Next Monday, Russia’s energy giant Gazprom will shut down the Nord Stream 1 Baltic Sea pipeline for its scheduled maintenance. For ten days no gas will then flow to Germany. The fear is great that nothing will arrive after that either.
It is well known that Russia uses its gas supplies as a political weapon. The transport to Poland and Bulgaria was stopped in April, and in September last year the gas storage facility operated by Gazprom near Rehden in Lower Saxony was insufficiently filled. In the past few decades, the Baltic countries, Ukraine, Moldova and Georgia have also felt the effects of delivery stops.
The concern that Russia could also turn off the gas supply to Germany in the course of the Ukraine war is justified. A good reason for this would be the annual maintenance of the Nord Stream 1 Baltic Sea pipeline. It will start next Monday, July 11, and should last ten days. It is questionable whether the tap will be turned on again afterwards. “This could result in longer-lasting political maintenance,” said Klaus Müller, President of the Federal Network Agency, recently to the Funke media group.
No gas via Nord Stream 1 would not paralyze Germany, but would mean significant cuts. In normal times, 155 million cubic meters of gas flow through the pipeline every day. In mid-June, Gazprom reduced this number to 100 million cubic meters because spare parts for Siemens gas turbines cannot be delivered due to sanctions against Russia. Nord Stream 1 achieves a maximum delivery volume of 55 billion cubic meters per year. This corresponds to around 72 percent of gas imports from Russia and thus around 25 percent of all German gas imports.
Should no more gas flow through Nord Stream 1, Germany would be hit hard. After all, a quarter of imports cannot be replaced within a few weeks. The federal government has made provisions for this eventuality. Should the import situation be severely affected, she could announce the third stage of the gas emergency plan. Protected customers would then be given priority. This category includes private households, public institutions and the healthcare industry.
However, industrial companies are not protected. They consume around 52 percent of the imported gas in Germany. At the forefront is the chemical giant BASF from Ludwigshafen. Before the Ukraine war, he got up to 40 percent of his gas needs from Russia. The Dax group needs the raw material as an energy supplier on the one hand, but also for production, for example for fertilizers, on the other. As early as April, CEO Martin Brudermüller warned at the annual general meeting that the group might have to stop production in the event of a sudden stop in deliveries from Russia.
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This scenario is still on the table today. Although BASF is also working on other sources of supply or gas alternatives, this cannot be accomplished within a few weeks. If gas supplies fall by a maximum of 50 percent overall – not just from Russia – the main site in Ludwigshafen could continue to operate with limited capacity. If the delivery quantity falls below this, it must be closed until the delivery stop ends or alternatives are found.
Although steel manufacturers such as ThyssenKrupp and Salzgitter are already experimenting with blast furnaces that run on hydrogen and/or renewable energies, these systems are not yet ready for series production. Natural gas is still the method of choice for steel production and a delivery stop would be fatal. The Essen-based group expects to be able to operate like BASF with 50 percent. Salzgitter does not give any figures, but points out that without natural gas there will be no steel production.
The situation is similar in the glass industry. Here even 70 percent of the normal delivery volume is necessary so that production can continue. Worse still, the tanks in which the glass raw materials are melted cannot be switched off. They are designed for continuous operation of 10 to 15 years. If the fire goes out underneath, the raw materials harden, which in the best case only destroys the systems, in the worst case it can lead to explosions. Although there are also experiments with renewable energies in this sector, they are not yet very advanced.
Some people therefore fall back on the tried and tested in their emergency plans. The flavor manufacturer Symrise had only switched its production from oil to gas in recent years. But the old boilers are still there. “Fortunately, we didn’t dismantle them,” says Bernhard Kott, head of sustainability, to the Handelsblatt. Plant operation at the Holzminden headquarters with oil would not be sustainable, but at least production could continue after a brief interruption without natural gas.
Anyone who does not need gas for production can save more. Corporations in which work is mainly done in the office are therefore considering increasing the proportion of home office again in an emergency. The consumer goods manufacturer Henkel is one of them. If there are fewer people in the office, they could be placed in such a way that some rooms do not need to be heated at all or only slightly. The gas heaters in the home office are protected in the “gas emergency plan”, but not in the office.
The problem: In Germany, natural gas is used in fundamental sectors such as chemicals, steel and metal in general. The products manufactured there are then vital for the survival of other industries. Without aluminum, for example, the manufacture of cars would stagnate, without steel in house construction and mechanical engineering, without flavorings in the food industry, and without glass in the production of medical equipment and medicines. Even breweries could not continue as before: “If there were no Russian gas, we would have a significant problem: without gas, no beer,” says Veltins boss Michael Huber to Börse Online.
Accordingly, a study by the Bavarian Business Association assumes devastating consequences if gas imports from Russia are completely eliminated. The numbers should be treated with caution because so far we are only talking about a delivery stop via Nord Stream 1. Accordingly, the German gross domestic product would fall by 12.7 percent. 5.6 million jobs would be directly affected. However, the damage would be smaller the faster alternatives to Russian natural gas could be found.
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