Danish Energy Sale to Goldman Sachs Meets Resistance

Danes are critical of the partial sale of their national energy company to an American investment bank.

Years of conservative rule ended in Denmark with the 2011 election of Social Democratic Party leader Helle Thorning-Schmidt, whose coalition also included the Social Liberal Party and Socialist People’s Party. Two years later, the Socialist People’s Party left the coalition over the decision to sell 18 percent of DONG Energy, the nation’s largest energy company, to investment bank Goldman Sachs.

Finance minister Bjarne Corydon backed the decision, arguing that the move makes green energy a financially sustainable option, while former Social Democrat premier Poul Nyrup Rasmussen opposed the sale, calling Goldman a “shady partner.”

Protesters threw the image of a vampire squid over the statue of a former king, a nod to Matt Taibbi’s remark in Rolling Stone magazine that Goldman was a “great vampire squid” feeding on cash instead of blood.

However, in the end the deal went through, with the Socialist People’s Party voting alongside the coalition before its withdrawal. The sale was approved in January of this year, granting DONG the necessary capital to pursue its goals.

What are those goals? The central goal of DONG has always been evident in its name, Danish Oil and Natural Gas, particularly oil and natural gas in the Danish North Sea.

But DONG is also an important player in the field of renewable energies, developing biofuel technologies (wood pellets to replace coal) and building some of the world’s largest wind farms. By 2050, the company hopes to cut carbon dioxide emissions to 15 percent of their 2006 levels while reducing the cost of energy to less than €100 per megawatt hour. Thus while DONG continues to secure oil and gas resources, it also aggressively pursues wind and biomass energy development.

Given DONG’s accomplishments, it is no wonder Goldman has decided to invest with them in wind technology. Critics of the sale could cite stories of Goldman’s shift from client-based care to profit-based predation, the revolving door its employees enjoy with the American government and investigations into whether the company unlawfully received bailout money during the 2008 financial crisis, not to mention allegations that it had profited from the crisis in the first place.

Fair reasons to question the nature of the sale, particularly since Goldman plans to handle its investment in DONG via subsidiaries in tax havens such as Luxembourg and the Cayman Islands. But more troubling than the reasons for the sale are the reasons for the opposition to it, reasons that are tied to culture and therefore raise more difficult questions than the financial motivations of a corporation.

Peter Kurrild-Klitgaard, a professor of political science at the University of Copenhagen, points out that for many Danes the problem is simply that Goldman isn’t Danish. This is not surprising coming from a nation that earlier this year gave the nationalist Danish People’s Party 26.6 percent support to represent it in the European Parliament. Moreover, says Kurrild-Klitgaard, “many think Denmark is selling all of DONG and not just 18 percent.”

If indeed much of the protest can be traced to this, then — while reasons to protest exist — it shows a prejudice or worse. The widespread depiction of this scandal as another episode of the people versus big business is a mischaracterization that ultimately only harms the people.