Merkel Wants $10 Billion To Expand Russian Subsea Gas Pipeline

baltic-gas-pipelineBy Weixin Zha and Anna Shiryaevskaya (Bloomberg) Hidden by pine forests near the deserted site of what was once East Germany’s biggest nuclear reactor, two shiny pipelines emerge from the Baltic Sea to mark the spot where Chancellor Angela Merkel is trying to secure the country’s energy future.

Not far from the Hanseatic town of Greifswald — an area Merkel represents in parliament — the chancellor wants a $10 billion pipeline expansion built to increase the amount of Russian natural gas imported from Siberia, more than 3,000 kilometers (1,864 miles) away.

The project, led by Russia’s state-run Gazprom PJSC, is intended to bolster German confidence that it has enough gas to underpin an unprecedented transition from the coal and nuclear plants, which are being closed, to a future dominated by renewable energy.

But the plan has opponents, both close to home and further afield.

People living in the sparsely populated area have filed almost 160 objections. Local approval is still pending and the site also requires removal of two shipwrecks sunk by the Swedish navy in the 18th century. European allies have also objected — worried that the project will deepen Europe’s reliance on supplies from an increasingly antagonistic Russia — and U.S. lawmakers have proposed stiffer sanctions on energy companies that do business with Russia.

“There are not many other places apart from Russia where Germany can get a lot of gas quickly,” said Jonathan Stern, chairman and senior research fellow at the Natural Gas Research Programme of the Oxford Institute for Energy Studies.

Already Europe’s biggest gas user, Germany gets about 40 percent of what it consumes from Russia, the world’s largest exporter, according to industry consultant Wood Mackenzie Ltd. in London. That dependence is only going to increase by 2025 to more than 50 percent, especially with output from the Netherlands, Germany’s western neighbor, set to drop in coming years.

Bloomber news.