“Freezing Against Putin”
Acquisition of liquefied gas for Germany to phase out Russian gas is only making slow progress. A minimum quantity must in any case still be paid from Gazprom.
BERLIN/DOHA (Own report) – Acquisition of new gas supplies for Germany to phase out Russian gas supplies is progressing more sluggishly than desired. As was announced after talks Germany’s Minister of the Economy, Robert Habeck had held in Qatar’s capital Doha, it was not possible to secure a significant amount in short-term deliveries. At best, Doha will deliver a greater supply of natural gas to Germany in a few years, according to the report. Habeck had obtained similar results earlier in the USA and Norway. Thus, Germany could remain dependent longer than had been hoped on Russian natural gas. A similar result was reached in the analysis published by the Oxford Institute for Energy Studies (OIES) on the EU, which would need more liquefied gas, than is currently available on the world market, to make up for the loss of Russian gas. Media and politicians are promoting a scaling back of natural gas consumption, using such slogans as “Freezing for Freedom.” The OIES also points out that the long-term supply contracts with Gazprom stipulate an obligatory minimum quantity purchase of approx. 120 billion cubic meters (bcm) of gas. This must be purchased, even if the consumer does not use it.
Unsuccessful in the short term
Germany’s Minister of the Economy Robert Habeck terminated his visit to Qatar’s capital Doha yesterday, with a moderate success in the search for sources of natural gas. Habeck was able to announce the conclusion of a long-term “energy partnership” between Germany and the Emirate of Qatar, for which German enterprises are now to enter into contract negotiations. This involves not only business deals in the natural gas sector but contracts in the sector of renewable energies, as well. Contrary to what had been initially hoped, Habeck was unsuccessful in obtaining a significant increase in the short-term supply of gas from Qatar. That is what had been hoped, because Berlin is seeking to completely phase out its purchase of Russian natural gas, which currently accounts for 55 percent of the German annual gas consumption of approx. 90 bcm. Qatar exports huge amounts – 107 bcm in 2019 – however, between 90 – 95 percent is on a long-term basis reserved primarily for Asia and only a minor portion for Europe. More than a small number of purchases on the spot market will not be possible for Berlin, for the time being. Because Qatar is increasing its natural gas production, larger imports will probably be possible in the future – however, only in a few years. Additionally, given the fact that Berlin seeks to switch to renewable energy as soon as possible, Germany is not one of Qatar’s preferred customers.
Only Small Amounts
Habeck’s efforts to acquire additional natural gas for Germany this year had already received a setback. Talks in the USA, at the beginning of March, had not yielded much success. Significant increases in the importation of US liquefied gas can hardly be expected on short notice, because the United States “lacks the corresponding terminal capacity,” explained an expert at the German Institute for International and Security Affairs (SWP). In principle, it is possible to obtain 12.7 bcm of gas from the US state of North Dakota, it was reported, shortly after Habeck’s return from Washington – although, not before 2027 at the earliest. In Oslo, the German economics minister was promised last week that Norway’s Equinor would be able to supply supplementary liquefied natural gas this summer – but only 1.4 bcm. The Nord Stream pipeline 1, alone, provided an annual volume of 55 bcm. In any case, the Norwegians, according to reports, can help out with special vessels, capable of transforming liquefied gas back into regular gas, so that it can be brought ashore and fed into pipelines. They are at least necessary for the time being, given that Germany does not currently dispose of liquefied gas terminals. Two are now in planning, but will be operational only in a few years.
Demand Exceeds Supply
It still remains unclear, where Berlin will get enough liquefied gas to replace Russia’s gas, and the EU is in the same situation. March 8, Brussels announced that in the course of this year, the Union member countries should reduce their imports of Russian gas from 155 bcm (2021) by two-thirds or by 101.5 bcm. They should tap other sources to provide 63.5 bcm, and 38 bcm should be economized. The Oxford Institute for Energy Studies examined this ambitious plan, in a meticulous analysis, and concluded that this can hardly be achieved. According to the institute it is realistic to assume that pipeline gas from Norway, Algeria and Azerbaijan could increase the quantity, in total, by around 10 bcm. However, it is difficult to imagine that it will be possible to replace 3.5 bcm of natural gas with the rapid expansion of biomethane production. Moreover, it is unclear who is supposed to supply the 50 bcm of liquefied gas, Brussels seeks to purchase supplementary to its previous imports. An increase of a maximum of 43 bcm in exports can be expected globally. China, Southeast Asian countries and others are also looking to import larger amounts than before. The EU will hardly be able to buy it all in their place.
