Bringing One’s Own House into Order: Tensions between Protectionism, Globalization, and Europeanization in West German Energy Policy

The end of the 1960s marked a crossroads for the Federal Republic’s energy sector. In response to the continued underperformance of the German-owned downstream, in 1969 Economics Minister Karl Schiller announced a “new oil policy” fixed on diversifying the national source basis in large part through the creation of a government-facilitated conglomerate of privately owned German oil companies (Deminex). The following year, price and political turbulence in MENA began disrupting the cheap and steady flows of crude to which the West Germany industry had become accustomed. Were this not enough, American and French concerns continued making bids for the few German companies that were successful enough to compete with the majors in the domestic downstream. The hitherto laissez faire approach petroleum policy was not fit to contend with this confluence of potential crises.

This paper will investigate the tensions between West German economic liberalism, new oil policy protectionism, and the necessities of inter- and intra-European collaboration in energy systems development during the pivotal period between 1967 and 1975. It will argue that, although federal efforts to protect the German character of the domestic oil industry did little to support energy security in themselves, the new policy’s promotion of source and feedstock diversification succeeded. Moreover, it integrated West Germany even more deeply into European networks of cross-border energy flows as well as the global hydrocarbon trade. This facilitated an international interdependency that granted a flexibility to the oil and gas industry that a successful protectionist national energy policy would have proscribed.