Germany is afraid: it has replaced its dependence on Russia with that of Trump’s USA
Germany's heavy dependence on liquefied natural gas (LNG) from the United States is a source of concern among experts and politicians. They fear that future US President Donald Trump could exploit this dependence to put pressure on Germany and other countries. Moreover, it is clear that green Germany has not solved any of its energy problems, but has replaced a Russian dependence on the USA.
Marco Overhaus of the German Institute for International and Security Affairs (SWP) warns that “everything indicates that a US government under President Trump will have no inhibitions in closely intertwining security policy and economic interests.” The LNG issue is an example of this intertwining. Trump could exploit the EU's security policy dependencies to sell gas to Europe under certain conditions.
Since his re-election in November, Trump has missed no opportunity to express his requests to his European partners. He wants to introduce high import tariffs and calls on Europeans to turn their backs on China. After all, Europe has put its head in the noose of energy dependence on its own, Germany first and foremost, why shouldn't it use this rope to take European politics where it wants it?
LNG imports by state, by semester.
A comparison between data from Gas Infrastructure Europe's (GIE) ALSI transparency platform and that from the US Energy Information Agency (EIA) illustrates how dependent Germany is on LNG supplies from the US. According to this data, 86% of the LNG imported into Germany last year came from the United States. Experts estimate that US LNG covered 13.5% of Germany's natural gas demand during this period.
More recently, he sparked a debate with territorial claims to Greenland and called for NATO states to invest five percent instead of two percent of their economic output in defense. By placing conditions on future LNG supplies, Trump could underline his demands and bend any German politician to his will. But the blame for this lies solely with the Germans: no one forced them to give up coal and nuclear power to embark on an unlikely energy transition.
A total addiction
But the dependence is not only on raw materials, but also on supply infrastructures . Only around eight percent of Germany's total natural gas demand will be imported via German LNG terminals in 2024, the Federal Network Agency said on Wednesday. German LNG importers also use LNG terminals in countries such as Belgium and the Netherlands. However, the Federal Network Agency does not calculate any data on this matter, it is better that all this remains secret before the elections.
Most of the natural gas consumed in Germany comes from Norway via a pipeline. According to the Federal Network Agency, Norway covered 48% of German demand last year. The Scandinavian country, for many years Germany's second supplier, thus took Russia's place until the start of the war in Ukraine.
Norwegian gas is more expensive than Russian gas because it is extracted offshore from deposits that run out more quickly, forcing Norway to invest heavily in their renewal . The gas pipeline infrastructure later proved vulnerable, as the attack on Nord Stream revealed. Finally, Norway does not have unlimited extraction capacity, in fact it is at the limit.
Despite representing only 13.5% of total imports, LNG from the United States is of fundamental importance to the German gas market. Jacopo Pepe, SWP researcher, underlines this: “The share of LNG in total German gas imports is relatively low. However, in the event of peak demand or a pipeline rupture, for example, US exporters are currently the only ones able to supply LNG at short notice,” Pepe said. “Their market power in these situations is immense.”
Pepe is convinced that the Europeans, especially the Germans, played a significant role in putting the United States in a strong position in the market: “The Europeans put themselves in a difficult situation. The Germans in particular do not want to commit to long-term contracts for reasons of climate protection,” says Pepe.
As a result, supply contracts are structured in such a way as to offer exit clauses for both contracting parties, which is now proving to be a burden. Europe cannot exit, the USA can, and exits whenever prices elsewhere are higher.
European companies consider themselves smart, and therefore have so far refused to sign long-term development contracts with US suppliers, unlike what they had done with Russia. So the price is pure market, but this is proving penalizing. However, here too the stupidity was European, not American. Now we pay the price for the mistakes of our elites.
Thanks to our Telegram channel you can stay updated on the publication of new Economic Scenarios articles.
The article Germany is afraid: it has replaced its dependence on Russia with that on Trump's USA comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-germania-ha-paura-ha-sostuito-la-dipendenza-dalla-russia-con-quella-dagli-usa-di-trump/ on Fri, 10 Jan 2025 10:00:20 +0000.