Transatlantic Rift

Let's Talk About Sanctions

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Have your people call my people. Source: The Washington Post/Getty Images

New US sanctions against Russia threaten to undermine our international cooperation in energy policy. This makes it all the more important for Europe and the United States to agree that the importation and exportation of energy cannot become a political weapon.

We need to use energy more sparingly in Germany and in Europe, and speed up the transition to renewable forms of energy. This makes both economic and environmental sense. We have already chosen this path in Germany with the Energiewende, our transition to green energy. And we are making good progress, with about 35 percent of the electricity we consume today coming from renewable energy. The reliability of the energy supply is of critical importance to every country. This applies to Germany and, of course, to the United States and Russia. In our case, another consideration is that we, like many other countries in the European Union, still rely on imports to address a large portion of our energy needs.

In the age of globalization, energy markets are increasingly interdependent. This affects energy prices and, of course, the development of natural gas prices in the United States and in the European market. This is precisely why it is so important that we agree on one thing, both within the EU and with our American and Russian partners: Energy imports and exports must never become a political or economic weapon. This hasn’t been the case yet, and it should not be in the future.

We cannot accept the extraterritorial application of these US sanctions against European companies.

I regret that the coordinated approach of Europe and the US has now been called into question by the current legislation on the imposition of new sanctions against Russia. Since 2014, Europe and the US have closely coordinated their reactions to the annexation of Crimea, in violation of international law, and Russia’s actions in eastern Ukraine. Unfortunately, this synchronized approach now threatens to be interrupted. I am especially troubled by the extraterritorial threat of sanctions against non-US companies that are involved in the construction, operation and maintenance of pipelines used to export natural gas and oil from Russia. In other words, if a European company participates in the expansion of the European energy supply, it can expect to run into difficulties with its business activities in the United States.

We cannot accept the extraterritorial application of these US sanctions against European companies.

I am convinced that the US government is aware of this and that President Donald Trump will use the latitude he has under the law to prevent such sanctions from being imposed. It would be a clear signal that the close coordination between the US and the EU will continue.

Every country makes its own decisions on how to structure its energy policy and its energy mix. Because of the Energiewende, we in Germany rely on more renewable energy and greater energy efficiency. In doing so, we are making our energy supply cleaner and simultaneously making ourselves less reliant on energy imports. Market participants are the ones who ultimately decide what gets purchased. This is an area where we cannot erect trade barriers, especially not to support our own companies. The European internal market is open and free for all gas imports, including liquefied natural gas (LNG) from the US. However, it is ultimately the market and gas traders who decide which product they buy, based on demand and price.

After all, buying natural gas is also a matter of the security of supply. Europe has well-functioning, highly liquid gas markets, and the security of supply in Germany and Europe is high.

We want to and will guarantee this high security of supply in the future, and we need gas pipelines for that. A policy of dialogue is more necessary than ever, and even the new US legislation repeatedly emphasizes this. That is why I would like to see the US government talk to the EU and its member states soon, so that we can determine how to reinvigorate the successful cooperation of recent years.

We are prepared for dialogue at any time, and we hope that our America partners will accept our offer to talk!

 

This article was originally published in Handelsblatt’s sister publication Wirtschafts Woche.

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