The Energy-Political Trilemma Facing Germany

Germany dependence on Russian gas has resulted in Europe’s inability to respond seriously and sanction Moscow in the event of an invasion of Ukraine, leading the leadership of the strongest European economy into a significant trilemma amid a substantial rise in gas prices.

In 2000. 30 percent of Germany’s electricity came from nuclear plants, but the Germans decided to turn to greener alternatives. After the Fukushima disaster in 2011, Germany made the decision to close all nuclear power plants in the country, with the last one expected to cease operations this year. Additionally, due to the desire to reduce carbon dioxide emissions, all coal-fired power plants must be closed by 2038. This development has increased the importance of gas, and since there have never been supply issues and Russian gas is the cheapest, no infrastructure has ever been developed for importing liquefied natural gas from other countries. Today, Germany has no LNG terminal and is the largest buyer of Russian gas in the world. While 40 percent of gas imported into the EU comes from Russia, for Germany, that figure is even higher, exceeding 50 percent. With the end of the nuclear power era and the reduction of coal usage, dependence on (Russian) gas can only increase further.

A potential alleviation of the energy problem was the construction of the Nordstream 2 pipeline, which was completed last year; however, German regulators have yet to grant approval for its use. A complicating factor for the start of operations is definitely the strengthening of the Green Party in Germany, whose members strongly criticize Russian democracy and its approach to human rights, and blocking the project could also be a response in case Russia begins aggression against Ukraine. On the other hand, Germany’s energy dependence on Russian gas has put them in a stalemate. The limitation of gas exports to Eastern Europe this winter has led to a significant rise in gas prices, consequently increasing inflation, and potentially, in the future, social unrest. If Europe decides to intervene significantly in Ukraine, Moscow can use gas as a powerful geopolitical weapon. There are no quick alternatives to Russian gas for Europe, and a reduction in supply would result in further price increases and potentially economic stagnation.

In addition to increasing Russian gas exports to Europe, Nordstream 2 would reduce the importance of existing pipelines that pass through Poland, Belarus, and Ukraine, which would be a significant blow to their budgets (Ukraine earns two billion dollars annually from the pipeline). While this would mean a significant reduction in revenue for them, Russia would suffer less in a potential military conflict in Ukraine because gas exports would not be threatened.

Although Nordstream 2 is officially a private project funded by Russian Gazprom and a consortium of European energy companies and was supposed to provide cheaper heating and electricity to German citizens, it has turned into a very complicated geopolitical game. The U.S. strongly opposes the new pipeline, which would increase Russian influence in Europe and reduce Ukraine’s negotiating power with Russia, and the desire to export its own gas is not negligible. The U.S. has recently become the largest exporter of liquefied gas in the world, and the construction of an LNG terminal in Germany would strengthen their relationship and American influence in Europe.

Germany faces a true energy-political trilemma – they must balance environmental impact, social implications, and security-political factors.