Trump’s oil criticism will come as no surprise to Merkel

12 Jul 2018


Donald Trump has made a typically disruptive start to this week’s NATO summit in Brussels. He has criticised Angela Merkel’s Germany, saying that it is “totally controlled by Russia” due to its dependence on Russian gas imports. While Trump is clearly exaggerating – yes, Germany’s reliance on Russia is a strategic weakness, but they are not “totally controlled” by Moscow – he is highlighting a concern that many previous US administrations have had, albeit in his trademark abrasive way.


For starters, the president claimed in a tweet that Germany imports 70% of its natural gas from Russia. The actual figure is more like 50%. Nevertheless, the issue he is highlighting is a genuine concern for many in the West. The source of energy imports is a major strategic concern, particularly when the country relied upon is Russia.


Oil dependency is a particularly thorny issue in geopolitics. The theory goes, that if a country is overly dependent on one country to meet its energy needs, they are vulnerable to a cut in exports that could starve their economy and create a crisis (if relations ever reached this point). This puts the exporter – Russia in this case – in an extremely powerful position.


Many previous US administrations have been paranoid about the increasing reliance of European countries on Russian gas. For example, Ronald Reagan’s opposition to a Russian/European gas pipeline in the 1980s led to the French proclaiming the end of the transatlantic alliance. However, given the current state of relations - and Moscow’s disruptive tendencies - the issue is especially pertinent.


America’s fear of its allies’ reliance on Russian gas is understandable. It began in the twentieth century, as Russia’s oil export industry began to flourish. Over time, its export prices have fallen, making its gas exports more competitive, and thus attractive, to its neighbours in Europe. Europe’s growing reliance on Russian imports represents a quiet spreading of strategic Russian influence among America's most important western allies. And, as the EU and NATO have spread eastward, to include many former Soviet countries, Russia’s tentacles are dipped even deeper into the West’s multinational institutions.


Europe has become an increasingly keen customer of Russian energy in recent years. 37% of the European gas market is supplied by the Russians, with that figure being far higher in eastern and Baltic states such as Czech Republic, Latvia, Lithuania and Finland. So, given that many European countries are far more dependent on Russian gas than Germany, why has Trump focussed his criticism squarely on Chancellor Merkel?



In addition to being one of his favourite targets for angry tweets and exaggerated criticism, whether that be on trade or migration policy, the answer lies in Merkel’s support for the Nord Stream 2 project. Nord Stream 2 is a new gas pipeline running from Russia to Greifswald in Germany, and is backed by Berlin and Moscow. Despite fierce opposition from Washington, and from the many of her EU allies fearful of an overreaching Russia, she has continued to champion it.


The pipeline will likely lower energy costs in Germany, and Merkel argues that it will help fill a gap between growing European gas demand and supply shortages elsewhere in Europe. But critics are concerned. EU states worried of further dependence on Russian energy view the Germans as spineless. The US agrees, and senses a Russian plot to deepen Europe’s addiction to cheap Russian gas.


Further, Merkel’s support for Nord Stream 2 puzzles her allies. In their view, it is contradictory to the EU’s – and her new coalition government’s – aim to diversify the sources of its gas imports and reduce reliance on Russia. The Germans have invested in new Liquefied Natural Gas ports in the North, which will allow it to import gas from further away and reduce dependency on Russia. But her support for Nord Stream 2 seems to represent for many a direct contradiction of her stated aims.


Whilst the Obama administration opposed the pipeline, the Trump administration is determined to thwart it. The targeting of recent US sanctions reflected their concerns. Measures have been designed to cut off financing and technology from Russian energy companies most involved with Nord Stream 2. Meanwhile steps to sanction foreign companies involved in the pipeline have angered Germany, deepening the cracks in the transatlantic alliance that have been fermenting since the election of Donald Trump.


Trump’s move today, exaggeratingly highlighting Germany’s dependence on Russian gas, is inexplicably linked to his opposition to the Nord Stream 2 pipeline. But linking Germany’s oil imports to its below-target defence spending is an abrasive and provocative move, and reflects his belief that Germany is spending its money on the pipeline instead of defence (it is actually funded by private companies.)


Trump’s words probably won’t surprise Merkel, but the timing might. Trump’s concerns about Europe’s reliance on Russia are understandable, but he should recognise that European gas imports are driven by market forces. Countries will import gas from the cheapest source. Rather than using blunt instruments, such as angry tweets and the disruption of this week’s NATO summit, he may be better off making US gas more attractive. But Trump always prefers blunt instruments, and he thinks this intervention could make Germany stump up more on defence.

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