Germany’s neighbors fear gas supply disruptions

Germany’s neighbors fear gas supply disruptions

Europe is preparing for a difficult winter during which solidarity between countries will once again be put to the test. Is Germany in a position to assume its intra-European exports?

Germany, the biggest consumer of Russian gas, is also one of the biggest re-exporters of Russian fossil fuel. Last May, Berlin exported 6 billion cubic meters (bcm) of gas to its neighbors who depend on these exports. What about this winter?

“The situation on the gas market is tense and unfortunately we cannot exclude a deterioration of the situation. We have to be prepared for things to come to a head”German Economy and Climate Action Minister Robert Habeck said on Tuesday (July 5).

“It’s about doing everything possible to maintain basic supplies through the coming winter and to keep energy markets functioning for as long as possible, despite high prices and growing risks” that entails, he added.

Shortage of gas if the rate of export is maintained

Some of Germany’s neighbors are watching developments closely. Landlocked countries like Switzerland, Austria and the Czech Republic depend on Berlin for much of their gas supplies.

The German government has been clear on the matter: if German gas exports follow the same pace as in previous years, the country will experience a gas shortage.

“The decisive factor is the reduction of domestic consumption in order to guarantee the security of supply of the country and the necessary supply of neighboring countries”reads a document from the German Federal Network Agency.

Neighboring countries received around 0.2 billion m3 of gas from Russia and transiting through Germany under contracts concluded with Gazprom Germania. Today, exports account for around 60% of this figure, or 0.12 billion m3 per day.

60 to 80% drop in exports to the Czech Republic

Data from the European Network of Transmission System Operators for Gas (ENTSO for Gas) shows that the volume of gas transported from Germany to the Czech Republic by Gascade, a subsidiary of Gazprom, has fallen by 60-80% since June 16, when flows in the Baltic Gas Pipeline decreased.

As gas flows passing through Nord Stream 1 could stop entirely, Prague is becoming increasingly worried. Czech Deputy Prime Minister Marian Jurečka, who is currently negotiating gas import deals with other countries, said he was not “not optimistic“.

Similar fears are expressed in Switzerland. Around 75% of Swiss gas passes through Germany, and the country has no gas reserves. In May, the government asked the gas industry to build up additional gas reserves in neighboring countries and to secure additional purchase options on gas other than that coming from Russia.

“For now, the gas supply is assured. However, the situation is tense and has worsened in recent weeks.”Swiss Energy Minister Simonetta Sommaruga said in June.

“That’s why no one can guarantee that there will always be enough gas for everyone” she told the SonntagsZeitungsunday.

Austria plans to turn to alternative solutions

Austria, equally concerned, on Tuesday ordered large gas consumers to turn to alternative solutions, mainly oil.

“We are facing an uncertain situation at the moment. I cannot assure you that storage will continue at this level, nor predict how Vladimir Putin will behave”said Austrian Energy Minister Leonore Gewessler.

She asked Austrian citizens to prepare “from now on for the heating season”.

Solidarity

For Germany’s neighbours, solidarity is essential. In the event of a gas shortage, EU rules and solidarity treaties could be the only way for its neighbors to have a peaceful winter.

Mr Jurečka repeatedly stressed that European solidarity should prevail in the event of a sudden cut in Russian gas supplies.

“At European level, it is important to restore the principle of solidarity so that, when such a situation arises, Member States must share the gas in order to reserve it for households and critical infrastructure”did he declare.

Austria has taken a similar approach. Ms Gewessler called for EU-wide coordination of national contingency plans and solutions “solidarity”.

Difficult situation for non-EU Switzerland?

The situation could be more delicate for Switzerland, which is not an EU member state. Switzerland and Germany are currently negotiating a “solidarity treaty” to help each other in the event of an energy crisis, but there is no guarantee that this will succeed.

“Developments in Germany will have an immediate impact on our country. We do not have our own gas reserves; we are completely dependent on deliveries from other countries”said Swiss Economy Minister Guy Parmelin.

However, solidarity is a two-way street. Germany could for its part have to rely on its neighbour, Poland, which will soon receive more gas than it will be able to use immediately.

Polish Prime Minister Mateusz Morawiecki has already announced to the Czech Republic that his government will help it develop appropriate mechanisms to help it accomplish the difficult course of independence from Russian gas.

In October 2022, the long-awaited Baltic Pipe will enter service. In the future, Poland and Denmark could receive up to 10 billion m3 of gas per year via this pipe. These gas flows could also be of interest to the German government.

The emergency meeting of EU ministers on July 26 to prepare for winter will be decisive. Beware of Austria, which stores gas for many of its neighbors thanks to its relatively large storage capacity, since the latter apparently wants to keep this gas in case of emergency.

[Janos Allenbach-Amman, Aneta Zachova et Bartosz Sieniawski ont contribué à la rédaction de cet article.]

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