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Germany Weighs Creating National Gas Reserves to Prevent Winter Shortages

Germany Weighs Creating National Gas Reserves to Prevent Winter Shortages
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Germany is considering creating government-controlled natural gas storage sites as it tries to prevent another shortage of the fuel ahead of next winter, Economy Minister Robert Habeck said.

Habeck, a co-leader of the Greens party who took office last month, said another option would be an obligation for Germany’s gas-storage facilities to maintain a certain volume at any specific time. 

Europe is seeking ways to avoid a repeat of the crisis that has gripped the region this winter amid perilously depleted inventories and curbed supplies from Russia that have sent energy prices to record highs.

“The issue must be resolved by next winter,” Habeck said Wednesday during government questions in the lower house of parliament. “We can’t run into a situation like we’ve been through again. That would be really negligent.”

Germany’s storage facilities are operated by private companies, and national inventories would give the government more control on how to utilize gas supplies in case of emergencies. 

Both the national reserve and mandating storage levels have their advantages and disadvantages, Habeck said, without clarifying. There are also “market interventions” which “raise the question of compensation or guarantees.”

Germany imports most of its gas, and about half of those supplies come from Russia. That reliance has come into sharp focus in recent months as tensions rise with Russia building up troops on Ukraine’s eastern border. The U.S. and Europe are threatening severe sanctions should there be an attack, which could potentially impact gas supplies. President Vladimir Putin has denied any current plans for an invasion.

High prices in Europe have also been stoked by concern that Nord Stream 2, a controversial new pipeline under the Baltic Sea that would supply Germany with Russian gas, may be delayed or scrapped altogether.  

Habeck reiterated the government’s stance Wednesday that if Russia invades Ukraine “all options are open,” including possible action against the pipeline.

He also said Germany needs to diversify its gas purchases, and should buy liquefied natural gas “wherever it’s cheapest.”

©2022 Bloomberg L.P.

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