breaks in the wall history of East West energy relations interview with Frank Bush, Episode 64. Welcome to the My energy 2050 podcast where we speak to the people building a clean energy system by 2050. I'm your host, Michael LaBelle. This week, we speak with Professor Frank Bush. He is the director of the Center for Contemporary History in Potsdam, and Professor of German and European 20th century history. At the University of Potsdam, we have an in depth discussion about the history of energy relations, the 1970s. This is a formative period for the energy system we see today. In this episode, we discuss how Germany began to see relations with the Soviet Union, or rather, utilizing business as a means to build a bridge where agreement and politics was largely not possible. This rep approachment enabled West Germany to receive Soviet gas will also involve in West German steel mills, producing the pipes that would later be used to ship the gas from deep inside the Soviet Union to the west. Frank describes the policy of OSPE politic as a means of reproach meant with Germany and the Soviet Union. But interestingly, he also describes the West politic, I haven't heard this before, that Moscow had towards the west. So goes both ways. One of the great joys of doing this podcast is listening to the interview as I edit it, actually. And I can say in this episode, there's so much historical information you haven't heard or read in other places. It makes this episode very special, and both understanding the history of energy relations with the Soviet Union and Germany, but also understanding how the energy crisis of the 1970s is shaping our current energy system. So we kind of look at the both historical context in the past, and kind of think about the present crisis that we're experiencing now know how to how these are connected. It is important to keep in mind that the shifting energy landscape, the 1970s, was just as perilous as it is now, with the energy crisis in 1973, and 1979, or we could say those were the peaks with key events. What emerges are relations that are already been built before the crisis hit. So we get into 1960s and have to start even further back to understand how the 1970s unraveled. Frank provides us with historical review and explains why and how energy and the trade of goods served to bridge this east west divide. So always kind of keep in mind this iron curtain that was in place, and what the role of energy was in helping to divide this kind of creating a thought between the US east and west. With conflict in the Middle East pushing oil prices up, the Soviet Union emerges as a stable and reliable supplier for Western Europe. On the other hand, something else in Eastern Europe, for Eastern Europe, such as countries like Ukraine, even Hungary, they are forced to sacrifice their gas supplies for Western Europe. So some times things don't change too much. This episode enables us to trace back some of the present day relations and structures to justifications, the 1970s as to why energy trade should be expanded or was expanded between the Soviets and the Germans. We also provide context that ComiCon country's Eastern satellites basically, and how industries were divided by country and how the Soviet Union was able to succeed economically because of specializations between the different countries. And just to flag one very important section make sure you listen closely as we discuss the rising role and realization of global interdependencies the 1970s That's kind of a key term that I'm exploring more and I find it absolutely fascinating and super important to understand. Just as we throw around the word globalization today, the 1970s emerged as a formative period that shaped the global interdependencies the present day energy markets, that is the oil market, let's say. A final note This interview was done for my current role as an open society University Network Senior Fellow at Chatham House, the Royal Institute of International Affairs. The funding was generously provided to produce the podcast until the end of 2022. So I've got some great interviews coming up. And some amazing in person interviews, actually, I should say, the intent of the my energy 2050 podcast is to spread the knowledge about the energy system, and how it can assist our transition towards a greener future. And now for this week's episode.
I'm here today with Professor Are Frank Bush from the livelite? Center for Contemporary History in Pottstown? Professor Bush, maybe I turned to you for your background, and to explain why, why the 1970s are interesting, and how does energy come into that?
Hello, everybody. So my name is Frank Bush, I'm director of the Center for Contemporary History and professor at the University of Potsdam, Professor for contemporary history means that I've specialized in the last 15 years on the periods and the decades past 45. And am I current, my own my last book deal was the changes in the 1970s, it was called seitan, vendor nonstop non unzipped seas, how tame, it's how the times were changing in the late 1970s, in the year 1979, which was a kind of turning point, but it's a book about the decades around. And then, of course, the oil crisis in 1973. And 1979, these two oil crisis are crucial turning point of the world, to what I researched, were 10 Big turning points in the world, and their relation to East and West Germany. And that's what I'm interested in. I'm interested in German history in a global context and east and west relation. And the oil crisis. And energy in general, is really important for this perception of history. And then
let me go a bit deeper on the East West relations in the 1970s. Initially, the crisis, the first crisis was about Middle Eastern oil. But why would that impact east west relations.
