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Germany goes all in on LNG terminals to ease Russian power dependence


With half of Germany’s natural gas and a third of its oil coming from Russia, energy independence is becoming a matter of national security for Europe’s largest economy. 

Germany hopes to ease vulnerability by building liquefied natural gas terminals, which re-gasify the supercooled form of natural gas that arrives on ships. The push for LNG opens up new gas supplies, but still raises questions about energy security. Namely, is Germany simply switching its dependence from Russia to the United States?

Why We Wrote This

German leaders are making headlines for their aggressive pursuit of liquefied natural gas. Will the rapid rollout actually boost the country’s energy security?

Imports of U.S. LNG into Europe reached a historic high in 2021, and German demand will increase that flow.

“Say we flip contracts [from Russia’s Gazprom] to the U.S., and then in two years Donald Trump is president again,” says Henning Gloystein, director of energy, climate, and resources for Eurasia Group. “We know that he imposes tariffs and uses energy as political leverage. And that worries a lot of people in Europe.” 

Europeans are aware of the pitfalls of single suppliers. Long term, analysts say there will be a greater emphasis on diversity of supply – and on green energy alternatives – but right now Germany is buying up gas from wherever it can get it.

Berlin

Energy interdependence worked for Germany before Russia invaded Ukraine; now it’s clear that energy revenues help fund Russian President Vladimir Putin’s war machine. Energy independence from “individual suppliers” is becoming a matter of national security, says German Chancellor Olaf Scholz. 

That vulnerability was made even more evident this month by a halt in natural gas flows from Nord Stream 1 – the massive gas pipeline connecting Russia and Germany – for 10 days of scheduled maintenance. Russia only partially resumed flow today, and the European Commission President likened Mr. Putin’s actions to blackmail. 

Germany is largely dependent on Russian energy, with half its natural gas and a third of its oil coming from that country. There’s currently no other way to quickly secure Europe’s supply of energy for heating, transportation, and industry, says the German government. But they’re trying. Leaders have decided to build liquefied natural gas terminals, which opens up new energy supplies but also raises a bevy of questions about Germany’s energy security.

Why We Wrote This

German leaders are making headlines for their aggressive pursuit of liquefied natural gas. Will the rapid rollout actually boost the country’s energy security?

How realistic are Germany’s plans to switch to LNG as a replacement for Russian gas? 

Nuclear energy has been phased out, and renewables such as wind aren’t yet ready to pick up the slack, so lawmakers have decided that LNG is the answer to Germany’s energy crisis. They’ve announced plans to build two domestic LNG terminals, which re-gasify the supercooled form of natural gas that arrives on ships. Leasing floating terminals and securing supply via terminals elsewhere in Europe is also in the works. Essentially, Germany is trying to buy whatever it can, from wherever it can. 

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