Germany's Energy Trade

Summer is over and it is time to get blogging.  On September 6, 2011, a Russian JV started filling natural gas into the first of two new pipelines, called Nord Stream.  Gazprom holds a 51% ownership in the JV with BASF SE/Wintershall Holding GmbH and E.ON Ruhrgas each holding 15.5%, and Gasunie and GDF SUEZ each holding 9%.   The first pipeline runs 1,224 kilometers along the Baltic Sea bottom to Germany.  This pipeline will transport 27.5 billion cubic meters of natural gas directly to Germany and from there to France, the UK, the Netherlands and Denmark.  A second pipeline (and identical to the first - 27.5 billion cubic meters capacity) to run parallel, is 54% complete and is expected to be completed by the fourth quarter of 2012.

I wrote an earlier blog about Germany shuttering its nuclear power industry by 2022, with 8 of 17 nuclear power plants to be shut this year.  The reduction of 10% of its power needs are to be made up elsewhere - where?  This may be the where.  It seems to me, someone across the pond, that Germany is trading one onerous energy source for another.  Gazprom is the world's largest producer of natural gas.  It has held Ukraine hostage in 2006 and 2009, over natural gas price disputes.  It is embarking on another as the buffer gas is being injected into the Nord Stream pipeline before commercial natural gas can be pumped.  This time the dispute is over a reduction in price and volume by Ukraine, but Gazprom has refused unless the Ukraine's state gas company agrees to merge with Gazprom.  The natural gas comes from Russia and begins its trip in Russia and is 51% owned by a Russian company.  Could disputes occur in the future with Germany?

This sounds like more of a monopolistic grasp over Europe than there was previously.  As Germany reduces its own ability to generate electricity or energy and replacing it with imported energy, safety issues are being traded for trade issues and less energy freedom; particularly, when the nuclear power industry has had a great track record, despite several accidents.  I think that the timing of Germany's nuclear decision was premature, but only time will tell.