Germany brushed aside U.S. concerns about a major natural gas pipeline that will deliver Russian gas to Europe, suggesting President Donald Trump’s administration appears to be protecting its own interests.
German Economy Minister Peter Altmaier defended the planned Nord Stream 2 pipeline as Chancellor Angela Merkel meets President Vladimir Putin in Russia. Yesterday, the U.S. warned it may impose sanctions to prevent Russia’s gas export monopoly Gazprom PJSC from completing the Nord Stream 2 link under the Baltic Sea.
Russia supplies more than a third of Europe’s gas demand, and its market share is growing as nations led by Germany close their most polluting power stations. Merkel is scrapping coal and nuclear power, making gas increasingly the most important fuel. Altmaier said U.S. efforts to block the link seem to be aimed at protecting Europe as a market for exports of gas in its liquid form from America.
“They are looking for markets, which we can understand, and they can land it here easily,” Altmaier said in an interview with German TV station ARD’s Morgenmagazin program. “But it is much more expensive than pipeline gas, so blocking Nord Stream 2 on its own won’t guarantee exports.”
The remarks underscore a deepening rift between the U.S. and its allies over how to balance efforts to isolate Russia economically with the need to maintain energy supplies. While gas in the U.S. is about third of the cost of the European equivalent, it ends up being more expensive when costs are added to liquefy and ship it on tankers to terminals from Belgium to the Netherlands.
The chart below shows the costs Russia charges key European countries for its gas, with Germany among the lowest.
