Will we experience the gas catastrophe in winter? Politics and business outdo each other with horror scenarios should Russia no longer supply enough gas. But a look at the data paints a more optimistic picture. In fact, Germany is currently saving more gas than it appears.
What’s going on there? The Brandenburg Interior Minister Michael Stübgen (CDU) is worried about “blackouts” and a “significant threat to order”. The German Chamber of Industry and Commerce fears production stops and broken systems. Even Foreign Minister Annalena Baerbock (Greens) is tempted to warn of “popular uprisings”.
A few months before the start of winter, Germany’s political decision-makers are worried. Fear of running out of the gas we use to heat homes and keep industrial processes running. Is the Federal Republic heading for a catastrophe?
Now save articles for later in “Pocket”.
But a look at the data shows that the situation is serious – but it may be far better than we think. After all, gas consumption by private households and industry has already fallen noticeably. At the same time, the gas storage tanks are constantly being filled. In its daily updated management report on gas supply, the Federal Network Agency uses a graphic to show how much monthly consumption has already fallen at the beginning of the year.
According to an estimate by the Working Group on Energy Balances, gas consumption fell by 15 percent in the first half of this year. The association sees the reason for the savings on the one hand in the comparatively mild winter, but also assumes that price signals will take effect: people save on hot water and turned the heating down at the beginning of the year. Another factor: Renewable energies delivered more electricity than expected, especially in the first quarter, which meant that less gas had to be used to generate electricity.
But industry is making an even greater contribution. At the beginning of July, the Berlin Hertie School published a study according to which private households saved a total of six percent of their gas consumption in March and April 2022 – in industry it is even eleven percent. The authors of the study eliminated external effects such as the weather or the general economic situation as far as possible. As early as last summer – when gas prices slowly began to climb due to the economic recovery – the industry took the first cost-saving measures.
The chemical group BASF, the largest industrial gas consumer in the country, shows how it can be done. “There is no plan B,” said CEO Martin Brudermüller in a FOCUS interview at the beginning of April. In practice, however, the group has long since started with a “Plan B”: At the main plant in Ludwigshafen, heating oil has replaced around 15 percent of the gas used to produce electricity and steam. BASF has drastically reduced the gas-intensive production of the important raw material ammonia; instead, the group buys the ammonia from the USA.
The company is also involved in the construction of huge wind farms in the North Sea in order to switch from fossil fuels to green electricity and hydrogen. At the end of July, when the balance sheet figures for the first half of the year were presented, Brudermüller sounded more optimistic. Even if the Federal Network Agency should announce the so-called “emergency level” and ration gas, the group assumes that it will still have enough gas to maintain operations at least with reduced load, said the CEO.
BASF is not an isolated case. Another study by the Hertie School described in April how the entire German fertilizer production, for which ammonia is a central component, has largely switched to imports. Data from the business service Oxford Economics shows that imports of chemical products to Germany skyrocketed in the first half of the year, while domestic production fell steadily.
But not only the chemical industry is doing its part. The car manufacturer Mercedes-Benz sees a savings potential of 50 percent, the group announced in July. The paint shop at the Sindelfingen site can also be operated without gas. Screw manufacturer Würth is currently converting its furnaces, which harden the screw material, from gas to electricity. The glass manufacturer Wiegand Glas and the Veltins brewery announced that they would be able to switch from gas to heating oil in their production.
“There is no place for scaremongering,” says a recent study by well-known German economists for the Econtribute Cluster of Excellence of the Universities of Cologne and Bonn. “If Russian gas imports are stopped, there is no threat of mass poverty or popular uprisings, but production losses, which Germany has already dealt with in the past when it had to face crises.” The name of the study: “How to manage it”.
According to the authors, Germany would have to save around 25 percent of its gas consumption by the beginning of winter in order to survive the cold season without risk – in relation to the typical consumption from the beginning of August to the end of the heating period in May of the coming year. The economists judge that this is feasible, especially in view of the savings that have already been made. In addition, the gas storage tanks are constantly being filled and the first terminals for importing the liquid gas LNG should be operational in winter.
“At the same time, relatively little has happened on the demand side to reduce gas consumption and encourage industry and households to adapt as quickly as possible,” says the study. The authors recommend, for example, a temporary reduction in import duties on raw materials such as ammonia so that industry imports even more and produces less itself.
But instead of taking care of reducing the demand for gas, the federal government has so far mainly taken care of the supply side, for example by filling up the German gas storage facilities. It is important to fill the storage tanks, but even with 100 percent utilization, the capacity is too small to get through the winter with them alone.
The group of economists had already presented an initial calculation in March, according to which an immediate ban on gas imports would be painful for German industry, but manageable. The magnitude of the damage is roughly comparable to the damage caused by the corona pandemic, the study said. The calculations drew sharp criticism from parts of industry and trade unions. Even Chancellor Olaf Scholz (SPD) intervened: “But they see it wrong,” said Scholz in Anne Will’s ARD talk. “And frankly, it’s irresponsible to add up any mathematical models that don’t really work.”
The authors now feel confirmed by the developments of the last few months. The industry is on the right track, said co-author Ben Moll from the London School of Economics of the “Frankfurter Allgemeine Zeitung”. But: “Adaptation takes time. A lot more would have been possible if the industry had started working flat out in March instead of lobbying.”
