On its face, the current state of affairs is absurd: The Western world and beyond have bent over backward to apply unprecedented economic sanctions on Russia to pressure Russian President Vladimir Putin into stopping its invasion of Ukraine. But at the same time, the very same countries spend about $1.1 billion a day on Russian hydrocarbons—oil, gas, and coal—which are Russia’s most lucrative exports and about 14 percent of its GDP. Russia depends on energy sales to finance its 60-billion-dollar-a-year military and could not have conceivably, without this business, constructed the fighting force presently leveling Ukraine.
The moral dilemma is obvious. Ukrainian President Volodymyr Zelensky has called for halting imports, as have many public figures in Germany and elsewhere. But it has also led to a debate about the strategic merits of suddenly cutting off Russian energy supplies—a debate that is concentrated on Germany. The EU countries depend on Russia for 40 percent of their natural gas, 35 percent of crude oil, and 47 percent of coal. An abrupt cutoff would constitute a gigantic lurch into the unknown—one that would have enormous repercussions for European industries and lifestyles, particularly in Germany and Central Europe, which are particularly reliant on Putin’s pumps. That degree of dependence has produced clashing analyses in Germany about the best path forward and the costs for Germany’s economy, foreign policy, and climate change politics.
The German government has insisted it will not consider an embargo of Russian gas and oil because the economic costs would simply be too high. But for a growing number of public figures and analysts, the strategic case is as clear as the moral one. Germany’s Christian Democrat foreign-policy expert, Norbert Röttgen, argued: “The war is a business model for Putin, and we are financing it! So what are we waiting for? How many bombed cities are enough? … I am convinced that the oil and gas embargo will come.” So flip the switch right now, he argued, before more people die.
On its face, the current state of affairs is absurd: The Western world and beyond have bent over backward to apply unprecedented economic sanctions on Russia to pressure Russian President Vladimir Putin into stopping its invasion of Ukraine. But at the same time, the very same countries spend about $1.1 billion a day on Russian hydrocarbons—oil, gas, and coal—which are Russia’s most lucrative exports and about 14 percent of its GDP. Russia depends on energy sales to finance its 60-billion-dollar-a-year military and could not have conceivably, without this business, constructed the fighting force presently leveling Ukraine.
The moral dilemma is obvious. Ukrainian President Volodymyr Zelensky has called for halting imports, as have many public figures in Germany and elsewhere. But it has also led to a debate about the strategic merits of suddenly cutting off Russian energy supplies—a debate that is concentrated on Germany. The EU countries depend on Russia for 40 percent of their natural gas, 35 percent of crude oil, and 47 percent of coal. An abrupt cutoff would constitute a gigantic lurch into the unknown—one that would have enormous repercussions for European industries and lifestyles, particularly in Germany and Central Europe, which are particularly reliant on Putin’s pumps. That degree of dependence has produced clashing analyses in Germany about the best path forward and the costs for Germany’s economy, foreign policy, and climate change politics.
The German government has insisted it will not consider an embargo of Russian gas and oil because the economic costs would simply be too high. But for a growing number of public figures and analysts, the strategic case is as clear as the moral one. Germany’s Christian Democrat foreign-policy expert, Norbert Röttgen, argued: “The war is a business model for Putin, and we are financing it! So what are we waiting for? How many bombed cities are enough? … I am convinced that the oil and gas embargo will come.” So flip the switch right now, he argued, before more people die.
Ever more European policymakers and experts are now considering what just a week ago sounded unhinged: terminating all energy imports from Russia. (Putin has also threatened to cut the supply from his end should the West not acquiesce to Russia’s demands. The result, of course, would be exactly the same.) U.S. President Joe Biden took the jump first, announcing on March 8 that the United States would no longer shell out another dime for Russian gas and oil, which it buys on a much smaller scale than Europeans do: about just 8 percent of oil and other petroleum imports. Nevertheless, he warned, “defending freedom is going to cost,” a reference to the likelihood of yet higher gasoline prices. Europe’s dependence on Russia, however, means its gamble is of an entirely different order.
Röttgen is still an outlier in his party on this issue. But a growing list of other figures and German and European think tanks argue that going cold turkey is doable and that Western Europe is prepared to weather the fallout. The German National Academy of Sciences Leopoldina, for example, argues that “a stop of deliveries of Russian gas would be manageable for the German economy. … Bottlenecks could arise in the coming winter. It would be possible to limit the negative effects and cushion the social impact by immediately implementing a package of measures.”
The first move—whether the transition be cold turkey or long term—is seeking alternative sources of natural gas and building up gas reserves for next winter. Gas, though, is far harder to come by than oil and coal and is particularly critical for Germany, which relies heavily on Russian gas to run its chemicals, plastics, fertilizer, concrete, and steel sectors. A third of German industries as well as half of all buildings rely on gas for heating and cooling. Experts say the obvious candidates for additional gas—namely Norway, the United States, Algeria, Qatar, and Azerbaijan—can probably chip in a little more, especially in terms of liquified natural gas (LNG), but not that much more, especially in the short term. They’re basically selling everything they produce now. And Germany, for example, doesn’t currently boast even a single LNG terminal.
