STEVE INSKEEP, host:
If you want to understand the power that Russia gets from its energy industry, consider just one fact. Russia sends natural gas to a number of U.S. allies. Those allies depend on it more and more. And they're getting a reminder of Russia's power right now. Russia shut off the gas to its neighbor Ukraine. And it appears that less and less gas is passing through Ukraine on its way to a country at the heart of Europe - Germany. This morning we'll continue our reports on Russia's giant gas company known as Gazprom. NPR's Gregory Feifer reports from the country that's Gazprom's biggest customer.
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GREGORY FEIFER: This is Potsdamer Platz at the heart of Germany's capital, Berlin. This square with its soaring steel and glass roof is surrounded by corporate headquarters and a massive entertainment complex. It was built on what was once desolate wasteland, the site of the Berlin Wall.
Thousands of businessmen, shoppers, and filmgoers throng Potsdamer Platz. Despite the current financial crisis, the square is still a symbol of Germany's economic success. But that success depends on imported energy. Russia, the World War II enemy that split Germany in half, now supplies it with more than 40 percent of its natural gas.
Critics, especially in the United States, say control over energy supplies gives Moscow more power to influence Europe today than the Red Army did during the Cold War. Harvard University's Marshall Goldman says the threat was made clear when Moscow first shut off gas to Ukraine in 2006 and supplies to Western Europe were also disrupted.
Dr. MARSHALL GOLDMAN (Associate Director, Harvard Russian Research Center, Harvard University): It intimidates the country. And in a sense, it neutralizes the country. And so if you look at Germany's policies after that incident, they become much more timid in challenging some of the things that countries might do that would upset the Russians.
FEIFER: Last November, the Bush administration campaigned to put Ukraine and Georgia on a path to NATO membership, an issue that's provoked fury in Russia. Despite international outrage over Russia's summer invasion of Georgia, German Chancellor Angela Merkel led the opposition to Washington's plan, and the U.S. was defeated. At the same time, Germany blocked proposed European Union regulations that would have restricted foreign companies from buying European energy utilities, a policy that could have slowed Gazprom's advance into Western Europe.
Meanwhile, despite the financial crisis, Gazprom is going ahead with plans to build a pipeline to Germany directly from Russia, cutting out transit countries such as Ukraine. The head of the North Stream pipeline project is none other than Germany's former chancellor, Gerhard Schroeder, who took the job only weeks after he left office.
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FEIFER: German high school students in the Baltic Sea city of Rostock play a Russian-language board game. It's part of a competition held in schools across the country, sponsored by Gazprom. The Russian monopoly has spent a lot of money on its public relations campaign in Germany, and it seems to be working. University student Francisca Ullman, who barely remembers the Cold War, says cooperation with Russia is the future for Germany.
Ms. FRANCISCA ULLMAN (German University Student): (Through Translator) It's smarter to have an energy partnership with Russia because it's much closer than, say, the United States.
FEIFER: Germans say Russia's need for German investment makes their relationship one of co-dependence. But above all, politicians say, Germany, which is phasing our nuclear power, simply has no other option. Ekhard von Klaeden of Merkel's center-right Christian Democratic Party is a well-known Russia critic. But even he praises the new North Stream pipeline, saying it will help Germany guarantee energy supplies to other European countries.
Mr. EKHARD VON KLAEDEN (Member, Christian Democratic Party): The answer has to be a network of pipelines within Europe. And if the North Stream project is integrated in this way, I don't see this reason for fear and concern.
FEIFER: It's difficult to find Germans in positions of influence who will express concern about Gazprom's growing penetration of Europe's energy market. Those outside Europe who do worry about Gazprom's widening influence think the company has been successful in persuading European countries to consider their own national interests ahead of a unified European energy strategy. Celeste Wallander of Georgetown University in Washington, D.C., says Gazprom has been cultivating Western energy companies to act as lobbyists for Russian interests.
Professor CELESTE WALLANDER (School of Foreign Service, Georgetown University): There are a lot of European business people making a lot of money by being willing to make deals with Gazprom. And those business elites, say, in Germany most clearly, are obviously influential in the politics and policies of their own country.
FEIFER: Germany and other European countries have repeatedly promised to diversify their energy supplies, but their dependence on Russia keeps growing while Gazprom pursues its strategy of controlling the entire gas supply chain from Siberia direct into the homes of millions of European consumers. Gregory Feifer, NPR News, Berlin.
INSKEEP: Tomorrow, we'll go the Balkans, to Serbia, where Gazprom has agreed to buy control of the country's entire oil and gas industry. And you can trace how Russian gas reaches Europe at our Web site, npr.org.
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