Germany girds for day of reckoning in gas showdown with Russia

German decision makers are looking at a combination of factors that would trigger higher alert levels, including a sharp reduction in gas flows and signs that Russian President Vladimir Putin is prepared to completely shut off supplies, according to people close to the discussions.

The expectation is that the highest stage, which would involve state control over Germany’s gas distribution, would soon follow after an escalation to the second “alarm” stage, said the people, who asked not to be identified because the talks are private.

Planning for rationing

On Monday, Germany’s network regulator, known as BNetzA, will compile results of a survey in which more than 2,500 companies detailed consumption patterns and energy options. It’s part of the building blocks to potential rationing that the Bonn-based agency would implement if the government declares a national gas emergency.

The regulator has appointed 65 staffers who will work around the clock in shifts to troubleshoot if there’s a major interruption. Operating out of an annex at its headquarters near the Rhine river, the teams will be charged with making decisions that could determine the fate of some of Europe’s biggest industrial firms and hundreds of thousands of jobs.

The fuel is a crucial part of Germany’s energy mix and more difficult to replace than Russian coal and oil, which are being phased out by the end of the year. Some 15% of Germany’s electricity is generated from gas — compared with less than 9% in 2000, as the country winds down its use of coal and nuclear power.

But more importantly, gas is critical for heating homes and for industrial processes in the chemicals, pharmaceuticals and metals sectors. It’s also widely used in the ovens of German bakers and for making glass.

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