Brand new EU guidelines will require that European gas storage facilities be at least at 90 percent capacity by the onset of next winter—a viable but costly exercise. At current prices, this would run the bloc states at least $76.9 billion, compared to the price tag of $13.2 billion in past years. Michael Bradshaw, professor of global energy at Warwick Business School, said the all-out storage drive is highly speculative since “this gas just doesn’t exist right now. There’s a good reason that our reserves were so low going into this winter. Natural gas is already in short supply and very expensive.”
But this stash, even if it were to materialize, which is anything but certain, would not last the entire winter. This means that even in the event of a successful scrambling for and distribution of extra gas supply in Europe, there’d be a 10 to 15 percent shortfall, according to a report by Bruegel, a Brussels-based think tank. Germany would experience the worst of it.
Analysts diverge on how this gap can be covered. Bruegel and other institutes and agencies modeling this scenario agree that the key for Europe would be to simply use less gas. This implies state intervention in the economy to manage demand, namely by prioritizing essential sectors, deprioritizing others, and regulating production times and goals. The International Energy Agency said ordinary citizens would have to turn down their thermostats by 1.8 degrees Fahrenheit; German experts think 3.6 degrees Fahrenheit would be more likely.
But Europe’s energy supply consists of more than gas. Although renewable energy would be unable to take over immediately, aging coal-fired plants and nuclear stations could remain in service longer than currently planned. While Röttgen advocates exactly this and admits that Germany’s emissions balance will become collateral damage, Leopoldina said a short-term hike in coal-fired generation for the purposes of power production could be counterbalanced by energy savings, shifting to electrical heating and pushing ever harder on clean energy expansion. Leopoldina, however, argues Germany’s last nuclear plants lack the material, such as uranium fuel rods, to lumber on another year.
Bradshaw remains highly skeptical that Europe could respond so nimbly to a volte-face cutoff and warns that a worst-case scenario could land Europe where it found itself during the 1970s energy crisis: three-day production weeks, rolling blackouts, and energy rationing. Older people and those with low incomes would suffer disproportionately, he says. Germany is already feeling the pinch: automakers have periodically stopped production, gas prices have quadrupled, and industrial supply chains are being interrupted—and that’s with petroleum products flowing as freely as ever.
Such reservations are why some leaders, such as German Chancellor Olaf Scholz and German Economy and Climate Minister Robert Habeck, currently rule out the option of turning off the taps from one day to the next, preferring to keep the pipelines open and energy flowing as Germany weans itself off gradually over a period of years. A complete embargo, Habeck said, would cause “a serious economic crisis,” with mass unemployment and a recession even larger than during the pandemic. This, too, is the position of Germany’s powerful industrial association, BDI, which warns in dire terms of skyrocketing prices, industrial stoppages, and commodity shortages.
Thus far, Habeck and EU climate chief Frans Timmermans see the shift away from gas not primarily as a rapid response means to eviscerate the Russian war effort but as a medium- and long-term way to fuse climate policy and energy security into one. In this vein, Germany just announced a whopping four-year, $219.8 billion budget top-up for the purpose of achieving energy independence from Russia, among other energy exporters, and finally putting Germany on a path to hit its own climate goals. The recipe is currently the same as the heart of Germany’s decarbonization agenda (though minus Russian gas): namely the buildout of renewable energy; energy efficiency; and a high-tech, smart energy system based on electricity. Power will replace gas (faster than previously planned), and sun and wind will substitute gas, other fossil fuels, and nuclear power—again, on a faster schedule. Biogas, a green waste-and-vegetation fuel, is back on the table again after falling out of favor for environmental reasons. There’ll be much more cash for electric car charging stations, hydrogen technology, industrial modernization, clean energy subsidies, and support for low-income households facing high-energy costs.
Critically, and ever more controversially, Habeck underscored that his path to energy autonomy does not include prolonging the lifespans of either Germany’s nuclear or coal plants. The former (there are only three left) will go offline at the end of this year, whereas coal generation should be phased out by 2030. These are Green Party, indeed German, principles that the centrist government pledges it will not tweak—at least, not yet. In other words: Rescuing the climate will not be sacrificed by Putin’s assault on Ukraine.
The EU is thinking along the same lines. On March 8, the European Commission published plans to cut the bloc’s dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies of the fuel “well before 2030,” Timmermans said.
In the end, it might just come down to how much more misery—and how many more refugees—Europeans, and Germans specifically, can stomach. After all, giving up new plastic products and wearing an extra pair of wool socks next winter wouldn’t be too great a sacrifice for most Europeans, according to polls. But a dire economic crisis on top of two years of a pandemic would be another story.