Maintenance work on Nord Stream 1 is fueling fears that Putin will dry up the gas. If necessary, the gas importers would then have to be allowed to pass on the higher prices to the public utilities. The result would be a price explosion. Habeck wants to take countermeasures with a reform of the Energy Security Act.
According to Federal Economics Minister Robert Habeck, the feared stop to all Russian gas deliveries could result in a price explosion at some municipal utilities. Habeck and the President of the Federal Network Agency, Klaus Müller, fear a total failure of deliveries via the Baltic Sea pipeline Nord Stream 1.
At an event hosted by the weekly newspaper “Die Zeit”, Habeck said that the Russian attack on Ukraine was a “quasi economic warfare dispute”. The Russian calculus is to “destroy the unity and solidarity of the country” through high prices in Germany. According to Habeck, it is still unclear whether Russia’s President Vladimir Putin will actually turn off the gas. “The question is: does he really do it?” It’s not out of the question.
Suppliers, such as the largest German gas importer Uniper, which got into trouble, had to buy missing gas at high prices on the market at short notice, but they cannot pass on the higher price directly to customers such as municipal utilities because of the existing contracts. Habeck said: “The companies that now have a lot of Russian gas have a real problem.” Either the state supports them with tax money. “Or you allow the companies to pass on the prices.” However, since some importers also purchase gas from other countries and have lower additional costs, customers would be hit very differently. A paragraph that would allow companies to pass on prices outside of the contract has not yet been activated. Because this is “a very, very sharp sword. That would mean that for some public utilities, which would then have to deal with their customers, you would immediately have a price explosion.”
Habeck is therefore planning a further reform of the Energy Security Act. “Because we are currently in a learning system, it has to be touched again,” said the Green politician. “We’re currently in talks with the parliamentary groups.” He thus confirmed a report by the Reuters news agency, which has a draft of the law that the Bundestag and Bundesrat are to adopt next week. It envisages the possibility of distributing the additional costs of all gas importers for the replacement purchase of the gas quantities that Russia is no longer supplying, in principle, evenly among all customers. This possibility might not drive the wedge so sharply into society. The President of the Federal Network Agency, Klaus Müller, told the newspapers of the Funke media group: “Many consumers will be shocked when they get mail from their energy supplier. What Putin is giving us with Nord Stream 1 can triple it.”
If the gas flow from Russia is “motivated to be lowered for a longer period of time, we have to talk more seriously about savings,” said Müller. The twelve weeks before the start of the heating season would have to be used for preparations. Habeck initially relies on saving gas on a voluntary basis, as he said. If gas saving had to be prescribed, this also depended on the networks. It will then probably be regulated at the expense of those factories that are not part of a mixed network that also supplies protected private households. According to the President of the Federal Network Agency, in the event of a Russian gas supply stop, private households as well as hospitals and nursing homes would be given special protection.
If industrial companies have to be separated from the gas supply, “we orient ourselves to the business damage, the economic damage, the social consequences and also the technical requirements of the gas network operation,” said Müller. Müller called for gas condensing boilers and radiators to be checked and, if necessary, adjusted more efficiently. Hamburg’s Senator for the Environment, Jens Kerstan, does not rule out limiting hot water for private households in the event of a gas emergency in the Hanseatic city, as he made clear in the “Welt am Sonntag”.
Nord Stream’s annual maintenance work, which usually lasts ten days, begins on July 11. Then no gas flows through Nord Stream 1. The big concern is that Russia will not turn on the gas tap again after the maintenance. Meanwhile, the Norwegian government expects to be able to supply even more gas by 2024 at the latest. “Companies are now examining projects to be able to increase their gas supplies from 2024 and 2025,” Norway’s Oil and Energy Minister Terje Aasland told Wirtschaftswoche. The country’s companies have never exported as much natural gas from the Norwegian continental shelf as they do now. “We support our European friends in being able to act independently of Russian oil and gas as quickly as possible.”
