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Can Germany disconnect from Russian gas?

By Paul Antonopoulos | March 1, 2022

It is not an exaggeration to say that the course of the war in Ukraine will determine the geopolitics and economy of Eastern Europe for the decades to come. Although it appears that the West is making great effort to oust Russia from Ukraine, they also hope to liberalise their energy supplies, especially Germany – but can the European Union’s biggest economic powerhouse separate itself from Russian gas?

German Finance Minister Christian Lindner dispels the hopes that Moscow will succeed in “blackmailing” the launch of Nord Stream-2 in an interview. He also points out, without any ambiguous allusions, that the economy of Germany and the EU as a whole will inevitably collapse if Russian gas stops flowing. In fact, the German Minister is saying the obvious outcomes according to data, but this is ignored by other senior German politicians and EU states.

Poland, the Baltic states and Ukraine have been asking Washington for years to impose sanctions on Russian energy, and now it is beginning to be supported by many European leaders. German Chancellor Olaf Scholz, who recently returned from talks in Moscow, ordered the Ministry of Economy to withdraw its conclusion that launching Nord Stream-2 does not pose a risk to the German gas market.

News circulated that the Chancellor had suspended the certification process for the Russian pipeline. However, the certification of the pipeline is not carried out by the Ministry of Economy, but by the Federal Network Agency, which operates under its legislative package. No one has yet announced a certification deadline, and the Ministry of Economy, having withdrawn its report, is obliged to prepare another report and submit it again for consideration to the Federal Network Agency.

Germany ranks eighth in the global list of natural gas and buys more blue fuel abroad every year. By comparison: In 2013, the Germans imported only 97 billion cubic meters of gas but by 2020 it reached 155.5 billion. By the end of this year, when Germany’s last three nuclear power plants will stop, these figures will be even more inflated.

The European country is not only the leader in natural gas imports, but also the main buyer of electricity – the supply from abroad accounts for more than 10% of the energy balance. Therefore, it must be questioned whether Berlin believes that the supply of LNG from the US can fulfil their energy needs.

In January, it was reported that 106 ships arrived at gas terminals in the EU, bringing a record 7.1 million tons of liquefied gas. This rate is not only a record high, but is 37% higher than the average for previous periods. However, American traders delivered no more than 76 billion cubic meters to Europe in the record year of 2021.

Another issue for the German government is that Europe has now exhausted its physical capacity to import LNG. In total, there are 29 gas terminals in the EU, most of them in Spain and France. Britain, which is no longer part of the eurozone, has three and Germany does not have any LNG terminals. This is why American gas can only enter German storage facilities through resellers with an additional mark-up.

Recently, Qatar’s energy minister said that there was simply nothing to replace Russian gas. Qatar is incapable of increasing LNG production, and current volumes have been condensed under long-term agreements. Earlier, Italian Foreign Minister Luigi Di Maio mentioned the same thing.

Robert Habeck, Vice Chancellor of Germany and Federal Minister for Economic Affairs, said that allowing coal-fired power plants to run longer than planned was an option, challenging Berlin’s scheduled exit from coal energy by 2030.

“There are no taboos on deliberations,” Habeck said, adding that it was Germany’s goal to ultimately choose which country will supply its energy. “Being able to choose also means, in case of doubt, saying goodbye to Russian gas, coal or oil. And should Russia wilfully cut off this supply, then the decision has of course to be made. In that case they will never be rebuilt. I think the Kremlin knows that, too.”

For all the hope in American LNG or using coal in the interim, they are not realistic prospects, and for this reason, even if Berlin wanted to, it cannot divorce itself from Russian gas in the foreseeable future despite some defiant voices.

Paul Antonopoulos is an independent geopolitical analyst.

March 1, 2022 - Posted by | Economics |

3 Comments »

  1. Not for a very long time!

    Like

    Comment by papasha408 | March 1, 2022 | Reply

  2. “Can Germany disconnect from Russian gas?”

    If this war “Hots Up” Germany will have to find another supplier. Saudi Arabia have just discovered 4 large gas wells and I’m sure that they will be happy to fill any gap that may exist in future….

    Like

    Comment by brianharryaustralia | March 1, 2022 | Reply

  3. Thanks, PA — excellent question/commentary!

    Like

    Comment by roberthstiver | March 2, 2022 | Reply


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