The gas war

by Prof. Eberhard Hamer,* Germany

(20 February 2022) The days of cheap energy are probably over for German households and companies. Green ideologues have succeeded in making conventional electricity suppliers such as coal and oil more expensive and more difficult to replace. But the replacement by wind and solar energy is not only uncertain, it is also more expensive – not least because of the taxes imposed by the state.

The cheapest and cleanest electricity generation – nuclear power – is no longer allowed in Germany. Three technically modern and intact power plants were shut down in Germany at the end of the year, while at the same time the EU reassesses nuclear power with German support as climate neutral, alongside our energy politicians’ hope that France’s 57 nuclear power plants will cover up any foreseeable energy shortages in Germany this winter.

Until now, the most secure and cheapest energy was Russian gas. As a means of leveling off and strengthening this supply, the Nord Stream 2 gas pipeline was built at a cost of 10 billion dollars in the Baltic Sea. It has been completed, but should not be operated, especially under American pressure, because

1. the Americans are looking for outlets for their expensive and dirty fracked gas and want to sell it in Europe, even though it is twice as expensive as Gazprom gas. Preventing Russian gas is therefore not only intended to bring American fracked gas into Europe, but must also lead to a doubling of prices in Europe to make fracked gas competitive.
2. the Americans are fighting an economic war against Russia and do not want Russia to get a permanent income from Europe for its Gazprom gas, which would strengthen it economically and militarily.
3. according to US publications, the Biden family also has private interests against Nord Stream 2, as it is expected to receive taxes on the Ukrainian gas pipeline via tax havens.
4. Ukraine opposes Nord Stream 2 because its operation could put an end to the transit of Russian gas through Ukraine and thus to the ongoing dispute over whether and how much Ukraine is illegally diverting from transit. Merkel therefore had to guarantee Ukraine the replacement of the transit fees that would disappear. And in recent months, Ukraine has been supplied with additional gas from German gas storage. Nevertheless, Ukraine is fighting massively against the operation of Nord Stream 2 – including within US domestic politics – because it fears economic and political disadvantages from the removal of Russian gas to Europe.
5. Poland also opposes the Nord Stream 2 pipeline because of the risk of transit loss, but also obtained compensation pledges from Merkel.
6. the American lobby inside the EU and German politics is fighting the Nord Stream 2 pipeline by bureaucratic means. Suddenly, as gas supply becomes of European competence, the EU regulates the gas market and, instead of getting permanent supplies from Russia at permanent prices, blows up prices randomly by shifting to the international speculative gas market (spot market), hence doubling the charge on average.

All these measures have not only increased the price of gas, but also the price of electricity, since electricity is partly produced with gas. Curiously, not only foreigners, but also German Atlanticists, from the CDU to the Greens, did not criticize this price hike to the detriment of German consumers (and voters), but helped to provoke it and tolerated it in silence.

The days of cheap energy are therefore probably over in Germany. We are in a prime position when it comes to electricity costs, which not only weighs heavily on households – especially the poorest – but also leads to a loss of international competitiveness, with probably a future emigration from energy-intensive sectors.

For the German consumer, who now has to bear the additional energy costs (and the corresponding loss of well-being) on a long-term basis, two things are clear:

1. Merkel has already given the benefit of the doubt to American rather than German interests (NATO contribution, phone tapping scandal, mass immigration). In the gas war, the new green government is not only obedient, but even submissive, to the detriment of German consumers and voters.
2. The gas war, like the revival of mass immigration, shows that the new green government is dubiously following ideological or American goals, even if these cause the greatest permanent damage to the German population and voters.

With such a policy, the green thesis of “a rich Germany that can serve the whole world” will not last much longer.

* Eberhard Hamer (born 1932) is a German economist. After studying economics, theology and law, he obtained his doctorate and worked as a lawyer in a company. Hamer later received a call to the University of Applied Sciences in Bielefeld, where he taught as a professor of economic and financial policy until his retirement in 1994. In the 1970s, he founded the privately run Mittelstandsinstitut Niedersachsen in Hanover and published numerous essays and over 20 books on the subject of small and medium-sized enterprises.