With a gas shortage, the German authorities are not up to bureaucracy and ideology – DW – 09/14/2022

A shortage of gas will not lead to a shortage of sugar in Germany this winter. Although this risk due to termination of Russian supplies by Gazprom was. After all, the 18 sugar factories operating in the FRG mostly operate on natural gas. Some of them were able to quickly switch to oil products and coal, but some enterprises will not be able to reorganize in a short time. So if this winter it comes to a physical shortage of gas, they will simply stop.

Antitrust Authority Temporarily Allows Sugar Cartel

To avoid the death of part of the sugar beet crop, the shortage of sugar and the rise in prices for it, the Federal Antimonopoly Office of Germany (Bundeskartellamt, BKartA) took a very unusual step. It allowed the four companies that control the German sugar market, the German Nordzucker, Südzucker, Pfeifer & Langen and the Dutch Cosun Beet, to provide each other with temporarily unloaded production capacities. In other words, raw materials from stopped factories can be taken to competitors and processed there.

Head of the Federal Antimonopoly Office of Germany Andreas Mundt
The head of the antimonopoly department of Germany, Andreas Mundt, is ready to make non-standard decisionsPhoto: Bundeskartellamt

In fact, such a permit is fundamentally contrary to the tasks of officials called upon to fight against cartels. However, an unusual crisis demanded extraordinary decisions from them. And they allowed the four sugar producers to negotiate with each other – but only until June 2023 and only if the state has to ration or completely cut off gas supplies to industrial enterprises. So it is only “a one-time and time-limited cooperation in case of an emergency in the gas supply”, explained in a press statement the head of BKartA Andreas Mundt (Andreas Mundt).

Such flexibility does not at all fit into the well-established image of the German state apparatus, which is usually criticized for particularly pedantic bureaucracy, slowness and complete lack of initiative. But it turns out that under the pressure of circumstances, German officials are quite capable of improvising and being creative.

Construction of the Tesla Gigafactory Proved the Efficiency of Officials

Actually, the first major refutation of the stereotype about German officials was the completion in the spring of 2022 of the construction of a gigafactory near Berlin by the American electric car manufacturer Tesla.

Grünheide, 03/22/2022.  Elon Musk greets German Chancellor Olaf Scholz and Prime Minister of Brandenburg Dietmar Woidke at the Tesla Gigafactory
Elon Musk showed the German Chancellor and the Prime Minister of Brandenburg what German officials are capable ofPhoto: Jens Krick/Flashpic/picture alliance

Under the pressure of the head of the world-famous company, Elon Musk, with his boundless entrepreneurial energy, the authorities and departments of the federal state of Brandenburg issued the necessary certificates, permits and orders so quickly, smoothly and often informally that a huge plant was built in a record short two years. And all this happened just a few kilometers from new Berlin-Brandenburg Airport BERthe construction of which, due to all sorts of mistakes, miscalculations and bureaucratic delays, dragged on for as many as 14 years and became a symbol of German long-term construction.

And now, under the pressure of the gas crisis, officials and politicians at the federal level are demonstrating their ability to act quickly and creatively. And the most striking example is the story not with sugar producers, but with LNG terminals.

You give an LNG terminal in ten months!

Here is a chronology of decisions taken after February 24, when Russia launched a large-scale aggression against Ukraine, and Berlin realized that it was necessary to reduce the extremely high dependence on Russian gas as quickly as possible, for which it was urgent to acquire its own capacities for receiving liquefied gas.

Construction of the berth for the regasification vessel in Wilhelmshaven began on 5 May
Construction of a berth for a regasification vessel in Wilhelmshaven began on May 5 Photo: Sina Schuldt/dpa/picture alliance

On February 27, German Chancellor Olaf Scholz at an emergency meeting of the Bundestag announced plans to build two LNG terminals in Germany. On May 4, Vice Chancellor and Economy Minister Robert Habeck announced that the German government had leased 4 regasification vessels to build floating terminals. On May 5, at Wilhelmshaven on the North Sea, construction began on a berth for the first of these ships.

On May 19, the Bundestag passed a law facilitating and speeding up the procedures for issuing permits for the construction of coastal infrastructure specifically for LNG terminals. On May 20, it was approved by the German chamber of lands – the Bundesrat.

On August 4, after receiving all the necessary documents, the laying of a 26-kilometer gas pipeline was officially started near Wilhelmshaven, which will connect the regasification vessel to the German main pipeline system. And they announced that its operation should begin on December 22, just in time for the Christmas holiday.

In this case, only ten months will pass between the Russian attack on Ukraine and the commissioning of the first German LNG terminal in the federal state of Lower Saxony. “It usually takes eight years for projects like this in this land,” Thomas Hüwener, head of the pipeline’s operator, Open Grid Europe, said at the opening ceremony.

Bavarian officials will help colleagues in the former GDR

Plans for accelerated construction of LNG terminals in Germany (currently decided by spring 2024, to put into operation already six regasification vessels) forced them to show flexibility and forget about inter-party differences between the leaders of two very dissimilar federal states.

Wealthy, industrialized Bavaria is located in the south and southeast of Germany, and it is ruled by conservatives from the Bavarian CSU party, who are in opposition to the current government of the country. And the relatively poor and largely agrarian state of Mecklenburg-Vorpommern in the far northeast off the Baltic coast in the former GDR is led by Social Democrats from Chancellor Olaf Scholz’s party.

Infographic: Where LNG terminals will be built in Germany

However, in Mecklenburg-Western Pomerania is the town of Lubmin, where two Russian underwater gas pipelines come ashore – Nord Stream, now suspended by Gazprom and buried Nord Stream 2. Because of them, two powerful German gas pipelines Opal and Eugal were once brought to this point in order to pump gas from north to south to the border with the Czech Republic, and from there send part of the volumes through the Czech territory to Bavaria. And now, thanks to this ready-made gas transportation infrastructure, Lubmin will receive two LNG terminals at once.

To speed up their commissioning as soon as possible, Bavarian leader Markus Söder and Mecklenburg-Vorpommern Prime Minister Manuela Schwesig signed an agreement on August 30 that Bavaria would send a group of experienced officials to the north. They will help local regulators to complete all the bureaucratic procedures for issuing the necessary permits to these terminals as quickly as possible.

The ideological openness of the leaders of the German “greens”

Another example of the ideological openness of German politicians in a crisis situation is the readiness of the Green Party, which is part of the current government coalition in Germany, to agree to a temporary, until the end of April 2023, large-scale use of coal-fired power plants already sent to the reserve and even mothballed, in order to minimize gas consumption in the electric power industry. Moreover, one of the leaders of the “green” Economy Minister Robert Habek, in order to stabilize energy supply in the coming winter, even suggested Postpone the long-determined total phase-out of nuclear energy.

German Vice Chancellor and Economics Minister Robert Habeck
The most popular “green” in Germany: Vice-Chancellor and Minister of Economics Robert Habeck Photo: Kay Nietfeld/dpa/picture alliance

And another example of non-trivial decisions of the German authorities in the context of the energy crisis can be considered the decree of the German government adopted at the end of August, which provides that the railway, if necessary, will be the first to pass trains with coal and oil for power plants or refineries, and not passenger trains.

All of the above examples show that traditional German bureaucracy and party ideological attitudes do not prevent German politicians and officials from showing pragmatism and creativity in an emergency. Therefore, we can proceed from the fact that in the event of an aggravation of the energy crisis this winter, they will be ready to promptly make new non-standard decisions.

See also:

LNG terminals – an alternative to gas from Russia?

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