So it was a huge impact on the East West relation, although it didn't start with that. In the movement of the oil crisis in 79, the West became a word that they are completely dependent on oil from the Middle East. And that's quite uncertain whether this oil will flow as probably as it has done so far in the future. And that's why they looked for different kinds of alternative resources. One alternative was local looking for oil in the West. So in the US, in Britain, especially in near Scotland, or in Norway, they tried to find oil, and which was too pricey so far, but now was a rising price that it came profitable to do so. But there were other alternative. And this was energy from Russia, oil from Russia. This has started before in the late 1960s. But now it became much more important that at least parts of the energy were coming from the east. And so one can conclude to this question that this new energy crisis led to a bridge over the Iron Curtain. But it raised also some tensions within the West and within the east.
And the name that comes up often, when we talk about East West relations is Willie brand. And I and I was wondering if you could maybe explain his role in bridging this east west divide around the area of energy.
Hillebrand played from the beginning on an important role. He was a major of West Berlin, in the 1960s. And in this time, he already tried to build bridges over the wall, which was just created when he was a major though that's the moment when he becomes really famous in the wall in the world. And Willebrand when we became Foreign Minister in 1966, he started to develop plane plans, how to get into contact, how to get into official contact with Eastern countries in which we're not existing. Until then, the context to the East were so far done by people from the economy. So in some way, people from the industry, we're replacing the diplomats. And one of the really important group there were those working in the field of energy of steel, and building pipes for the East. And they were in some way the ambassadors to open up this new policy of brand called us politic politics series. So here one can say that the policy of brand was going hand in hand was the energy diplomacy.
So you mentioned about, yeah, there's steel makers, and the people making the pipes as well. What was their role in this because I don't know anything about this.
They have played such an important role. There was until In the early 1970s, there was only one diplomatic contact to the east. And this was a relation to Moscow in 1955. And the so called high Eckstein doctrine, which was the key principle of the foreign policy of West Germany said that no context, no context are allowed to any kind of country who has official relation to the GDR. And of course, all Comic Con states had. So there was no no contact. But instead, people from the steel industry, like Otto Vodafone, among which were organized in the austausch was the doctrine Bucha, the Eastern committee for the German industry, which had a official role, they traveled to Eastern countries like Poland, and so on, from the late 1950s on. And these were the people who made already pipe deals in 1958, building pipes in West Germany, selling them for oil pipelines in the east to one can say that the roots of those famous pipelines, which are discussed nowadays, the time of the Russian war, the roots of these pipelines, say or in 58, when big deals were done with the West German industry in the Soviet Union.
And so actually, because from what I know, from the gas sector, and I think this was later in, this was late in the late 1960s, early 1970s, when they when they agreed to build the gas pipeline to Germany into Austria, there would be a barter system with German pipes then. So you're actually saying then this, this relationship, and commercial relationship with the pipes predates much of this gas discussion, but goes 1950s
Yes, indeed. But this business big business was starting, it was running, but it was stopped in 1962, the United States made said that steel pipes were part of the high technology, which are important for the Soviet military, because they could deliver oil for the army, if there is some kind of invasion of the Saudi the army. And so they forbid, within the Notto, and the so called common list, which prohibited such goods, to sell such goods to the socialist countries. So they stopped these big buy and ends, this is really a hot cup or the germ industry RNOH have followed this. Italy didn't, for example, Great Britain also delivered. But so until 1967, until the ditont is starting. And still, the relation between East and West in general, become more relaxed, also concerning the US is banned for selling pipes. And in 67, the United States are changing their position. And finally, it's possible to sell those pipes. And now these big deals are developing.
