accounted for 55% of Germany’s gas imports in 2021 and 40% of its gas imports in the first quarter of 2022, Reuters reported) and about a third of all the oil that Germans burned to heat homes, power factories and fuel vehicles. Roughly half of Germany’s coal imports, which are essential to its steel manufacturing, came from Russia.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
