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The German logic of haggling: driving slower to heat houses

Contributed by Samuel Furfari, republished with the author’s permission from a DeepL translation of the French original published in Atlantico. Please consult the original if you have questions on the text.

Energy policy is a victim of ideological bargaining. Citizens risk paying dearly for energy that should have been cheap, and some may even be cold this winter because of the German EnergieWende, a German policy of bargaining that has been imposed on the whole EU. Awareness of this was the first step. Now we have to act and stop dreaming of a rapid energy transition.

Samuel Furfari
Professor at the Université Libre de Bruxelles
President of the European Society of Engineers and Industrialists

Germany pioneers hydraulic fracturing
“The [German] national geological surveys continue to constructively support the exploration and industrial production of oil and natural gas in Germany within the “Verbund Kohlenwasserstoffgeologie”. Within the framework of this contractual cooperation, the Regional Soil Research Office of Lower Saxony advises geological surveys and mining authorities on all geoscientific issues related to the exploration and extraction of oil and natural gas as well as to underground storage. […] The gas quantities in the low-permeability red sandstones concentrated in the Söhlingen and Schneverdingen area are still considered to have great potential for the national reserve base. “

This was written in 2001 by the Lower Saxony Regional Soil Survey in its report “Geological Survey of Lower Saxony”.

At the time, ExxonMobil was active in Germany in the field of hydraulic fracturing to exploit gas pockets trapped in sandstone. This is not quite the same type of deposit as shale gas, but it is the same technology that is used. But pressure from environmentalists got the better of them, and eventually the whole thing was abandoned.

In no time at all, as if everything was organised, an anti-shale gas tidal wave swept through Germany and just as quickly through the EU. Drieu Godefridi writes that “in Germany, the major environmental organisations WWF, BUND and NABU have set up an ‘environmental’ foundation – Naturschutzstiftung Deutsche Ostsee – with the company Nord Stream AG.” It has been endowed with 10 million euros by Gazprom, as Nord Stream AG claims. These German environmental organisations WWF, BUND and NABU were at the same time strong opponents of German civil nuclear power and shale gas exploitation in Europe.

The Greens’ bargain was therefore to get nuclear power stopped in exchange for acceptance of the Nord Stream pipeline and opposition to LNG terminals. It is unlikely that German industry as a whole did not know this. It therefore bears a heavy responsibility, as does the entire German political class.

If it were just them, it would be serious, but since they convinced the European Commission and the EU to follow them in greening energy policy, it is an unprecedented mistake in the history of European construction.

Science versus government
Under the Euratom Treaty, which aims to promote the civil use of atomic energy, Germany, like many EU Member States, had invested in this energy. In 2000, it produced 170 terawatt hours (TWh) of electricity (30% of total production) from 22 gigawatts (GW) of nuclear power plants. In 2019, it produced only 75 TWh (12% of German production) from 9.5 MW, with the rest of the capacity shut down because the environmentalists of the 1980s invented the EnergieWende expressly to stop nuclear power production. These Grünen convinced a large majority of Germans that the energy they needed would soon be 100% renewable, clean and cheap, even if it meant importing natural gas from Russia for what was announced to be a short period. By dint of compromise, Chancellor Angela Merkel has denied the science she once mastered, having earned a doctorate in physical chemistry. She has put aside her knowledge to stay in government.

The cattle market
The Süddeutsche Zeitung has just reported that the Bavarian Greens, probably in coordination with the party leadership in Berlin, have come out in favour of a six-month extension of the life of the Isar2 nuclear power plant. It seems that there is a condition to this decision: to check by a stress test whether the Bavarian industry will suffer too much this winter if Russian gas is not available enough.

Similar decisions will probably be taken for the nuclear power plants in Neckarwestheim 2 (in BadenWürttemberg) and Emsland (in Lower Saxony). It is piquant to recall that fierce opposition to nuclear power was the basis for the creation of the German environmental movement, and that it is this same party that, faced with the harsh reality of the facts, has to agree not to close the last three nuclear power plants.

But what will the Grünen get in return for this less than honourable surrender? According to the Wall Street Journal, the current discussions are about a big bargain. The Greens would agree to the extension of the country’s last three nuclear power plants, something unimaginable until recently, so much so that Olaf Scholz’s government has declared its opposition to the European Commission’s
decision on the taxonomy accepting nuclear power with lip service. In exchange, they would get the abandonment of no speed limits on motorways – the abandonment of an equally unimaginable taboo until recently. The liberal FDP will swallow a snake as big as the Grünen.

This Kuhhandel (“cow exchange”/ “cattle market” in German) shows that we are in the realm of ideological politics, far from rationality.

Heat as the main end-energy
The war in Ukraine finally reveals to the general public and politicians – including the EU – one of the crucial points of energy policy. The most important energy by volume is heat. In fact, 70% of the EU’s natural gas is used for thermal purposes and not for electricity generation. In Germany it is more, as only 6% of natural gas is burnt in power stations. Of course, in the catastrophic situation that Germany is facing, not using this 6% is necessary, which is why bargaining can work. But it will not be enough. The energy crisis shows that solar panels, wind turbines and nuclear power plants are meaningless if thermal energy is neglected. In the EU, almost half of the final energy used is heat, with electricity accounting for only 22%. Like everyone else, Germans need thermal energy to heat their homes and services in winter and to run industrial furnaces, a need that has so far been met by burning natural gas. But this fuel is also a basic material for the German chemical industry, which cannot do without methane.

