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    Germany Held 'Captive' by Russian Gas: Trump

Summary

US president Donald Trump has started a visit to Europe by criticising Germany's level of dependency on Russian gas imports but his numbers, according to NGW, do not match the rhetoric.

by: Mark Smedley

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Natural Gas News, Americas, Europe, Premium, Political, Ministries, Baltic Focus, Nord Stream Pipeline, Nord Stream 2, News By Country, Germany, Poland, Russia, Ukraine, United States

Germany Held 'Captive' by Russian Gas: Trump

The US president Donald Trump has started a visit to Europe by criticising Germany's dependency on Russian gas imports, and implied it may be linked to its relatively low defence spending.

"Germany will have almost 70% of their country controlled by Russia with natural gas, so you tell me – is that appropriate?" he asked at a July 11 breakfast meeting with Nato secretary general Jens Stoltenberg, according to the BBC. "Germany is a captive of Russia," he added according to CNN, making "billions of dollars" in energy payments to Moscow.

"Germany is totally controlled by Russia because they will be getting from 60% to 70% of their energy from Russia, and a new pipeline, and you tell me if that's appropriate because I think it's not and I think it's a very bad thing for Nato," added Trump according to news media including the BBC and CNBC. 

The new pipeline to which Trump refers is the Nord-Stream 2 project, which Poland is trying to block and which Denmark must yet choose whether it wants it rerouted or not for reasons of security. If built, it would double the existing capacity to flow Russian gas direct to Germany, beneath the Baltic, from 55bn to 110bn m3/yr, increasing the likelihood that Gazprom would cut the amount of gas it transits across Ukraine by another 55bn m³/yr.

German chancellor Angela Merkel and EU officials have sought to get guarantees from the Kremlin that some Gazprom exports will continue to transit Ukraine, so far without any definitive success.

But is Trump correct when he says almost 70% of Germany's energy comes from – or will come from – Russia? 

The short answer is No. In terms of primary energy, quite a big proportion of its nuclear and renewable electricity power production is home-grown.

German imports of Russian oil and coal are significant but nearer one-third to two-fifths of its total supply, with lots of alternative sources. German refiners' association MWV said Russia was the largest supplier, accounting for 39.5% of Germany's crude oil imports in 2016.

So what about natural gas?

Looking simply at natural gas, Germany consumed about 90bn m3 in 2017 according to the latest BP Statistical Review of World Energy. Of that, 48.5bn m3 was imported from Russia, 25.7bn m3 from Norway and 20.2bn m3 from the Netherlands – but a large proportion of those imports were re-exported to countries like Ukraine, including almost certainly some of the volumes coming from Russia. Germany produced 6.4bn m3 of its own gas supplies itself. So almost certainly less than half of Germany's gas supply came from Russia, even in a year when Gazprom substantially increased its exports to Europe.

Indigenous supplies from the Netherlands to Germany are set to decline to zero during the 2020s, as the Dutch Groningen field declines, but this trade flow may be made up with imports of LNG. Indeed Germany itself is considering a new LNG import terminal at Brunsbuttel, on the North Sea coast.

But development of a second Nord Stream line could raise the likelihood of Germany's reliance on Russian gas increasing to over 50% – and maybe as much as 60-70% – if left unchecked.  The views of German gas industry leaders suggest that may be on their agenda, given how they accuse US politicians of trying to hard-sell US LNG into Europe, and given their determination financially to support NS2 construction. So a 'maybe' for Trump on future Russian gas into Germany — but with the proviso that it will remain a major importer of Norwegian gas too.

However Trump has made no friends abroad by hiking US tariffs on steel and aluminium imports from the EU, China, Canada and Mexico – something his counterparts will tell him this week, even if some German politicians agree that its spending of 1.1% of its GDP on defence in 2015 is lower than the Nato advised minimum of 2%.