What the Natural Gas Shortage Means for Germany: A Winter of Privation?

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The government and the Federal Network Agency are proud of having boosted deliveries from Norway and the Netherlands and of the amount of natural gas they have managed to purchase on the international market. The fact that the country’s storage facilities are close to capacity is also a source of pride.

“We even managed to stockpile when deliveries from Nord Stream 1 were completely suspended due to alleged maintenance,” says an official at the Federal Network Agency. That will provide a vital buffer for the winter.

Just as important, though, will be uninterrupted deliveries from Norway and the Netherlands. Significant technical difficulties would be extremely difficult to overcome.

Habeck has said over and over again that one decisive factor will be a 20 percent reduction in natural gas consumption. The painfully high gas prices which have heaped political pressure on the government could ultimately be a key factor in achieving that reduction: Both industrial operations and private consumers are likely to cut natural gas usage in response.

Will natural gas become even more expensive?

Higher gas bills are a distinct possibility, though they won’t be as sudden as those seen on Monday morning on the European futures markets. Most serious suppliers buy their gas over the course of months, or even years, frequently far in advance of deliveries on the derivatives markets.

The result of those purchases is an average price, the foundation for their price calculations. The result is that the bill paid by consumers include prices paid for past years along with predicted prices for coming years.

On the one hand, that will slow down the current price spike. On the other, though, it means that gas prices for consumers will remain high for the next several years, even if the market price begins to drop.

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