U.S. Analyst: Germany funds Putin’s war with energy payments that dwarf its defense aid to Ukraine.
BERLIN — Germany’s reliance on Russian gas and oil is indirectly enabling the war in Ukraine, says Christo Artusio, former director of the U.S. State Department’s Office of Global Change. Germany receives over half its natural gas from a Russian pipeline, which helps fuel its competitive industrial economy. It has few alternate energy source solutions and cannot afford to alienate Russia by taking more aggressive measures, he said.
“Germany is in a very difficult situation where they’re trying to figure out how they wean off of an energy source from a dictator that they never should have started buying from in the first place,” said Artusio, 48, in an interview this week in Berlin.
Artusio has represented the United States in global climate negotiations, including attending the 2015 Paris Climate Accord negotiations under the Obama administration. Currently, he lives in Ukraine as a private strategy advisor, but is residing in Berlin with his wife due to the war.
He discussed the unintended consequences of Germany’s energy imports on the Russia-Ukraine war.
Q: Germany has been reliant on Russian natural gas for decades, since the first pipeline contract was established in 1970. Why does Germany’s dependence on Russian energy pose such a dilemma now, in 2022?
A: Germany has a need to provide electricity to its residents and power to its industry at competitive rates. While that’s an understandable need, procuring that energy from Russia, particularly in today’s context is profoundly problematic. Russia is prosecuting its war in Ukraine funded principally by revenues from the sale of oil and gas to the rest of the world. Germany and Europe constitute a pretty significant portion of their sales.
Q: We often use the phrase “put your money where your mouth is” when talking about how we support different people, groups, or even governments. In this case, how is a dependence on Russian energy contributing to the war in Ukraine?
A: In the case of the United States, the Biden administration took a very brave stance early in the war to forego Russian energy supplies. The U.S. had a much smaller percentage of total energy imports than Germany, but I think that the Biden administration immediately recognized that it would be inconsistent to provide billions of taxpayer dollars for Ukrainian refugees and defense at the same time as paying Russia for gas and oil. In Germany, they have a much harder situation because they’re reliant on Russia for a much greater part of their energy needs.
Europe as a whole provides as much as a billion dollars a day to Russia. It’s obvious that the majority of that is going to fund their war in Ukraine. Then on the other hand, Europe is only giving Ukraine a couple of billion dollars a month. That doesn’t equal out. Although that wasn’t Europe’s objective to begin with, they are providing more than ten times as much money to support Russia as they are to support Ukraine.
Q: In 2020, clean energy such as wind, solar, biomass, and hydroelectric power constituted 46% of Germany’s energy consumption. Why is Germany having such a hard time weaning off of gas imports from Russia?
A: Gas is used as a baseload power for electricity. For example, on a sunny and windy day, Germany is probably getting 75–80% of its electricity needs through wind and solar. But, in mid-December when it’s cold and perhaps not windy, Germany may get very little of its power through renewable energy because the supply cannot meet the demand. Natural gas, coal and nuclear energy is a reliable form of power generation that can be dispatched to the grid at any time. And Germany does not have the solutions right now to store renewable energy, like wind and solar, to be used during the winter months.
Following the Fukushima disaster in 2011, Germany made a political decision to phase out nuclear power. In retrospect, that was a terrible mistake because the nuclear power stations could have provided the power that natural gas is providing now. Germany had also turned off a lot of its coal plants, which is a good move for climate change, but they are now needing to reactivate those coal plants.
Additionally, there are a lot of industries in Germany, such as automobile manufacturing, that rely on natural gas as a cheap power source to produce goods and services. These industries are in a tough position because Russian natural gas is the backbone of the competitiveness of the German economy.
Q: What was Germany’s response when it was urged by other countries to rethink its energy policy in response to the Russian aggression toward Ukraine and other regions?
A: The U.S. has been pushing back very hard on Germany for many years, that its dependence on Russian natural gas is a bad idea based on the assessment that Putin is a repeat offender of conflict around the world. Ukraine is just the latest example.
The Germans were a bit blinded to this by a combination of their economic self-interest and a naive belief that trade and commerce ties would begin to create pressure for increased democratization in Russia. We saw this with the Americans letting China into the World Trade Organization for the exact same reason — there is a belief that economic ties can help move a society towards greater freedom for their people. But in both cases, the economic ties did not help and these leaders have been able to reap the economic benefits while continuing to subjugate their people.
German industries also wanted to be competitive economically and needed a cheap source of energy, so they ignored the warnings out of economic self-interest. They’re a very economically strong country and they want to remain the backbone of the European economy. I was in the Obama administration and Obama also made decisions that in retrospect, were very naive about Russia in 2008. It was just hard to recognize the danger at that moment.
Q: Where does the German public stand on this energy policy dilemma and the unforeseen consequences of the war in Ukraine?
A: What I have observed from the German public is generally a very welcoming posture toward the Ukrainian refugees. They are helping them find housing, meals, medical care and daycare. I think that they have a lot of sympathy for Ukraine, but frankly, I am not sure that there is a common understanding of how the German energy policy is funding Putin’s war. People don’t generally tend to know where their oil and gas comes from and it requires connecting a lot of dots that most people are not thinking about when they pump gas into their car. So, this is an important conversation to have.
Q: What can individuals do on a personal level to push back on Russian oil imports?
A: Anything that you can do to help tackle climate change is essentially going to help here as well. Drive less and bike more. Make sure that your tires are properly inflated. Don’t make jackrabbit starts. And use less electricity. The more you can do to save energy, the less money goes into Putin’s pocket to buy bombs to kill Ukrainian civilians. It’s that simple.
Q: The G7 group of nations just reached a ‘broad agreement’ for a price cap on oil imports from Russia, though how that would work is not yet clear. Do you think this is an effective policy?
A: I believe that anything that the G7 can do to restrict money going into Putin’s evil regime is a good thing. That said, decisions are sometimes made with the right intentions, but result in unintended consequences. For example, Germany’s decision to shut down nuclear plants made themselves vulnerable to Putin and our attempt to reduce Russia’s ability to sell oil and gas abroad backfired since he’s now making more revenue from the higher prices. So, sometimes the things that we do for the right reasons turn out not to work out so well. But the intention is certainly to tie Putin’s hands and I applaud it.
Alexandra Goldberg is a Communication and Journalism student at UC Santa Barbara, reporting in Berlin this summer.