And why did the US change their position?
Actually, both sides change their positions and the Soviet Union changed their position they opened up because I talked already about the East politic, the US political brand, but there was also a West politic of Moscow. So they open up got a lot more looking for different reasons for close context to the west to improve their industry. There's another problem the China is has some troubles with the Soviet Union's as pressure at the border. And actually, it's a both China and the Soviet Union are looking for context to the west, in their career
away from each other away from the because there was tension, rising tension between them,
right rising, increasing tension, even some military conflict at the Chinese and Soviet bore in 1969, and 70.
Okay, so maybe to place this in context. And so when we think about present day, it's much about this discussion about gas, kind of, I would say first and then second part is oil. But really the relationship began with this east west will be very broad here. was around oil in the 1960s.
Yes, in January, gas was not so important, the 50s 60s. So the whole boom of the economy and the 50s and 60s was based on oil oil was the clean, cheap energy. And everybody thought that is the future until the early 1970s. And the first pipelines were built for oil and also in 1968 when the first oil from the Soviet Union was coming to Austria was coming to Italy and finally also to Germany. Just a few days after the progress forms were brutally finished by the Warsaw Pact. And so this was oil, but then also gas was becoming more important. And in the late 1970s deals for pipelines were made. Germany builds a pipeline. And because there was no, not that much hard currency within the Soviet Union, there was this exchange, where the extra oil well, the plan was to exchange energy against the steel pipelines from the west.
And we've spoken a lot about Moscow relations with with the West, I guess, but And we mentioned Willy Brandt. But what was the relationship between East Germany and West Germany and what was the role of these, these oil resources or gas resources? In this relationship between East Germany and West Germany,
there was no no kind of official contact between east and west in these days, there was no political letter answered or officially or anything like that. They were just relations by a businessman and the whole US politics, the first context to the east. We're all going from Bonn from the capital of West Germany in these days to Moscow, and also the US politics. First contracts were discussed with Moscow, not with East Germany. Still, the trade of steel was also one of the most important economic bridges between East and West. So there was a certain relation. But East Germany was always a problem when these first energy deals were made also in the 1970s, because it was always checked, what is the status of East Germany? So each kind of context internationally, was checked? Whether this has to do something with the German reunification, or what could it support East Germany. So East Germany was more of a problem than a contact in this context,
I think it's just really important to remember that still, I know when I am teaching my students understanding this divide this iron curtain that was in place, and then compare it to Europe nowadays, it's just dramatically different. And so it's, it's good to remember that there was a split, unfortunately, during this time, but things began, maybe maybe we move more into 1970s. And why was because now we have the big topic of Russian gas. But why in the 1970s was gassing as an important resource.
There was this famous report of the Club of Rome in 1972, is the limit of growth. And the perception also, before the oil crisis was that in a few decades, there will be no oil. And there was a perception that gas reserves were a bit longer, that there was an increasing awareness of environmental questions in the early 70s. Not only in West Germany, also in other states, like the US, and gas was seen as something which is cleaner. And, and also there was a plan to have different kinds of energies. So nuclear power was one new element, which was increasing after the oil crisis and 73. So this is a take off on nuclear power, where most of the power plants are built in the following years, or at least planned. And so the, there was a belief that we, the people on societies need a mixture of different kinds of energy. And it's important to say that those big deals, pipelines against gas was starting before 73 Before the oil crisis, have also already togetherness that there's people that states are dependent. Also the Six Day War in 1967 in Israel, was were really brief sanction of just a few weeks came up was, in some way getting the awareness that oil could be used as a weapon. And gas was something new, which was found in different kinds of countries in the Netherlands in Nigeria, but in some way, the Soviet Union in the 1917 was seen as a reliable partner and it was so the Soviet Union when the delivery started in 73 did deliver quite constantly, and builds but in the trade were paid regularly. So as Well, good expect good experiences. And the diplomats and the files tell that the Soviet Union was seen as more reliable than Arab states.
