German Academy of Sciences sees “affordable” dispensing with Russian gas

The German National Academy of Sciences, known as the Leopoldina, considers the consequences of an interruption of the Russian gas supply to be “acceptable”, either as a consequence of the sanctions, or as a reaction of Russia to them.

In a study to which German media have had access, Leopoldina reaches conclusions contrary to those expressed by the German Chancellor, Olaf Scholz, and the Confederation of German Industry (BDI), according to which an alternative to Russian gas cannot be found From overnight.

“Policymakers underestimate that when prices rise, consumers and prices will look for other energy sources and seek to reduce consumption,” said economist Moritz Schularick of the University of Bonn, one of the study’s authors.

In her study, Leopoldina calls for a rapid European mechanism and says that it would be “irresponsible” to react only when the supply is interrupted.

An embargo would bring costs but, according to the study, Germany has room to assume them.

An embargo would cost the German Gross Domestic Product (GDP) between 0.5% and 3% in the short term. In 2020, due to the pandemic, the German GDP fell by 4.5%.

The costs would be between 100 and 1,000 euros per year per inhabitant.

The study now acquires more relevance after Moscow threatened to cut off the gas supply through the Nord Stream I gas pipeline as a reaction to the sanctions imposed after the aggression against Ukraine.

Since the aggression against Ukraine and the three packages of sanctions by the EU and the United States on Russia, the prices of this fossil energy have skyrocketed and have reached 330 euros per megawatt hour after they were at 60 euros MG/hour at the beginning of the year. h.

A barrel of Brent oil, a benchmark in Europe, costs almost US$140, the highest price reached since 2008.

While the United States is already considering an embargo on Russian oil and gas, Germany has been reluctant to do so.

The Leopoldina study, in which economists such as Veronika Grimm and climate change experts such as Otmar Edenhöfer participated, maintains that the possibility of covering the supply cut with imports of liquefied natural gas (LNG) should only be part of the strategy.

The LNG would arrive in Europe by ship and would be enough to generate 1,100 terawatt hours. With Russian gas, 1,768 TW/h are generated.

In addition, transportation capacities are lacking, so it is important to enter into negotiations with liquefied gas exporters such as Japan and South Korea.

The Leopoldina recommends filling the gas deposits in the summer, to have a sufficient supply and prevent the Russian state consortium Gazprom from dictating prices when the next winter arrives.

In addition, the use of coal in power generation can be increased in the short term, which would bring costs in the emission of CO2 certificates. However, the authors refuse to question the goal of abandoning coal use by 2030.