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German Academy of Sciences Contradicts Chancellor Scholz on Russian Gas Dependency

Academia de ciencias alemana contradice al canciller Scholz y dice que el país puede prescindir del gas ruso

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The German National Academy of Sciences, known as the Leopoldina, considers the consequences of an interruption of Russian gas supplies — either as a result of sanctions or as Moscow’s reaction to them — as “acceptable.”

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

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

In its study, the Leopoldina calls for a European fast-track mechanism and adds that it would be “irresponsible” to react only when supply is disrupted.

An embargo will mean costs but, according to the analysis, Germany has room to bear them.

In the short term, an embargo would cost German GDP between 0.5 percent and 3.0 percent. In 2020, because of the pandemic, German GDP fell by 4.5 percent.

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

The study now takes on added relevance after Moscow threatened to cut off the gas supply via the Nord Stream I pipeline, in reaction to the sanctions imposed following the aggression against Ukraine.

Since the aggression against Ukraine, and the three packages of EU and US sanctions against Russia, prices for this fossil energy have soared and have reached 330 euros per megawatt-hour, after being at 60 euros MG/h at the beginning of the year.

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

While the U.S. 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, argues 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 sufficient to generate 1,100 terawatt-hours. With Russian gas, 1,768 TW/h are generated.

In addition, there is a lack of transport capacity, so it is important to enter into negotiations with liquid gas exporters such as Japan and South Korea.

The Leopoldina recommends filling the gas deposits in the summer, in order to have sufficient supply, and to prevent the Russian state-owned 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.

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