Pres. Donald Trump has been spending some time overseas, and as always he made all kinds of headlines. One of his first stops was a nice friendly breakfast in Brussels with NATO Secretary General Jens Stoltenberg. It got tense as Pres. Trump laid into one of the most important countries in NATO, saying that “Germany is totally controlled by Russia.” Some reporters watching the painful exchange said that Pres. Trump’s advisors, including his Chief of Staff John F. Kelly, looked painfully uncomfortable. The White House would later (hilariously) clarify that Gen. Kelly “was displeased because he was expecting a full breakfast and there was only pastries and cheese.”
So what was this awkward exchange really about? Natural gas, of course. Germany is the world’s largest importer of natural gas. Half that gas comes from Russia. In fact, Germany gets 50% of its natural gas, 40% of its crude oil, and 30% of its coal from Russia. The importance of the relationship goes both ways, as Germany is Russia’s biggest export market for natural gas in Europe.
NATO, of course, is an alliance of countries set up to defend against Russia. Pres. Trump’s complaint is that America is spending money defending NATO countries like Germany, while Germany is paying money to Russia instead of spending that money to defend against Russia. His logic makes sense to a lot of people, though countries have generally treated commercial deals and national security as separate.
Pres. Trump’s biggest complaint is about a project called Nord Stream 2. This is an 800-mile-long pipeline that will run underneath the Baltic Sea. As the name implies, there is already a pipeline called Nord Stream that covers that route, and Nord Stream 2 will roughly double the capacity of that line. Russia exports about $250 billion in gas per year to Germany right now.
It is also worth pointing out, as Pres. Trump did, that there is a bit of shadiness associated with the Nord Stream 2 project. Former German Chancellor Gerhard Schroeder was a big supporter, and after he was voted out in 2005, but before leaving office, he hastily signed a deal with Russia setting the project in motion. A few weeks after signing that deal he was running the project himself. He was then hired to sit on the board of several other Russian-involved projects. He recently became the chairman of Rosneft, Russia’s largest oil company. In short, Russia made him rich after he approved the Nord Stream 2 project.
Russia has responded to Pres. Trump’s statement by saying he is trying to bully Europe into buying American energy, such as liquefied natural gas. Here in the Marcellus Shale region, there will not be too many people upset about Pres. Trump pushing American gas on the world. If you want to help supply that gas, give us a call at all 412-212-7517.