What Novak and Altmaier will discuss at the Russian-German Raw Materials Forum
Another German Week has started in St. Petersburg. Every year hundreds of events and interactive projects - film screenings, concerts, exhibitions, seminars, and business forums - take place within the framework of this project. Forpost decided to find out whether Germans are in reality interested in developing economic, cultural, and scientific relations with Russia and, in particular, with the city on the Neva? Or is it more of a tribute to a tradition that will soon die out?
Last year, our trade with Germany dropped by 21% to $41.9 billion. Moreover, the trade balance was negative, i.e., for the first time in a long period our products were in less demand in Germany than the German ones in our country. What conclusion can be drawn from these figures? The first thing that comes to mind is that Berlin is gradually winding down its cooperation with Moscow, as many of our detractors would like it to happen. In reality, this is certainly not the case. And here is why.
Germany is still second on the list of Russia’s main economic partners. The trade with China, which tops the list, fell only 6.2 percent to $103.9 billion, but the explanation is simple: the Middle Kingdom was the first country to recover from the pandemic and began importing oil in unprecedented quantities last spring. But business relations with the Netherlands (3rd place), which are also traditionally strong, declined much more - by 41%, to $28.5 billion. Clearly, for the same reason as in the case of Germany: the coronavirus knocked the GDP of all European countries and the most serious impact on their foreign relations.
And what about Great Britain (4th place), you may ask? Not only has our trade with the UK not declined, but it has even increased, by 53%, to $26.5 billion. The secret of this metamorphosis is simple: in 2020, London was rapidly buying up precious metals, which are traditionally very popular with investors in times of crisis. So, last year, Russia sold 113.5 tons of gold to the United Kingdom for the astronomical sum of $ 5.3 billion. By the way, it should be said that the politicians and bankers of Foggy Albion did not go wrong: the average price of an ounce was $ 1,450, and now it is far from its maximum values, but still worth almost a quarter more.
In short, despite the downward trend, the Germans still see Russia as a reliable partner, and they still consider the energy sector to be the basis of our cooperation. This is confirmed by surveys conducted in Germany. For example, only 13 percent of the respondents were against the completion of the Nord Stream-2 pipeline, whereas 73 percent of the German citizens believe the project is very important for the country. Furthermore, 90% of the respondents believe that the basis of the anti-Russian escapades of Washington is the desire to sell more of its LNG to the EU. These are the findings of the Forsa sociological institute.
Angela Merkel expressed the same opinion. At an online meeting of the Parliamentary Assembly of the Council of Europe, which took place on April 20, she said that “Germany has decided to build Nord Stream 2 and further develop business relations with Russia.” The Chancellor recalled that in the updated gas directive, which came into force in May 2019, the European country, whose offshore pipeline comes ashore, has the right to decide whether it is subject to the provisions of the Third Energy Package.
To say that this sounded like a thunderbolt would be a manifest exaggeration. Merkel herself and other German politicians have repeatedly expressed their support for the trans-Baltic project, which is not surprising. Berlin plans to phase out nuclear and coal-fired generation by 2022 and 2038, respectively. This means that natural gas will play the role of a “safety cushion” that can be used during peak loads on the grid.
The point is that the amount of electricity produced by burning it in thermal power plants can be varied - producing more or fewer kilowatt-hours depending on the demand of households and industrial enterprises. This will not work with wind turbines: their blades rotate as the weather conditions allow. In other words, the consequence of surges in electricity consumption in the case of complete abandonment of traditional energy resources will be numerous blackouts.
Achieving carbon neutrality in one sitting, of course, is impossible. At the first stage of this path, it is necessary to stop using the dirtiest raw materials in the fuel and energy complex, i.e., fuel oil and coal, replacing them with less environmentally hazardous methane. Together with renewable energies, it must become the basis of Germany’s energy mix for the coming decades. Delegates of the Russian-German Raw Materials Forum, which was created in 2006, repeatedly voiced this point of view. Recently, this forum has been one of the few places where politicians, businessmen, and scientists from both countries, despite the cooling of interstate relations, could discuss cooperation in the energy sector and establish business contacts.
The upcoming, already the thirteenth conference will be held online on April 29 and 30. Participants on the Russian side will include Deputy Prime Minister Alexander Novak, Minister of Industry and Trade Denis Manturov, Rector of St. Petersburg Mining University, and one of the initiators of the forum Vladimir Litvinenko, Deputy Energy Minister Pavel Sorokin, and Deputy Chairman of Gazprom Oleg Aksyutin. German - Peter Altmaier, German Minister of Economy and Energy, Gerd Müller, Minister of Economic Cooperation and Development, Michael Kretschmer, Prime Minister of Saxony, Ulf Heitmueller, Chairman of VNG, and many other well-known personalities.
The plenary discussions at the forum will focus on such topics as the impact of the European Green Deal on cooperation with Russia, the development of resource regions, and thawing permafrost. In addition, the parties will also discuss the potential for cooperation in such a popular area in the West as hydrogen.
Despite the fact that most of the Russian participants look at its implementation as a global energy resource with some skepticism, we have something to show Germans. The St. Petersburg Mining University, for example, is currently conducting research on the transport of nature's lightest gas.
According to some experts, hydrogen combined with renewable energy sources should allow Europe to reduce its carbon footprint to zero and, consequently, to minimize pollution. Is this really the case?
The lack of scientific breakthroughs in this area is one of the main reasons why hydrogen power has not yet become a reality. After all, it is impossible to load H2 into the existing pipeline instead of methane: its molecule is so small that it can penetrate the crystal lattice of steel and destroy it pretty quickly, especially in the places of welds. But how, then, is hydrogen to be exported to Europe?
According to scientists from Russia’s oldest higher technical school, this can be done through the technology of its transportation in a bound state. That is to synthesize methanol, ammonia, or cyclohexane at gas chemical plants, load these substances into tankers and produce hydrogen from them at the point of shipment.
However, this is quite a distant prospect, while the completion of Nord Stream 2, on the other hand, is a matter of the foreseeable future. Germany may receive the blue fuel from this pipeline as early as this year. And if the next winter in Europe proves to be as cold as the last one, this situation will come in handy for the people of Germany, Austria, and many other countries, including the Czech Republic, which are supposed to receive some additional volumes of gas from Russia. After all, this will not only reduce their costs for electricity and heat but will also enable their national governments to reduce the amount of coal combustion in thermal power plants, i.e., to make another confident step towards carbon neutrality.