(This article is first in a series on how Russia’s energy policy in Europe aims to constrict European economic activity and control the European grid.)
The Kremlin’s energy policy in Europe is a security threat to the United States and its allies. By building the Nord Stream II pipeline from Russia to Germany, Russia is doubling down on the effort to addict Europe to Russian gas. But the United States will not stand idly by while Putin chains our allies to his pipeline.
Vice President Pence recently remarked that “If Germany persists in building the Nord Stream 2 pipeline, as President Trump said, it could turn Germany’s economy into literally a captive of Russia.” The Trump administration and Congress are ratcheting up pressure to derail Putin’s favorite project, and still ensure energy security for our allies.
German supporters of the project insist that it increases energy security because it diversifies supply. This argument might be plausible had Germany not artificially reduced its diversity of supply through bad policy decisions. With Russian encouragement at every step, the Germans have turned away from the stability of nuclear power and coal. And they have dragged neighbors such as the Czech Republic into the trap.
Putin’s goal always has been to create an energy empire that would dominate Europe. It was a two-pronged strategy: active measures to undermine European energy capacity, and new infrastructure to increase European energy dependence on Russia. The opportunity to siphon off significant funds from the Russian treasury to enrich his inner circle and to sponsor intelligence activities was an added bonus. Furthermore, the money and business opportunities would buy the elites of various European countries to promote Russian energy interests.
Putin found a formidable European advocate in Gerhard Schroeder, the German Chancellor from 1998 to 2005. Schroeder is now the chairman of the board of Nord Stream I and the Russian oil giant Rosneft. In addition, Putin also could rely on an historical cadre of well-trained STASI operatives to influence German policy.
Undermining Energy Diversity: Controlling the Grid
Over the last decade Germany has instituted a draconian energy policy that has disrupted its long-term prospects for stability and diversity of supply. The Germans intend to shut down all nuclear capacity, and already have decommissioned many plants. They have replaced these stable sources of base load power with inherently unstable renewable generation. As a result, the German/European grid has been destabilized, and the Western nuclear industry has been weakened immeasurably.
Germany is making its energy mix even riskier by phasing out coal power through strict environmental regulations. In short, Germany has done everything it can to drive itself toward Russian gas by shutting down base load nuclear and coal capacities and investing in intermittent renewables. German reliance on Russian gas to fuel its economy and manage the power grid gives Putin control over the entire European power sector.
President Trump and Vice President Pence are right to oppose this dangerous policy. They should lean heavily on allies to resist Putin’s creeping embrace.
Next: A case study of the Czech Republic: Rosatom, Westinghouse, and the Matryoshka dolls of Gazprom ownership.