How How was gas was gas seen as this diplomatic tool to to bridge this east west divide? Or was it seen, just maybe, maybe just well, we need more energy resources. So let's go with it.
It was both. So it was starting a business, the people wanted to make money in the rural area. And that's what I did. But at the same time, it was a something which was supported by the politics and would not have been possible without the political support. Also, already in the 1960s, it was going ahead of the US politics. So the first big contract was signed in early 1970, before the contracts of the Eastern politics was signed. But it was also seen as something which will bridge crisis, to the many talks between the political leaders in East and West, which say that even in conflicts, we've got this bridge over the Iron Curtain, which will last and that's one quote, which will last for 70 years and actually says, these up to 50 5050 years, it was the Brezhnev said, and exactly those 50 years over now.
So just so you know, because I was just finishing an article the past few weeks, I took took your writing with Brezhnev putting that 50 years, and I stuck it in my article, of course, I cited to so so no problem. But it's amazing how he said for the next 30 to 50 and 50 years, right? And 50 years, right on the mark, basically, the bridge, the bridge stops. And so I don't maybe want to bring us to, but but let's let's go with modern day, just a minute, though, is what is the symbolism then even from the historical perspective about the role of gas, Easton was about the stopping of gas flows between between Germany and Russia,
of course, that this is the bridge, which was tear down. And it was surprising. It's actually it's, it's not surprising if we see it from the Ukrainian perspective, because from early on, even in 1973, when the whole thing was starting, the Ukraine had to suffer because the Soviet Union was not able to deliver so much gas and and so they stopped or reduced resources for the Ukraine, to deliver to the west. And we all know those famous examples in 2006, eight, when when the gas delivery to the Ukraine was stopped to put pressure on the regime. And so in this perspective, this is not surprising. But from the western perspective, it's quite unusual, because as I said, the Soviet Union and later on Russia, were quite reliable. Which one could not expect, because there has been so many tensions and crisis just like to remember in 79, when the Soviet Union was invading Afghanistan, and a new Cold War, as it was called, came up the big sanctions of the United States. Also concerning Poland after December 81, when the martial law was coming up, and the sanctions were coming up of the United States, one could think, why didn't they use oil as a weapon in this new cold war, but they didn't. So in some way, this the Soviet Union did not use this kind of energy weapon so far, but no, they do.
And I'm really glad you brought the Ukrainian perspective. And maybe we could even bring up this eastern European or ComiCon perspective, the satellites of the Soviet former Soviet Union. And from their perspective, if I can ask you this, how do they perceive reliance on Soviet gas and Soviet oil from their perspective, like Ukrainians because, for example, their needs were not necessarily met, but rather maybe the gas was diverted to meet the demands in the West.
In general, the ComiCon states is the state in the socialist East they profited, of course funds, rather cheap energy from the Soviet Union. And they still profited after the oil crisis in 73, when many developing countries of the South has got real problems, and we have to keep those in mind. So not so West was hit by the oil crisis in 73 and 79. Peace states in Africa who just tried to build up industry, they were the real victims of the increasing crisis because they were not able to pay energy anymore. And the debt crisis in many parts of the world, and especially the poor countries, what's coming up then. So let's get back to the socialist yeast. After 73, the prices were rising a little bit in the socialist countries, but not that much. So they profited, because they got the five year planning and the prices were going up a bit later. But after 79, when the prices were getting up, once again, and the Soviet Union decided to sell more gas, and especially gas or oil, but gas to the West. This led to shortages in the oil delivery and gas delivery in socialist countries. And this was a real problem, because now they realize that they are depending on the Soviet Union on the power and the energies power of the Soviet Union. And they had to look for alternatives. And it's quite striking that some countries who had their own energy like Poland was cold, could stay a bit more independent, which has consequences, all the independent movements and so on. Also, Romania was a country with some kind of energy resources. But other countries like East Germany really got into problems, because they were, they had petroleum and chemical industries selling the cheap oil transformed to petrol to the west. And this business was, in some way breaking down. And so the industry and the GRS suffered. And what they had to do was to get back to brown coal. And