Economic institute says current levels of gas enough for six weeks if mild temperatures continue
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Last modified on Wed 23 Feb 2022 11.07 EST
Europe could heat its citizens’ homes and power its industry on existing gas reserves for the remaining months of a relatively mild winter even if the standoff with Moscow over Ukraine were to escalate to a total stop on Russian gas imports, a leading German economic institute has said.
Unusually low gas reserves have raised alarm among several European governments in recent months, with storage tanks across the continent on average only at 31% capacity at the start of this week – roughly half as full as in 2020.
In Germany, reserves have been particularly low in storage tanks run by Russian state-owned energy giant Gazprom, seemingly highlighting the country’s restricted room for meaningful sanctions in the case of an escalating conflict on the Ukrainian border.
But after the German chancellor, Olaf Scholz, on Tuesday announced a freeze on certifying the Nord Stream 2 pipeline between Russia and Germany, and former Russian president Dmitry Medvedev threatened an ensuing doubling in European gas prices, German politicians and economist have struck a note of defiance.
According to calculations by the Institute of Energy Economics at the University of Cologne shared with the Guardian, current levels of gas held in European reserves “could compensate for a loss of Russian deliveries” over the next six weeks unless temperatures were to drop dramatically in February or March.
The institute’s analysis chimes with a cautiously optimistic report by the German Economic Institute, also published on Wednesday. While a complete loss of Russian gas imports, currently making up almost half of Germany’s gas needs, “will lead to bottlenecks in some European countries”, the Cologne-based institute says such supply shortages “would be limited to up to 10% of demand”.
“German citizens not being to heat their homes this year is not a realistic scenario,” the study’s author, Andreas Fischer, told the Guardian. “But European governments have to make sure reserves are topped up again for the next winter.”
Fischer said he was encouraged by the growing imports of liquid gas, of which Europe imported a record volume of 11bn cubic metres this January.
The report voices scepticism over how quickly Germany will be able to wean itself off natural gas, predicting that its needs will only decrease by 6% to 17% by 2030. “Natural gas will continue to be the central energy source for heating supply in the coming years.”
A renewed confidence that energy dependence would not restrain political action in response to Russia’s recognition of the self-proclaimed republics in Luhansk and Donetsk in east Ukraine was shared in Berlin and Brussels, reported Der Spiegel. “The fear of a stop of gas deliveries appears to have melted away like remaining snow at the end of the winter”, wrote the news magazine.
A report by the Kiel Institute for the World Economy even asserts bullishly that Russia stopping gas deliveries would hit the Russia’s economy harder than Europe’s.
“A trade stop with gas would result in a slump in Russian economic output of just under 3%”, the study claimed. “For Germany and the EU, there would hardly be any economic damage.
According to the northern German institute’s calculations, a gas embargo would lead Russia’s gross domestic product (GDP) to slump by 2.9%. Germany’s GDP, it argues, would slightly increase by 0.1%, as western allies would replace Russian imports with those from each other.
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