It is commonly believed that importing more energy poses a threat to the security of our energy supply, and that the related costs are a burden on the economy. Neither fear is well founded. In fact, the energy supply functions best when markets are highly internationalised and interconnected. What’s more, Germany benefits from the revenues earned by the oil-producing countries.
With energy resources scarce and becoming scarcer in Europe and Germany, large amounts of oil, gas and coal have to be imported from third countries. But the percentage of imports tells us little about the security of our energy supply. It is also important to look at the role of imports in our energy mix and diversification structure.
Crude oil and petroleum products are the most important sources of energy in Germany and Europe, accounting for roughly one-third of the energy that is consumed. In recent years, there has been an increase in the percentage of imports from third countries (outside of the European Free Trade Area). Today they make up 66 percent and 81 percent of the total in Germany and Europe, respectively, and those figures are increasing. However, there is a relatively low level of market concentration, and at least in the EU it does not appear to be rising. Even if energy resources were no longer available from certain countries, switching to other suppliers is easier because of the liquidity of the market for oil and the flexibility of transport options.
Moreover, higher oil revenues have led to significant investments by the oil-producing countries. This has benefited Europe and particularly the German economy, with its focus on the production of capital goods. Over the past few years, roughly 7.5 percent of German capital goods exports have gone to the oil-producing countries, compared with only about 3.5 percent at the turn of the millennium.
With its open economy, Germany is in an exceptionally good position to benefit from international trade. This has proved true for industrial goods and services, and it may well be true for energy as well. The energy supply is at greater risk when markets are isolated and supply routes are limited.
Furthermore, the transition to greater energy efficiency and increased use of renewables is more likely to be achieved through international networking than by attempts at self-sufficiency.