It is difficult for Germany to cut off Russian energy

Last year, Russia supplied more than half of the natural gas and about a third of the oil Germany uses. Nearly 50% of Germany’s coal imports, essential to the country’s steelmaking industry, also come from Russia.

The first natural gas pipeline linking West Germany to Siberia was completed in the early 1980s. This Cold War legacy is still present in the energy infrastructures of eastern Germany and is directly connected to Russia, making it more difficult to bring energy from other suppliers into the region.

Today, that link is even greater, as European leaders debate whether to impose more sanctions on Russia’s energy sector in order to pressure Moscow to abandon its military campaign in Russia. Ukraine or not.

Germany, Europe’s largest economy, is facing a difficult decision in the face of calls from its allies to take a tougher stance against Russia.

Speaking at a press conference in Warsaw on April 4, Polish Prime Minister Mateusz Morawiecki criticized Germany for its trade with Russia and accused Berlin of obstructing sanctions against Moscow.

“It is a mistake for Germany to become so dependent on energy imports from Russia,” German Finance Minister Christian Lindner said yesterday before attending the European Union (EU) meeting in Luxembourg.

He implied that Germany would support a fifth package of sanctions against Russia, including a proposed ban on Russian coal imports, announced the same day by European Union President Ursula von der Leyen. This is a notable shift, as Berlin had previously insisted that sanctions targeting the energy sector would hurt Germany more than Russia.

But Germany understands very well that if it immediately abandons Russian gas, oil or coal, the consequences it will suffer will be huge, observers estimate.

Gas

Economists at the Leopoldina National Academy of Sciences said in a report last month that Germany could stop importing Russian gas in the short term if it turned to other energy sources.

German Energy Minister Robert Habeck was trying to do just this when he visited Qatar and the United States recently, to strengthen energy partnerships with these countries. Germany’s energy ministry says Germany has reduced its dependence on Russian gas by 15% to 40% in the first three months of this year.

However, industry leaders strongly oppose sanctions on Russian natural gas, warning that without a steady supply of gas, oil and coal, their production will be affected. stalled.

Almost half of all households in Germany are heated by natural gas. This gas is also used to generate electricity in heavy industry. Powerful German labor unions in the chemical, mining and pharmaceutical sectors note that a sharp and sudden drop in gas imports could lead to mass unemployment.

Martin Brudermuller, chief executive officer of chemicals maker BASF in southwestern Germany, said blocking the gas pipeline with Russia would cause “irreversible damage”.

“The transition from Russian natural gas to other suppliers or to alternative energy sources will take 4-5 years, not weeks,” he added.

“Do we want to blindly destroy the entire economy of the country? Destroy what we have built over the decades?”, Brudermuller said in an interview with the newspaper. Frankfurter Allgemeine Zeitung last week. “I think it’s irresponsible to take such an experimental step.”

Confectionery manufacturers and German sweets also warned that gas shortages would severely affect their operations.

“Gas is the most important source of energy for most German confectionery companies,” the German Confectionery Industry Association (BDSI) said in a statement. “Companies in the confectionery industry produce food and are therefore of particular importance to the German people, especially in times of food shortages or other emergencies.”

Lithuania last weekend announced it would stop importing gas from Russia starting in April. But gas only accounts for 11% of the energy consumed in this Baltic country, while Germany uses 27% of gas for its needs. his energy.

In addition to providing a large amount of gas, Russia also owns and operates thousands of kilometers of pipelines and a number of important storage tanks in Germany through subsidiaries of the state energy group Gazprom, including Astora, The company owns the largest underground natural gas storage tank in Western Europe.

German Energy Minister Habeck announced on April 4 that the country will control Gazprom Germania, the parent company of Astora, at least until September. The move is seen as an important step in Germany’s efforts to win right to supply gas from Russia.

Crude oil

Not only dependent on gas, Germany also imports more than a third of its oil from Russia, much of which flows directly to refineries in the eastern states through a pipeline system dating back to the Cold War. .

Therefore, if it wants to ban Russian oil, Germany will have to find an alternative supply, especially since it has imported 27 billion tons of Russian oil in 2021. In addition, it must also find a way to transport this imported oil to refineries, because the entire German oil pipeline system is located in the east.

Germany has begun to diversify its oil supply, bringing the share of Russian oil from 35% to 25% in the first three months of this year.

From mid-April, the Leuna refinery in the east of the country will process only half as much Russian crude as in previous years. Crude oil imported from other countries will be transported from ports in the west to the plant by trucks and trains, the German Economy Ministry said.

However, the PCK refinery in the eastern German town of Schwedt is controlled by Russian energy company Rosneft. This company is said to be not willing to accept to cut oil import contracts from Russia in the future.

German media reported that the Energy Ministry is considering whether the government should control the plant in the name of ensuring energy security.

Coal

Coal is the easiest to replace of the three German energy sources imported from Russia. However, Germany still imports half of its anthracite coal from Russia, after closing its last coal mine in 2018.

In the past six weeks, Germany has been able to transform its supply chain and conclude new coal contracts, aiming to cut its dependence on Russia by half, the German Economy Ministry said. Currently, Russia meets 25% of Germany’s coal needs. Berlin is planning to stop importing coal from Russia altogether this summer.

However, until then, Economy Minister Habeck insists Germany still needs a stable energy supply to maintain its role as Europe’s economic locomotive.

This is especially urgent in the current context, when Europe is being called on to provide energy and other sources of support to Ukraine, which last month connected to the European grid to ensure grid maintenance. stable power in the midst of conflict with Russia.

Germany, after initial reluctance, also supplied arms to Ukraine. But Minister Habeck pointed out that these weapons are made from steel at German factories using coal imported mostly from Russia. It is not clear how Germany will replace this source, in case Proposal to ban the import of Russian coal of the EU is adopted.

“We are being asked to supply raw materials to Ukraine,” Habeck told the TV channel ZDF last week. “But to do that, we need a stable production infrastructure.”

Vu Hoang (According to NY Times, Economist)