Germany declares gas crisis as Russia cuts supplies to Europe – Henry Club

Germany activated its second phase on Thursday Three Phase Gas Emergency ProgramTaking it one step closer to supplying ration to the industry – a move that would deal a major blow to the manufacturing hub of its economy.

German Economy Minister Robert Habeck said he hoped rations would not be needed to survive the coming winter, but this could not be ruled out.

“Gas are in short supply now,” he told reporters at a press conference in Berlin. “Even if you don’t realize it yet: we are in gas trouble.”

Europe’s energy crisis escalated this month as Russia cut supplies to Germany, Italy and other EU members.

Russia’s state gas company Gazprom last week slashed flow into Germany through the Nord Stream 1 pipeline by 60%, blaming the move on the West’s decision to withdraw critical turbines due to sanctions. Italian energy giant ENI said Gazprom is cutting its supply by 15%.

Twelve EU countries have so far been hit by Russian gas supply cuts, the bloc’s climate policy chief Frans Timmermann said on Thursday.

“Russia has weaponized energy, and we have seen more gas disruptions announced in recent days. All this is part of Russia’s strategy to undermine our unity,” Timmermann told EU lawmakers.

“So the risk of complete gas disruption is now more real than ever,” he emphasized.

Kremlin spokesman Dmitry Peskov said on Thursday that the cuts to Russian gas supplies to Europe were a result of technical issues rather than political ones, adding that there was “no hidden agenda.”

‘economic conflict’

Habeck called on all consumers – industry, households and public institutions – to reduce their consumption as much as possible “so that we can get through the winter.”

European natural gas futures prices are trading around €133 ($140) per megawatt hour (MWh), up nearly 60% since the middle of this month, according to data from the Intercontinental Exchange, last seen in March.

Habeck said that while German gas storage facilities are 58% complete – more than at this time last year – the target of reaching 90% by December would not be achieved without further measures.

“We are in an economic confrontation with Russia,” Hebek said.

The recent throttling of Gazprom’s gas flow comes after it cut supplies to energy companies in Poland, Bulgaria and Finland and Denmark, Germany and the Netherlands because of the Kremlin’s refusal to pay demand in rubles.

turn to coal

Germany, Austria and other EU countries are now turn to coal and oil-fired power stations so that more gas can be sent to storage to heat homes during the winter.

Since the invasion of Ukraine in late February, Europe has tried to reduce its reliance on Russian natural gas. Germany has managed to reduce Moscow’s share of its imports from 55% to 35% before the start of the war.

But its options to find alternative supplies were knocked down last week when a major US producer of liquefied natural gas said its facility in Texas would be completely closed for 90 days after the fire. According to analytics firm Vortex, Freeport LNG has produced about a fifth of US LNG exports so far this year.

Germany activated the first “early warning” phase of its emergency energy program in March. There will be an “emergency” if the situation worsens after the “alarm” phase announced on Thursday. In that highest case, regulators can ration gas to maintain supplies to “protected customers” such as homes and hospitals. Industrial users will be the first to face the cut.

— Anna Coban, Sharon Braithwaite, James Frater, Anna Chernova and Benjamin Brown contributed to this article.