Beyond Domestic Politics: Energy Policy in the Transatlantic Relationship

AICGS

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Building a Smarter German-American Partnership

On June 18, Philipp Rösler, Chairman of the FDP and German Minister of Economics and Technology, opened a visit to Washington, DC, with a speech on the three issues at the core of the future of the transatlantic relationship: the ongoing European debt crisis, trade policy, and, perhaps surprisingly, energy policy. While the proper response to the euro zone’s economic travails dominated his speech, the Minister’s inclusion of energy policy marked the tremendous importance of the issue from the German perspective. Germany and the United States, according to Rösler, have significant room to work together on expanding their investment in renewable energy. Unfortunately for German industry, which has a competitive advantage in renewable and efficient energy technology, the discovery of shale gas in the United States threatens to decrease the impetus for cooperation on energy policy between the transatlantic partners.

Rösler identified the Fukushima disaster and the U.S. shale gas discovery as the two key issues confronting German government and business in formulating an effective energy policy. Although Rösler’s ideologically free market FDP has never been fully comfortable with their coalition’s Energiewende, they have reluctantly quieted their opposition in favor of celebrating the convergence of German industry’s prowess in energy technology with a policy of government investment in that sector. Moreover, Germany’s increased demand for an expanded energy network opened an opportunity for further economic integration with the country’s European neighbors, perhaps leading to a common approach to energy policy. From the perspective of coalition partners FDP, Germany’s energy policy is not only important in itself, but also as a building point for greater European cooperation.

Similarly, Rösler called for greater cooperation on energy policy with the United States. While investment in green energy technology had gained ground in the past few years, the discovery of large reserves of shale gas threatened to derail U.S. interest in promoting energy reform. Rösler’s emphasis on the importance of maintaining a focus on renewable energy reflected his interests as economics minister in protecting Germany’s strong and growing renewable energy industry. While the Energiewende promises to buoy the green energy sector, long-term growth will require greater global demand, coming at least in part from the United States, reflecting the application of Germany’s traditional export-based model to the energy industry.

Renewable energy, far from a peculiar fixture of Germany’s domestic politics, has taken a prominent position among the country’s international interests. Rösler’s promotion of energy policy to one of the transatlantic relationship’s three key challenges demonstrates its importance to a German government keen both on accomplishing a successful transition to renewable energy and on enhancing growth in key industries. As renewable energy continues to hold an important place in Germany’s domestic politics, the transatlantic dialogue will likely grow more inclusive of a cooperative energy policy as a vital component of the U.S.-German relationship.