Germany Does An About Face In A Desperate Effort To Keep The Lights On 

Germany has spent the last fifteen years doing two things: shutting down every coal-burning power plant in the country, and shutting down every nuclear reactor. They succeeded in shutting down coal. They came close to succeeding in shutting down nuclear. Now they are on the brink of the greatest energy shortage of any major industrialized economy in history.

Nice job, Angela Merkel. Nice job, Olaf Scholz. You share the prize for the dumbest industrial policy ever. Now Germany is left to pick up the pieces. It’s not going well.

Decisions Based On Climate Alarmism

Germany’s decisions were based on climate alarmism, which has no scientific basis. The climate does change, sometimes radically as in the Medieval Warm Period (approximately 900 AD to 1300 AD), and the Little Ice Age (approximately 1645 to 1725). Note there were no material human-caused CO₂ emissions in those periods and definitely no automobiles.

Climate change is caused by solar flare activity, ocean currents, volcano eruptions, and other powerful and complex natural forces that are barely understood by scientists. There’s no evidence for human causation, no evidence for an existential climate crisis, and no evidence that the planet is even warming today – in fact, we may be headed to a new Little Ice Age based on some indicators.

Climate change is caused by solar flare activity, ocean currents, volcano eruptions, and other powerful and complex natural forces that are barely understood by scientists. There’s no evidence for human causation, no evidence for an existential climate crisis, and no evidence that the planet is even warming today – in fact, we may be headed to a new Little Ice Age based on some indicators.

Still, the Germans had to appease their Green Party fanatics and so set about eliminating coal and nuclear.

What Are The Supplements To Wind And Solar For Baseload Power?

Germany had no substitutes. Wind turbines and solar modules are non-scalable and provide intermittent energy that is unsuitable for the baseload power needed to operate a large-scale power grid. The result was increased reliance on natural gas of which 45% came from Russia.

Since the start of the War in Ukraine last February, one focus of attention has been the energy situation in Western Europe. It was clear that Western Europe (and Germany in particular) were heavily dependent on Russian oil and natural gas for industrial output, transportation, and consumer electricity and heat.

Despite the sanctions imposed on Russia, there was relatively little disruption in oil and gas deliveries to Germany in the early stages of the war. While bank accounts were being frozen and other imports/exports of high-tech goods, strategic metals, and food were banned, the oil and gas continued to flow through the Nord Stream 1 pipeline (Nord Stream 2 is completed but was never officially opened), and other pipelines through Ukraine despite the war itself.

Gradually, oil flows were reduced, but these were easier to substitute by diverting oil tankers to Europe and sending Russian tankers to Asia. Natural gas flows were not greatly diminished. That has now changed dramatically.

Initially, flows through Nord Stream 1 were interrupted by maintenance and a compressor that needed repair. The repair was being done in Canada and it took months to get the compressor moved to Germany and finally to Russia where it could be installed. Then Putin began reducing flows through both Nord Stream 1 pipelines to put geopolitical pressure on Europe.

Putin’s strategy of reducing flows became moot, when three of the four pipelines were sabotaged, probably by the United States. [Ukraine has predictably suggested that Russia sabotaged them itself, citing absurd reasons that have no credibility. The former CIA director also suggested that Russia was the most likely suspect, for equally nonsensical reasons. (Ref 1)]

Russia has lost its pipeline leverage because it cannot easily repair the pipelines in less than six months. Germany has lost its option to arrive at a separate peace with Russia because Russia has nothing to offer without the gas.

German Gas Reserves Are Inadequate And Winter Is Coming.

There has been much reporting about how German reserves have been filled up to near 90% capacity. But this reporting ignores the fact that reserves are only about 20% of what is needed for the winter. So, actual reserves are about 18% of the requirements and will be exhausted quickly. Critically, winter is coming and there is some meteorological evidence that it may be an especially cold, harsh winter.

Germany finally seemed to have got a wake-up call, as reported by the Wall Street Journal (Ref 2)

The German Parliament is considering keeping its last three nuclear power plants up and running for the time being. The decision is not final (the Greens still object), but it is likely to be made in favor of keeping the plants operating for now.

About the Author

Jim Rickards is an American lawyer, economist, investment banker, speaker, media commentator, and author on matters of finance and precious metals. He is the author of Currency Wars: The Making of the Next Global Crisis and six other books.

This article is taken from his “Strategic Intelligence” newsletter. You can learn more about Jim and his newsletters at paradigm.press