It was already decided at the beginning of December that NATO would not comply with a request from Ukraine for military assistance in the event of a Russian invasion. Instead, salvos from another type of weapon were promised. There were to be massive economic sanctions, with the caliber precisely preselected. The West wanted to resort to far-reaching restrictions on the financial market and against designated individuals – and has now done so.
The energy and raw materials sector, on the other hand, is left out; one would like to continue to purchase coal, oil and natural gas, plus nickel and aluminum from Russia and, above all, be able to pay for them. The financial market sanctions are therefore designed in such a way that invoices for imports from Russia will also have to be paid in the future. One does not want to prematurely cut oneself off from imports of raw materials and semi-finished products.
Of course, the EU dares to do more – and does so on its own. It has included the “Energy Factor” in its arsenal, which means that equipment is no longer allowed to be supplied to refineries in Russia. Affected are systems whose technology comes almost exclusively from Europe, for which it should be impossible to repair and modernize units. As a result, there is concern that Russia will accept the fight in this branch of arms and sanction it back. It would be obvious and correspond to the rationality of any struggle. It is more likely, however, that the reaction will not be full force. And if so, Russia could make an impact with its reply, but not count on a resounding success.
Also in demand as a transit country
German concerns are focused on natural gas, which is not least due to the media dominance of the Loch Ness topic “Nord Stream 2”. However, a particularly strong vulnerability from a supply failure of Russian natural gas would hardly be expected. There is enough storage capacity in Germany, and the winter peak demand is almost over. In any case, only a third of the EU’s gas requirements come from Russian sources. With liquefied natural gas (LNG) there would be a medium-term substitute that could be activated. The drawback is that short-term contracted LNG is much more expensive than long-term contracted pipeline gas from Russia. In addition, there are currently only 29 LNG terminals within the EU, with which the liquefied gas transported in tankers is restored to a state in which it can be used. Germany itself lacks converters of this type, the construction of a first one in Stade (Lower Saxony) was repeatedly postponed with reference to environmental protection and in anticipation of the pipeline gas of the “Nord Stream 2” brand, which was announced for the first time in 2022. Olaf Scholz has now announced the rapid construction of two LNG terminals in Wilhelmshaven and Brunsbüttel.
In quantitative terms, natural gas is not an energy source per se for Germany, but also an important production factor – with two special features. First of all, on the demand side, gas is used as a raw material in petrochemistry, i.e. non-energetically, primarily for the production of ammonia. This can be balanced with the likewise small amount of domestically produced natural gas (5.2 percent of the total requirement). This means that the imported quantity, introduced from different points of the compass, is available solely for energetic purposes. The net import to cover the energy requirement is 2,800 petajoules or 778 terawatt hours per year. However, Germany is not only in business as an end consumer, but also as a transit country in order to forward natural gas from Russia to France and the Netherlands, as well as flows that land north to the Czech Republic, and finally the transit via the Trans-Europa-Naturgas-Pipeline (TENP) to be processed in Switzerland. The approximate volume of this gas transfer is 1,100 petajoules or 306 terawatt hours per year. Accordingly, every conceivable restriction on gas imports from Russia would be a challenge for the transit country Germany. One would have to resist the temptation to take what was delivered and only pass on what is left. In this case, a fiduciary role would have to be fulfilled and distributed fairly. After all, there are always contracts and clearly defined customers behind the delivered batches.
A good 30 percent of the gas consumed in Germany itself is used to generate electricity in large power plants and for district heating. One third of the other 70 percent goes to more energy-intensive industrial companies and two thirds to heat supply for households and small businesses. This leads to a “hump” in demand in winter and a greater vulnerability in supply at this time of year, which does not appear to be threatened at the moment. Russia sends its gas directly to German customers through the “Nord Stream 1” pipeline, as well as over the traditional land routes via Poland and the Ukrainian system (UGTS). According to estimates, about 50 percent of net imports to Germany come from Russia. With regard to the storage facilities that Russian companies such as Gazprom maintain themselves, it should be noted that the naturally significant storage facilities in the Ukraine originally played a major role in the concept of Russian natural gas supply for a long time. It was thus possible to compensate for the summer-winter fluctuation in demand. With the currently severely disrupted relationship between the two states, the future will probably only be about storage beyond this Russian-Ukrainian system.
Alternatives coal and nuclear
In the EU states themselves, the storage capacity is around 4,000 petajoules and thus almost a quarter of the annual requirement in EU Europe. At present, an average filling level of almost 30 percent is measured. It totals around 1,200 petajoules of gas, while the average European monthly consumption is currently 1,400 petajoules.
In the extreme case of a blockade of all gas deliveries from Russia, a good 30 percent less gas would be available per month, which would have to be compensated for over several months, favored by the upcoming summer season. At the same time, the time would have to be used for longer-term clarification and precautionary measures. Alternatively, electricity and heat generation from coal-fired power plants could be used to compensate. A contribution from the petrochemical industry, where storable products are manufactured and where there is limited substitution potential, would also be conceivable. Meanwhile, CDU leader Friedrich Merz dreams of being able to put an end to the nuclear phase-out.
In summary, this means that Germany is currently not really physically vulnerable in terms of gas supply towards the end of the cold season. Consequently, it is not to be expected that the Russian side will make an attempt in this direction, since alternative customers such as China are on the horizon, but there are no routes to serve them properly.