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Germany bails out its largest energy company after Russia cut off gas supply

SCOTT SIMON, HOST:

The German government has bailed out one of the country's largest energy companies. Uniper nearly went bankrupt after Russia cut off gas supplies to Germany. Moscow resumed the flow of gas at a reduced level this week, but their fear is Russia could cut it off again.

NPR's Rob Schmitz joins us. Rob, thanks for being with us.

ROB SCHMITZ, BYLINE: Thanks for having me, Scott.

SIMON: Let's start with the bailout. Germany bought 30% of Uniper. What's the significance of this?

SCHMITZ: Yeah, this is a big deal. Uniper is Germany's largest importer of Russian gas. And when Russian energy company Gazprom began to limit its pipeline gas to Germany earlier this year and then completely cut it off for a 10-day period earlier this month for what it called maintenance issues - but for what many believed were political reasons - this meant a loss of significant revenue for Uniper. The company requested state aid two weeks ago, and yesterday, that request was met by Germany's government, purchasing nearly a third of the company, essentially bailing it out. Germany's energy minister justified the move by saying that allowing Uniper to fail would have been a Lehman moment for the country.

SIMON: Germany's economy is especially vulnerable - right? - because it relies so heavily on Russian energy?

SCHMITZ: That's correct. Prior to the Russian invasion of Ukraine, Germany relied on Russia for 55% of its natural gas. Germany's been able to reduce that dependence since the war started, but it still relies on Russia for more than a third of its gas. And when a Russian company decides to simply reduce or even cut off those supplies, it has massive consequences for Germany's economy. And it's this lack of clarity that has energy experts like Matthias Lang worried. I spoke to him about this, and here's what he said.

MATTHIAS LANG: The important part going forward is how much gas will we have coming into Germany? In particular, how much gas will be available to also put in storage so we have some additional buffer to get through winter? I think the key takeaway from what we've seen in the past couple of weeks is that we have no security on the Russian gas supply side that we will get what we need.

SIMON: What more is the government doing to try and protect the country from another gas crisis nearby?

SCHMITZ: Well, it's pretty busy. Germany's parliament has passed a law that fast-tracks the construction of liquefied natural gas terminals, and the first terminals are scheduled to be finished before the end of the year. Germany's also reopening coal-fired power plants that it had closed as part of its commitments to someday become carbon neutral. Another step that some are calling on the government to do is to keep the country's three remaining nuclear power plants running after the end of the year. All three are scheduled to shut down by the end of the year as part of a government plan to be free from nuclear power. But so far, the government has said that it's not interested in keeping those plants running.

On a local level, we're seeing more and more German cities release plans to shut off their city lights at night and to encourage residents to take shorter showers and to be more prudent with their electricity consumption, given that Germany's energy supply is no longer guaranteed. But, you know, the real key here is German industry. They can make a dent in energy consumption, but to do so could mean loss of revenue, and with that, of course, jobs.

SIMON: NPR's Berlin correspondent Rob Schmitz. Rob, thanks so much for being with us.

SCHMITZ: Thank you. Transcript provided by NPR, Copyright NPR.