Germany-Energy and Natural Resources

Like most modern states, Germany relies principally on fossil fuels as sources of energy. About 40 percent of German energy consumption comes from petroleum, largely for trucks and automobiles. About 30 percent comes from domestic coal deposits, half from lignite, or brown coal, in the east and the other half from anthracite located in the west. Natural gas provides about 17 percent of energy consumed, and nuclear energy about 10 percent. Other sources of energy, such as hydroelectric, solar, or wind-powered electric power plants, are relatively insignificant. Most production is in private hands.

Electrical power comes almost equally from three sources: the largest (31 percent) is generated by lignite, the next largest (28 percent) from nuclear reactors, and the third largest (26 percent) from anthracite. Natural gas provides about 7 percent. Those proportions will undoubtedly shift over time because of the high pollution levels generated by the relatively inefficient lignite, especially in the new Länder , where it accounts for over 90 percent of electricity production (see table 17, Appendix). The public's aversion to nuclear power that developed in Germany in the 1980s will likewise cause this source of power to become less important. Natural gas will become more significant.

The necessary reduction of brown coal consumption is unfortunate for the nation's economy because it and anthracite are Germany's only significant natural resources. As of 1993, Germany was the world's largest producer of brown coal, mining nearly twice as much as the next greatest producer, Russia. Anthracite mining is also significant, and Germany was the world's ninth greatest producer of this substance in 1993.

Germany has over twenty nuclear reactors, most of them small and having production levels below 2,000 megawatts per reactor. It has virtually no domestic uranium deposits and must import enriched uranium for its reactors. Most of the reactors in operation in the early 1990s were built during the 1970s and early 1980s. Reliance on nuclear power has become controversial, however. Because of the controversy, no new nuclear reactor has entered service since 1988. A number of older reactors dating to the 1960s have ceased operations. A major international energy crisis would be needed to renew impetus in Germany's nuclear energy program because the country is densely populated, and most of its inhabitants do not want a reactor near their houses or offices.

Germany must import almost all the oil and gas that it uses. In 1993 the three largest suppliers of crude petroleum were Norway (18.4 percent of the total), the Commonwealth of Independent States (CIS--see Glossary) (17.4 percent), and Britain (12.4 percent) (see table 18, Appendix). Germany has its own modest oil deposits, estimated in 1990 at 50 million tons, in the North German Plain. It has a share of North Sea gas reserves and production, with reserves estimated in 1990 at 9.9 billion cubic meters. But these are not adequate long-term sources. Thus, Germany will increase its imports of oil and gas, most likely from Russia. East Germany relied heavily on Soviet gas before unification, and united Germany will want to purchase petrochemicals from Russia to enable Russia to pay for the German manufactures that Russia is purchasing.

Like all modern economies, Germany has become increasingly cost conscious and conservation conscious about energy consumption. Whereas GDP in West Germany rose by about 50 percent from 1973 to the early 1990s, energy consumption rose by only 7 percent.

The Financial System

Data as of August 1995