actually a brown coal was something which they had not in mind to produce that much in the future. But now in the 1980s, they had and this had big consequences to also for the environment. And also for the whole atmosphere that was coming. There was a kind of environmental movement that was criticism about the brown coal, and countries like Poland countries like the GE or had huge steps to do to this specific constellation in the 1980s. And if I made last point, yes, please Oh, is because in the mid 1980s, the oil prices are going down again, the West is really happy. And this is really important for the whole economy, let's think of politicians like him would call the Christian Democrat on record setter, the conservative in Britain. That's why they succeeded in the late 1980s. Because we were so lucky that the oil prices were going down, inflation was going down. And so they were could win elections and so on, ya know, and author Ron rain, so they're on the right side. But in the socialist countries, the prices were not going down as quickly as in the West, which was market driven surprises change quite quickly, but they have the prices of the planned economy. And so they say, had to pay higher prices for longer time. So things even got worse due to the
some of the assumptions around the collapse of the Soviet Union, or, yeah, actually, a lot of money was going into the energy sector to try to modernize it. But but the I don't say they but let's just say they they say that one of the reasons for the collapse of the Soviet Union was that because economically it was just going down, it couldn't compete with the West anymore. And from an American perspective, they would say, because it was military spending, but but maybe energy, the price of energy actually underlies some of this economic problem in the Soviet Union rather than in the West.
Yes. So if we discuss a reason why the Soviet Union failed, energy is a key to this. So the the big energy deal, it's they in some way helped to survive in the early 80s. And they maybe were responsible that the Soviet Union had a few years more. But on the other way around since 18, five, the crisis increased and the Soviet Union also and other socialist states due to any depression, and that's why I would argue that energy has to be part of all kinds of historical writing. Usually, it's just a brief footnote. If you look on typical stories of the history of Europe, you will find energy question considering the oil crisis in 73, but better yet But if we discuss the downfall and the decline of the Soviet Union and the socialist east, I think energy plays a much more crucial role,
because they are the Soviet Union. And then the East was built with these energy relations,
actually, of course, and they will lying on the prices of the world market. And that's the interesting thing, because usually we think about Cold War, which was divided, which has an Iron Curtain curtain. But the oil crisis is one of the most important examples for bad what we call nowadays, globalization. So there was this globalization, which was going across East and West, breaching Eastern West, leading into trouble between the West between the East and across the Iron Curtain. So the global realization is like, it's like, like, going around everywhere and changing the system of the Cold War.
And from the 1970s. I mean, at the beginning, you you say how and why it's so important to look at the 1970s from a historical point of view, but this was really the beginning and the start of this interdependencies glow global interdit regional, we could say maybe European and European interdependencies and then growing to be globally introduced dependencies in the field of oil and then gas.
Yes. So this on the factual level, there's a new kind of interdependency, a new kind of cooperation, traders increasing and so on. But it's not the only factual thing. So there's this perception coming up that states are interdependent. And the word interdependency is a new buzzword of the 1970s. It's perception, like globalization in the 1990s. It's a new word, which is coming up, and it's changing the political action. So these are not neutral words. But when you use this word interdependency, it leads to new kinds of political meetings like the g7, which is coming up in the 1970s. Politicians like Harold Schmitt, the Chancellor of Germany, doing world politics, always flying around the world, meeting everybody and regularity and trying to get into contact with everybody to organize those crisis, world crisis, world economy crisis are now seen everyone indeed. So there are things like the revolution in Iran, which has huge consequences for all states in the world. Because there is for a brief time, the oil delivery of a big oil seller Iran, which is falling out, and once again, prices are going up. And this makes the whole relationship. So concerning with Germany, Libya, Gaddafi, Libya, of a terrorist supporting dictator, becomes the biggest oil supplier in 1980. And it remains an important oil supply in the 1980s, although the United States are putting sanctions and even bombing Libya in 86, and a few years later, once again, so the relationship are hugely influenced by these oil supplies.
