Berlin: In a game of one-upmanship about gas supply, or its curtailment, with Russia, Germany appears to be heading to a crisis. With supplies cut in phases, Russia has reduced gas deliveries to strangulate the European countries which opposed the Russian invasion of Ukraine and even went for sanctions.
Thus Russia, the world's second largest natural gas producer after the US, has now forced Germany and other EU countries to press its alarm buttons.
As per an AP report, Germany on Thursday activated the second phase of its three-stage emergency plan for natural gas supplies, saying the country faces a 'crisis' and warning that storage targets for the winter are at risk due to dwindling imports from Russia.
The government said the decision to raise the level to 'alarm' follows the cuts to Russian deliveries made since June 14 and the continued high market price for gas. The third and highest stage is the 'emergency' level.
It said that while gas storage facilities are currently filled to 58% capacity, higher than at this time last year, the goal of reaching 90% by December won't be achievable without further measures.
Russian state-owned energy giant Gazprom has cut supplies through the Nord Stream 1 pipeline running under the Baltic Sea from Russia to Germany — Europe's major natural gas pipeline — by 60%. Although other countries like Italy (cut by 50%), Austria, Czeck Republic and Slovakia are set to suffer cuts, Germany will bear the brunt of the suffering.
The cutbacks will hit the major economies most with their power generation and heating use being heavily dependent on gas, which is mostly supplied by Russia. Germany depends on Russian gas for 35% of its gas imports and Italy for 40%.
Although current levels are enough for immediate consumption, the situation will soon change with winter requirement for heating set to shoot up. The annual cycle of storing gas in summer available at cheaper rates and using it in winter, will go haywire with sinking supplies, which some fear may worsen to a total Russian cut off of its gas supplies.
In addition to basic energy needs, natural gas is used by several energy-intensive industries, such as glass-makers and steel manufacturers, and they are already facing higher costs and dialing back use, thus the crisis turning a blow to the very economy of Europe.
As for power generation, gas is the core energy source especially when renewables like wind and sun generate less power due to unpredictable weather, and when electricity use spikes during cold or hot weather, like the heat wave last weekend that spurred a sudden rise in Europe.
Economy Minister Robert Habeck said in a statement that the situation is serious and winter will come. The reduction in gas supplies is an economic attack on us by (Russian President Vladimir) Putin, he said. "We will defend ourselves against this. But our country is going to have to go down a stony path now. Even if we can't feel it yet: we are in a gas crisis," Habeck added.
The government said it had informed European partners of the move in advance.