”Saving Energy to Damage Putin”
According to the OIES, it is also unclear how 38 bcm of natural gas is supposed to be economized. The target – to replace up to 20 bcm by the conversion to renewable or nuclear energy – is “ambitious, but possible,” considers the Oxford Institute. However, there is uncertainty about the plan to economize 18 bcm of natural gas in private households – through the installation of photovoltaic cells or heating pumps, better insolation of houses and simple energy conservation, for example, by heating less. The OIES explains that a quantification is difficult. Estimates part from the premise that up to 10 bcm could be economized, if throughout the EU all thermostats would be lowered one degree. The question is, how should “consumers be motivated to do this.” In Germany, major media outlets have begun beating the drums for “heating without Putin” (with heating pumps, “Zeit Online” [7)], for a reduction in room temperature (“with Pulli against Putin” – “wearing a sweater to spite Putin” – “The Tagesspiegel” [8)], or for “Freezing for Freedom” (ex-German President, Joachim Gauck ). About two weeks ago, Economics Minister Habeck had proposed, “if you want to do some damage to Putin, save energy.”
Even if, contrary to expectations, the EU fully implements both the natural gas imports as well as its energy austerity measures according to plan, three unsolved problems will still remain. First of all, Brussels had stipulated that the EU’s major natural gas reservoirs must be 90 percent capacity on October 1, to be able to ensure supplies during the winter. This would imply, according to OIES calculations, finding an additional 20-25 bcm. Where they are supposed to come from – when Russian gas is out of the question – is completely unclear. Secondly, the OIES parts from the premise for 2023 and 2024 that the competition for natural gas will have become more intensified on the world market, because gas consumption outside Europe, particularly in Asia, will have grown exponentially. Thirdly, those companies that have concluded long-term contracts with Gazprom, with Take-or-Pay clauses are obligated to pay for a minimum amount of the gas, even if the customer does not retrieve the gas. The OIES estimates this to be at 120 bcm this year. Should the customer refuse to pay, Gazprom can easily file suit at the end of the conflict, explains the Oxford Institute. Actually, with this, the objective of depriving Moscow of its payments has missed its target.
For more information on this topic: The War and the Euro.
 Julia Löhr: Ein Signal auch an Putin. Frankfurter Allgemeine Zeitung 21.03.2022.
 Klaus Stratmann: Keine Lieferzusage, aber gute Signale: Habeck verabredet langfristige Energie-Partnerschaft mit Katar. handelsblatt.com 20.03.2022.
 Moritz Koch, Mathias Brüggmann, Klaus Stratmann: Habecks schwierige Suche nach neuen Bezugsquellen für Erdgas, Erdöl und Steinkohle. handelsblatt.com 17.03.2022.
 Norwegen sagt Deutschland zusätzliche Gaslieferungen zu. t-online.de 17.03.2022.
,  The EU plan to reduce Russian gas imports by two-thirds by the end of 2022: Practical realities and implications. The Oxford Institute for Energy Studies. Oxford, March 2022.
 Zacharias Zacharakis: Heizen ohne Putin. zeit.de 16.03.2022.
 Patrick Eickemeier: Mit Pulli gegen Putin. Energiespartipps für den Frieden. plus.tagesspiegel.de 11.03.2022.
 Ex-Bundespräsident Gauck: „Frieren für die Freiheit“. sueddeutsche.de 10.03.2022.
 Daniel Pokraka: „Wer Putin schaden will, spart Energie“. tagesschau.de 05.03.2022.
 The EU plan to reduce Russian gas imports by two-thirds by the end of 2022: Practical realities and implications. The Oxford Institute for Energy Studies. Oxford, March 2022.