To follow up, we talked about interdependencies. One area I want to go back to before we finish is the Comic Con countries. And maybe you could give some context about the importance of this economic relationship between the countries, why it came about, and the perceived benefits of cooperating this economic area?
Yes. So the common come countries were organized in an exchange system. So it was planned, what kind of country was doing what, what is getting something from another country. And so there was a very big interdependency within the ComiCon countries to take example of computer building. So one country was responsible for the software, then another one for the hardware, and the other one was building printer. And so there was this kind of fixed network. And if something was not working, there was a problem. And that's the problem with the energy supply that we have got some states with a big, huge petroleum industry, like NC gr in a small town called tweed, which is directly at the Polish border, where the pipeline is coming up, and they need the direct oil from the friendship pipeline as cold from the Soviet Union, and this is not working then anymore. It's not only a problem within the Eastern countries, it's also a problem within the western countries of May at this point. Because the EU is the United States. They put a lot of times pressure on West German and T because they say Germany, West Germany is becoming too dependent on The Soviet oil and they don't want on Russian oil. They started wanting them in 69, when the first pipes were built in Germany saying, Oh, we've got only 20%. So it's not a problem. And guess what's not so important these days. So it was not really a problem. Once again, after the Soviet invasion in Afghanistan, the biggest gas deal so far three times bigger than before, was done by the West Germany drums in the early 1980s, in a time when Ronald Reagan was driving sanctions against the Soviet Union on wheat and so on. And and but the Germans decided, now, we can do it. And it's just 1/3 of our gas supply. And once again, the United States really warning No, you can't you shouldn't do it, we will deliver you new American power plants, and we will deliver you gas and whatever. But with Germany became much more self confident, more independent from the West, and did not follow the warning. And so we have got a conflict within the West, too, which sounds quite familiar nowadays, when once again, the United States had been mourning the Western government that you are too dependent on oil from the gas from the east.
Maybe now the government realizes this too. So Right. And my one last question, because often I speak to people involved in policymaking or people involved in business. But you as a historian having the Cisco historical perspective, what is the role of history in the history of say, energy to understand and inform current policymaking? Okay, there's a couple of questions there.
It's always a big question whether History is repeating, can we learn from seeing something from history or not, and so on. So I would say, in general, history is not repeating, but we can learn from history. And it's not the same way things are happening. But we can get warnings from history. And I think the warnings are quite clear in this case, because there have been these problems concerning energy delivery for Eastern countries also for the Ukraine much more before there had been many warnings in history, as mentioned before, but politic politicians were not reacting on on this. And so we can see what had happened, how decisions were made, despite of these warnings. And this might be something which is interesting for politics nowadays. But also dealing with oil crisis is interesting. So and that's what, what I also wrote many articles and newspapers often said in interviews that, what can we learn nowadays, on the whale people dealt with the energy prices in 73, of course, things were different. But now we have got similar measures, like cooling down the temperature, right now in our room at something like 19 degrees, it's quite cold in public buildings, like and universities, and are saving energy in the Christmas time. It's particularly what we are doing now. So not that many lights and so on. This is quite symbolic, but it brings people back in mind. And that's something what the energy crisis in the 1970 did, that we learned something about energy, that that energy is not just there, that it's complicated to bring energy from one point to another, that it's a highly political thing. And that's a new thing about energy in the 1970s. To that energy was seen as something which is political. And and here we are, once again, in our times.
Yeah, excellent, excellent. Okay. Thank you very much, Frank for the time. Thank you. Thank you. Thank you for joining us. For this episode, we produce the my energy 2050 podcast to learn about cutting edge research, and the people building our clean energy system. If you enjoyed this episode, or any episode, please share it. The more we spread our message of the ease of an energy transition, the faster we can make it. You can follow us on LinkedIn where we are the most active on the My energy 2050 web page, or on Twitter and Facebook. I'm your host, Michael LaBelle. Thank you for listening to this week's episode.