Drastic Energy Rationing Being Prepared for Germany
Radical geopolitics has put Germany into a precarious situation in terms of energy supplies. Replacing the gas flows from Russia by alternatives is turning out to be extremely difficult in the medium term, and impossible in the near future. All the “alternatives” touted by the German government in its hectic push for diversification of sources, will first of all not meet German needs before the year 2026, and even then, only provide a fraction of what Russia had delivered before the EU-German embargo.
For instance, the German-Qatar agreement, published on Nov. 29, involves delivery of 2 billion cubic meters of LNG annually over a period of 15 years, starting in 2026. National consumption of gas was 90 billion cubic meters in 2021. And given the relaunching of the campaign against Qatar on human rights issues the minute the World Cup ended, even that bilateral agreement may be jeopardized.
Thus, the year 2023 opens with great uncertainty as to the stability of gas supplies, both for private households with gas-heating (about half of the total), and for the industry. The gas reserves which Germany was able to build up over the summer and autumn months seem impressive, as presented by government propaganda, but are due to a substantial degree to the reduction of industrial consumption through the reduction of production. And that has a negative impact on the output of major industries, such as the automobile sector, which rely on crucial components provided by many of the medium sized and smaller companies that have cut production. This trend is slated to intensify in 2023, as the overall availability of gas will not improve significantly next year.
Meanwhile, the Federal Network Agency is calling on Germans to save more gas. “Currently, overall savings are only 13%”, the agency’s president, Klaus Mueller, told Tagesspiegel, adding that in their estimation, savings of 20% or more are necessary. And even then, the risks are high in the event of a prolonged period of drastic cold, say at temperatures of minus ten degrees. Since reserves will cover no more than 3-4 weeks of extreme cold, voluntary cuts in consumption will quickly reach their limits, and then rationing by decree will have to kick in.
According to the Agency’s plans (not made public), should a shortage actually occur, the government would declare a national emergency, and the gas purchases of around 40,000 medium-sized and smaller companies would first be cut using the lawnmower method. Individual rationing would be applied to the 2,500 largest gas consumers in energy-intensive sectors such as chemicals, metal processing, steel, glass, ceramics, paper and the food industry, which account for almost two-thirds of industrial gas consumption. The only way out in the short term would be to resume gas imports from Russia. But a precondition for that would be an initiative from the German government for a peace agreement in Ukraine, which is not on Berlin’s agenda.