The logic of German politicians is therefore that in order to satisfy the thermal needs provided by natural gas, they will extend the nuclear power plants that produce electricity and reduce the speed on the motorways to use less petrol and diesel that is not used for heating! This is bargaining politics far from rationality.

France and Belgium like Germany
It is this kind of bargaining that has cost France its place in the geopolitical race for nuclear power. François Hollande, in order to form his government with the ecologists, promised to reduce the share of nuclear power to 50% of French electricity consumption, thus destroying the confidence of potential international buyers who were interested in French technology based on long and exceptional experience. Poland – the only Soviet satellite country without nuclear power – will probably buy American, not French, nuclear power plants. In the same bargaining logic, Emmanuel Macron took the decision to close the Fessenheim nuclear plant, even though it was fully operational.

This type of bargaining is currently in force in Belgium, where in a surreal process, when no alternative solution exists, the political world is dithering on the urgency of extending existing nuclear power plants. Engie is negotiating hard with the Belgian government for the extension of two plants in exchange for financial support, while there is no reason to close all six plants in the country. But haggling is now the basis of the political energy strategy.

Haggling over restrictions
At the same time, the European Commission has proposed that the Member States decide on a voluntary basis, and if it were not enough it would be on a binding basis, to limit natural gas consumption by 15%. This fuel, so hated a few months ago, is now so precious that it must be preserved. But Portugal, Spain, Greece and Italy (see the letter from Minister Cingolani to Vice President Frans Timmermans) made it clear that they would not ask their citizens to sacrifice themselves to help the Germans, who bear the primary responsibility for the energy crisis. In the end, the proposal was accepted, but with numerous derogations and various loopholes. It is mainly a publicity stunt to reassure the worried population.

The German Grünen, but also Angela Merkel, neglected to diversify their supplies of Russian gas, but above all they refused to build a single gas terminal in order to be able to obtain liquid natural gas (LNG) on the international markets, unlike the countries we have just mentioned, even if Italy should have built more terminals (but there too, the opposition of the Greens prevailed) Spain built the first
LNG terminal in Europe in the port of Barcelona in 1969. It now has seven on the peninsula, including one in Gijon (Asturias) that is not even used because the market is so well supplied, and another on the island of Tenerife. The rest of the gas comes from Algeria through two pipelines. Spain has in the past followed a diversification strategy based on the energy of the future that Germany has consciously ignored. It is regrettable that the current Spanish government with the Podemos communists has chosen Germany’s EnergieWende as its model.

The European Commission should not expect southern Europe to sacrifice itself for the German ecologists, despite Article 122 of the Lisbon Treaty which speaks of solidarity “in particular in the field of energy” (sic).

Nor should it expect solidarity from Hungary, whose foreign minister has just visited Moscow on 21 July to negotiate additional deliveries of Russian gas. This visit comes a few days after Hungarian Prime Minister Viktor Orban declared that the EU had made a mistake with the sanctions. All this will exacerbate relations with Brussels, which has not hesitated to talk about blocking funds to Hungary… as part of a deal.

Let the Germans take responsibility
When you have to pay your exorbitant energy bills, remember that this is due to the German ideology called EnergieWende, which aims to kill nuclear power and fossil fuels, a strategy followed in whole or in part by your government as well. The crisis in Ukraine only exacerbates this problem, but it was not Vladimir Putin who invented the crisis that Germany has plunged us into. Energy prices started to rise as early as September 2021, five months before the war started (see my article in Atlantico). We are victims of the German EnergieWende policy and its corollary, the import of Russian gas.

Normally, apart from Germany, there should be no rationing in the rest of the EU, as the energy mix is well diversified. Let the Germans, who imposed the forced march towards renewable energies, now assume the constraints and possible blackouts that will result from it.

Let them begin to understand that limiting speed on the motorway will not heat their homes.

5 proposals for abundant and cheap energy
Energy is a serious matter. Unfortunately, demagogic politicians and “cattle traders” have taken control of it in the EU. Let this crisis serve to make them realise that the founders of the EU were right when they said that there would be no future without cheap and abundant energy. We should now abandon all the green bargaining of the past and :

  1. continue the operation of existing nuclear power plants, especially in Belgium and Germany who wanted to shut them all down,
  2. relaunch the development of nuclear research as required by the Euratom Treaty,
  3. the European Commission should update its 2016 Nuclear Illustrative Programme (an obligation imposed by Article 40 of the Euratom Treaty)
  4. the European Commission should propose a directive to promote the exploitation of shale oil and gas resources
  5. the EU should abandon or dismiss its unrealistic and costly decarbonisation targets (Fit 55), in particular the German policy of promoting hydrogen, which can only be achieved with more natural gas as I show in my book “The Hydrogen Utopia”

Samuele Furfari’s latest work is a 1200-page, two-volume book “The changing world of energy and the geopolitical challenges“. See furfari.wordpress.com

1 Comment

  1. Duane Pendergast

    Yes! Let them heat their homes with electricity generated by “renewable” energy. Perhaps that will help us all learn that the reduce, recycle, reuse concept inherent to human use of the energy in fossil fuels that Mother Nature left us is actually a good thing?

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