The federal government does not know how much gas is available in Germany in winter. The federal government only gets the gas in the storage facilities if it pays the best price. And then there is an EU regulation that could now become immensely important.
The Federal Government does not know how much of the stored gas will be available to German companies in winter. This admission has sparked outrage.
If the gas is bought with tax money in the future due to high prices, the idea is that it must also be available to the taxpayers.
Or as CDU parliamentary group leader Jens Spahn puts it: “The very expensive gas bought in our storage facilities has to reach German consumers in winter. To do this, the traffic light must finally submit a withdrawal plan. Otherwise full memory gives a false sense of security.”
The opposition politician puts his finger in the wound. In fact, with its planned gas price cap of probably 200 billion euros, the government will ensure that gas is available to consumers at a fixed price, whatever the market cost.
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In doing so, it overrides the market economy. The traders, however, who own part of the gas in the German storage facilities, which are now well filled, sell at top prices. The market economy still applies here.
And only if the federal government pays the most does it get the gas and can pass it on to German consumers. Consequently, the federal government should actually take the next step and become the largest retailer itself, which then only sells to its own compatriots.
The market would then be completely suspended, the planned economy would rule and there would be what Spahn calls for: a “waste plan”. However, there would still be an unknown factor in play, which makes it uncertain how much gas the Germans will actually get from their domestic storage facilities.
The unknown is hiding behind an EU jargon: Gas Supply Security Ordinance. That’s four words pressed into one, behind which there is an apparently simple idea: In an emergency, the countries of the European Union should help each other out with gas supplies.
Specifically, since December 2018, EU member states that are connected via pipelines have been obliged to conclude bilateral “solidarity agreements” on gas supplies with each other.
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What is meant is an “extreme gas shortage” when “particularly vulnerable customer groups such as private households and social institutions” have to be protected. Concrete processes and obligations should be regulated in the contracts, i.e. when one country helps the other.
“For example, it is also a matter of ensuring that transmission rights are guaranteed in the event of a gas shortage and that appropriate technical precautions are taken for this,” explains a spokesman for the Federal Ministry of Economics when asked.
Germany had almost four years to conclude such solidarity agreements. It was only successful with two: Germany and Denmark were the first member states to reach an agreement in December 2020. There has been an agreement with Austria since 2021.
The Federal Ministry of Economics has agreed to conclude a bilateral agreement with the Czech Republic by the beginning of winter. In the case of Italy, the negotiations are currently on hold because of the parliamentary elections that have just taken place there. It remains to be seen how the new right-wing government in Rome will react to this EU regulation.
Neighboring countries such as Belgium, Luxembourg, Poland and the Netherlands are finding it very difficult to seriously enter into negotiations. When asked, the Federal Ministry of Economics only points out that these countries “have publicly declared that they will support Germany in any case in the event of a severe gas shortage”.
According to the Federal Ministry of Economics, there are negotiations with other countries, but no details or results could be communicated. Conclusion: Despite good will, solidarity within the EU is not that far off, at least when it comes to gas.
Experts explain the lack of enthusiasm in some states with financial motives: countries do not own gas themselves, but would have to procure it from companies, i.e. expropriate it and compensate them financially.
In Germany, this is clearly regulated in the Basic Law, in many other countries there is no such compensation logic. Even more important is the simple fact that virtually no country has to give up excess gas without having to save itself.
Even the few countries with their own gas production – like the Netherlands – would like to sell more gas if they could.
With 240 terawatt hours, Germany has by far the largest gas storage of the EU countries and can thus last two to three months at normal temperatures. Only six countries have more than 37 terawatt hours of storage.
A shipment of solidarity would hurt any country, some more and others less. The Ministry of Economic Affairs is concerned about the rather reserved cohesion.
“Especially against the background of the current situation and an increased susceptibility to gas crises, this is problematic, since a significant component of the EU gas crisis resilience in the form of the mechanisms of the bilateral agreements would not take effect,” says a written report by the Ministry of Economic Affairs for the Bundestag Committee on Climate Protection and Energy.
Irrespective of the bilateral solidarity agreements, there are “provisions for performance and provision of solidarity” within the EU. Member States are therefore obliged to show mutual solidarity. However, this passage is very vague in the specific case of “gas emergency 2022”.
The agreements would offer more legal security and, above all, clear regulations for faster implementation: “For example, it is also a matter of ensuring that transmission rights are guaranteed in the event of a gas shortage and that appropriate technical precautions are taken for this,” says the Ministry of Economic Affairs.
There is no answer to the question of whether and in which cases Germany would help other countries, which makes it clear: Solidarity with others also means that the stocks in Germany – whether gas cap or price brake – are not only available to Germans stand.
*The article “Stored gas doesn’t even belong to us – why that’s good news” is published by WirtschaftsKurier. Contact the person responsible here.
