The tiny town where Germany’s Russian pipe dream became a nightmare – POLITICO

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LUBMIN, Germany — Standing onstage in a tastefully lit auditorium just north of Lubmin on Germany’s Baltic coast, Angela Merkel and Dmitry Medvedev were all smiles. It was November 8, 2011, and the scene was set for a geopolitical photo op for the ages.

Rubbing shoulders with the German chancellor and the Russian president were French Prime Minister François Fillon, Dutch premier Mark Rutte and Günther Oettinger, the EU’s energy commissioner. Together, they laid their hands on a big — fake — gas valve and turned the wheel. The stunt was designed to symbolize the opening of a 1,200-kilometer pipeline which would go on to deliver up to 55 billion cubic meters of gas from Russia to the EU every year.

Speaking to an audience of Germany’s political and business elite that day, Medvedev hailed a “new chapter in the partnership of Russia with the European Union.” Merkel said the pipeline was proof “that we feel sure of a secure and resilient partnership” with Moscow in the future.

Nord Stream 1 was born.  

Energy crisis ground zero

In the story of Europe’s energy crisis, the tiny German town of Lubmin, is ground zero.

With just 2,100 inhabitants on Germany’s Baltic coast in the northeastern state of Mecklenburg-Vorpommern, Lubmin — which neighbors the electoral district that Merkel represented for 31 years — is where the disputed, lucrative and now all-but defunct Nord Stream gas pipelines make landfall.

With its whispering conifers, seaside apartments and genteel boardwalk, it doesn’t look like the kind of place where the tectonic plates of energy geopolitics shift. But it was here, eleven years ago this month, that the era of German and European energy dependency on Russia reached its apogee, with the lavish inauguration ceremony for Nord Stream 1 that many of those present now have good reason to profoundly regret.

And it is here, in a few weeks’ time, that a new energy milestone will be laid. With the arrival of a vast floating liquefied natural gas (LNG) terminal, Lubmin’s industrial harbor will open up to shipments from the U.S., the Middle East and other suppliers, reflecting the great energy switchover that Europe is undergoing in 2022. The surge in LNG demand is a direct result of Europe’s sudden need to ditch its addiction to Russian pipeline gas and find a replacement after the Kremlin cut deliveries.

Although LNG supplies are uncertain — and currently expensive — they represent Europe’s best hope for energy security after Russia’s invasion of Ukraine upended global markets. For Germany, that transformation too begins in Lubmin. 

Former ways of thinking collapse 

The need for change is recognized even by those in the town who used to be cheerleaders for Nord Stream. Lubmin profited significantly, first from the arrival of construction workers building Nord Stream 1 and later Nord Stream 2, and then from tax revenues that amounted to €2.5 million last year alone.

But, says the town’s mayor, Axel Vogt, speaking in his spotless harborside office, a few hundred yards from where the Nord Stream 1 pipes come ashore, the “former ways of thinking have collapsed.”

Vogt was one of the 450 guests present at the 2011 inauguration. He remains forgiving of the economic motives of that time. “There were certainly good reasons for it. It was good gas, reliably available in appropriate quantities and cheaply priced.” 

But even he, a former advocate for the €7.4 billion Nord Stream 1 and its ill-fated sister project Nord Stream 2 (estimated to have cost €11 billion, but which never delivered a single molecule of gas) now recognizes the limits of Europe’s previous approach. 

“From today’s point of view, it is certainly true that this dependence has led us into this energy crisis,” he says — although he primarily blames Germany’s failure to rapidly accelerate its renewable energy infrastructure to replace the need for Russian pipeline gas.

LNG future

Vogt believes that Lubmin’s future lies in hydrogen projects. But for now, LNG is the fuel urgently needed to keep the lights on in Europe. In Lubmin itself, Vogt says, they have stockpiled fuel for the fire department, set up an emergency generator at the seaside resort, and will not be putting Christmas lights on the lamp posts. 

Looking out at the industrial harbor, he points to where the new LNG “storage and regasification” ship will be moored and reels off the vast proportions of what will be a new landmark, towering over the docks and the conifer woods that line the shore. 

“Two hundred and eighty three meters long, 44 meters wide, above 40 meters [high] … like a big cruise ship,” Vogt says. “She is originally from the Far East, coming through the Red Sea and the Mediterranean and will now sail towards the Baltic.”

The ship in question will be the Neptune, Deutsche ReGas, according to the private company that will operate Lubmin’s Deutsche Ostsee LNG terminal, confirmed. A so-called floating storage and regasification unit, the Neptune can store gas in its liquefied state at around minus 160 degrees Celsius. When required, the LNG will be warmed using sea water or antifreeze until it returns to its gaseous state, and then transferred via pipes off the ship and into the German gas network.

