sanctions against Russia
National gas reserve planned – worries about dependency
The natural gas storage facility (Astora GmbH) in Rehden, the largest storage facility in Western Europe. Astora GmbH is a subsidiary of the Russian energy group Gazprom. Photo: Mohssen Assanimoghaddam/dpa
© dpa-infocom GmbH
The federal government wants to reduce dependence on Russian energy imports. The war could put a strain on the German economy, and consumers could face rising prices.
In response to problems in the winter and the Ukraine war, Economics Minister Robert Habeck is planning to set up a national gas reserve – and wants to fight rising energy prices.
Concerns are growing in the German economy because of the dependence on Russian raw material imports. The Ukraine war could delay the economic catching-up process after slumps in the corona pandemic. Rising prices for commodities such as oil could further fuel inflation and also weigh on companies.
Before leaving for the United States, Habeck said on Monday evening in Berlin after consultations with the EU energy ministers: “We are considering using the national oil reserves in a concerted action together with the Americans in such a way that prices are dampened if they continue to rise.” The International Energy Agency meets on Tuesday, where negotiations will continue.
Oil prices have risen as a result of the Ukraine war. Fuel prices in Germany are at record highs. The national oil reserve ensures independence from imports for 90 days.
Already noticeable effects
Germany is also dependent on Russian imports for gas and coal. According to a paper published on Monday by the Federal Association of Energy and Water Industries (BDEW), the Russian attack is already having an impact on Germany’s energy supply, which could increase further. The energy industry is assuming that it will be able to meet its gas supply obligations this winter regardless of supplies from Russia. The coal-fired power plants produced as planned and according to demand. There are currently no bottlenecks in German power generation.
Industry President Siegfried Russwurm said to the “Handelsblatt” when asked whether he expected Russian President Vladimir Putin to impose a delivery embargo: “I’m not ruling anything out.”
In contrast to a national oil reserve, there is currently no gas and coal reserve in Germany. That should change now, as Habeck (Greens) had already announced. The Ministry of Economics presented concrete plans for the construction of a gas reserve. This is to ensure that the gas storage tanks are always sufficiently filled, as can be seen from the cornerstones of a law. It states that the gas storage facilities in Germany are essential for a supply of gas in the winter months. They could compensate for peaks in demand during cold periods and thus ensure a steady gas supply.
High storage volume
Germany has a storage volume of around 24 billion cubic meters. That corresponds to about half of the gas that can be transported from Russia to Germany through the Nord Stream 1 gas pipeline each year. This storage volume alone can supply Germany with gas for 2 to 3 winter months that are cold on average.
So far, however, there are no specifications for the filling levels of the storage tanks. This winter they were historically low. This applies in particular to the storage facilities of the Russian state-owned company Gazprom. This is one of the reasons why prices on short-term trading venues have risen sharply. When demand peaked, hardly any additional gas was offered from the storage facilities: “Such a situation in the storage facilities must not be repeated next winter.”
The German gas storage facilities should therefore be filled “regardless of the operator’s interests” at the beginning of winter. The gas should be available during cold periods or low gas imports. The operators should be obliged to ensure that the storage tanks are filled to 65 percent by August 1st, 80 percent by October 1st, 90 percent by December 1st and February 1st – i.e. at the end of winter and the heating period down – to 40 percent.
Level at almost 30 percent
According to the gas storage association INES, the current filling level of the gas storage facilities in Germany is almost 30 percent. The federal government had already reacted to the low levels in winter with measures. According to the paper, the planned law on the gas reserve should be passed by the Bundestag in April at the latest so that it can come into force on May 1st. This is necessary so that the entire summer half-year is available to fill the storage tanks.
The main aim of the measures is to prepare better for the coming winter. In the German economy, however, concerns about the economic consequences of the Ukraine war are currently growing with a view to the coming weeks and months. Even before the war, high energy and raw material prices and supply bottlenecks had slowed the economy’s catching-up process.
The President of the Association of German Chambers of Industry and Commerce, Peter Adrian, warned of delays in the delivery of cars. He told the Funke media group: “For palladium, Russia is No. 2 on the world market behind South Africa. If that can no longer be delivered from Russia, there is a risk of massive disruption in individual economic sectors. » Palladium is required in the automotive industry for the construction of catalytic converters.
With palladium, Russia has a world market share of 40 percent, said Prof. Hubertus Bardt from the Institute of German Economics in Cologne. “There is a risk of further disruptions to the supply chain for the automotive industry.” Gas, oil and coal accounted for three quarters of German imports from Russia. Another eighth are iron and steel, copper and copper products as well as precious metals.