As I write this text, war has been raging in Ukraine for five days. And it is a war that you, dear readers, would not and could not have imagined in Europe after the lessons of the Second World War. Russia has attacked Ukraine, the justifications seem absurd. It is more reminiscent of the 19th than the 21st century. But even if one has to overcome a certain paralysis in order to continue working - as a manager from the gas industry with whom I spoke said, too - one has no choice but to deal with the consequences as soberly as possible. Since I am not a political analyst, I can only deal with the consequences for the gas industry. And gas is economically at the centre of this crisis. For the companies of the German gas industry, the war in and around Ukraine will bring to an end convictions that were formative for the entire industry for the entire natural gas era (pre- and post-liberalisation): Gas-related economic relations with Russia can be kept out of political tensions; economic gas-related ties have a peace-building and stabilising effect & the gas industry is in a position to regulate issues relating to the security of gas supply without political intervention...
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- Issue title:
The Ukraine War and the Gas Economic Consequences
- Publication date:
- 07.03.2022
- In this issue:
In February, things once again turned out differently than planned. Before leaving for my skiing holiday, I conducted a lengthy interview with Toni Reinholz from the German Energy Agency (Dena). The topic was guarantees of origin and certification of hydrogen, a very complex matter, but important for the market ramp-up of hydrogen. The interview was to be the topic of the month. Then the Ukraine crisis came to a head and Chancellor Olaf Scholz announced that the certification procedure for Nord Stream 2 would be suspended (at least that's the short version). I had planned to cover the topic in the editorial; there's not really much to report on it anyway. Then the Russian invasion of Ukraine began, which I did not believe in until the very end.
The gas economy has been different since the increasingly severe gas price turbulence and the change of government, but at the latest since the start of the Ukraine war. This urged me to write about it, so at the last moment, a piece strongly influenced by my opinion became the topic of the month. Comments are, of course, welcome.
How fundamentally the gas market will change remains to be seen. But my guess is that it will. What is clear is that at least the Federal Ministry of Economics and Climate Protection (BWMK) of the current federal government has no interest in a "natural gas market" in which price signals guide action. The BWMK will do everything it can to phase out the use of natural gas as quickly as possible. An ad-hoc working group on "gas reduction" has been set up in the ministry. The draft position paper of 22 February states: "Natural gas has so far been considered a safe and cost-effective bridge towards a climate-neutral energy supply (...). The current energy price crisis and geopolitical uncertainties require a re-evaluation of natural gas as a bridge to the baseload capability of renewable energies".
Due to my skiing holiday, the manuscript was only completed on 28 February. Let me assure you, dear reader, that I worked on everything related to the current crisis right up to the editorial deadline.
These will be/remain exciting times. Enjoy the reading nevertheless.
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