The terminal will have the capacity to import 4.5 billion cubic meters of gas a year — a fraction of what was coming in via Nord Stream 1. But there are plans for further LNG capacity in Lubmin via a state-funded project, due to begin in 2023. Across Germany, five other state-backed floating LNG terminal projects are also in development.

Lubmin’s privately backed initiative is likely to be among the first out of the blocks this December. A short, 450-meter stretch of pipeline, built by the company Gascade, is expected to connect it to the gas network. The plan has been subject to criticism from environmental groups concerned about the consultation process with civil society but, if the timetable holds, gas is scheduled to flow directly from Lubmin’s LNG facility into the country’s domestic pipelines from December 1.

Unique shift 

That symbolic moment will reflect the wider gas supply shift taking place not just in Germany, but across Europe. LNG supplies went from 19 percent of the EU’s gas imports in August 2021, to 41 percent in August 2022, while Russian pipeline gas declined from 41 percent to 9 percent in the same timeframe, according to EU data. Europe has been replumbed.

“I cannot recall any non-wartime event like this,” said Georg Zachmann, senior fellow at the Bruegel think tank, which has been tracking changes in the EU’s gas supply. “Even in the [1970s] oil crisis, oil became more expensive but it was still coming from the same regions. This shift is unique.”

LNG dependency will not be without its risks, Zachmann said. Supply is anticipated to be tight in 2023, according to several leading experts including the International Energy Agency’s Executive Director Fatih Birol. And the climate implications of locking Europe into further, potentially long-term contracts for gas are obvious. “European governments used to tell everybody to ‘keep it in the ground.’ Now we are asking people to ‘dig, dig, dig.’ That’s a bit worrisome,” Zachmann said.

But the diversification of Europe’s gas supply away from extreme dependency on Russia can only be good for long-term energy security, Zachmann added. “Germany was dependent for 55 percent [of its gas] on Russia. That was outright crazy. LNG is a much more versatile way of getting energy into Europe.”

One of the European leaders present in Lubmin at the Nord Stream inauguration, 11 years ago, agrees.

“It’s a permanent change,” Günther Oettinger, the former EU energy commissioner, said in a telephone interview. “LNG is not as cheap as pipeline gas was and is, but Germany is not willing to use its own fracking gas options, so imports via LNG ships are a must.”

Silent pipeline

Today in Lubmin, the Nord Stream 1 facility — where the 2011 inauguration was held — is sealed off and under strict security protocols. Since the Nord Stream pipelines were subject to suspected sabotage in September, the town — with its abundance of energy infrastructure — has been on high alert, says Vogt.

“Everything happened very quickly,” he recalls of the days following the attacks on Nord Stream — which remain under investigation but which most observers in the West attribute to Russia. “The safety authorities were on the site, the police units, the port authorities … As soon as [the gas leaks] became known, we sat around this table here … and discussed how we can immediately increase [security.]” 

It is not unusual to see police on the road to the industrial harbor these days, Vogt said. Deutsche ReGas is similarly anxious. A POLITICO request to view their LNG facility under construction was turned down, with visits to the site being strictly limited for security reasons.

As for whether gas will ever flow again through the Nord Stream pipelines, Vogt predicts such a thing will now only be possible with the end of the war and the reestablishment of trade relations with Russia. And that is if the pipelines are even usable. 

The German government said at the end of October that the “technical availability” of the second Nord Stream 2 pipeline — claimed by Putin to be the only of the Nord Stream pipes still operational following September’s explosions — is in fact “not a given.”

The Nord Stream era may well and truly be over.

The mayor of Lubmin Axel Vogt, whose office is just a few hundred yards from where the Nord Stream 1 pipes come ashore, says that the “former ways of thinking have collapsed” when it comes to pipelines | John Macdougall/AFP via Getty Images

The energy overhaul may also spell the end of a geopolitical chapter for Germany and for Europe, Oettinger said, reflecting on the lessons learned since the smiles and photo ops at Lubmin’s 2011 opening ceremony.

“Even in Cold War times, gas was not a weapon of politics,” he said. “The German thinking was that it would flow [from Russia] whatever happens. Looking back now, it was a wrong analysis — but it was an analysis from all German parties.”

“Since Willy Brandt’s time as chancellor, our narrative was Wandel durch Handel — change by trade,” he added. “I think in general this idea is not wrong. If you meet people, if you are exporting and importing, it may bring people together. It may bring governments together.”

“But this idea underestimated the war criminal Putin,” he said.

Europe’s dependency on the Kremlin is not wholly over, however.

While most of the LNG imports into Europe this year have come from the U.S. and Qatar, there has also been a rise in imports from Russia.

The amounts are fairly small compared to the huge drop in Russian pipeline gas in Europe. But it is likely that Russian LNG will continue to flow into Europe for some time yet.

Some of it might even make landfall in Lubmin. 

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