German states sound alarm: press government on gas storage strategy

Europe ended last winter with unusually low levels of gas in underground storage. At the end of March, storage facilities across Europe were on average just 30% full, similar to the critical years of 2021 and 2022. The ongoing conflict in the Middle East is also raising questions about the availability of gas to fill storage facilities over the summer. German states are therefore pressing the federal government to quickly come up with a strategy for filling storage facilities and are also supporting the establishment of a strategic reserve.

The security of natural gas supplies has become an increasingly prominent issue in Europe in recent years. After most Russian supplies were cut off following the outbreak of the war in Ukraine, Europe began focusing more on the global liquefied natural gas (LNG) market. However, the global gas market may not be 100% reliable either, as the ongoing war in Iran and the resulting disruption to LNG supplies from the Persian Gulf region have shown.

The loss of a fifth of global LNG supplies, traditionally delivered to the market from Qatar and the United Arab Emirates, is all the more significant given the low levels of gas in underground storage facilities in Europe. Although storage facilities have been slowly filling since the beginning of April, the low starting level is expected to put strong pressure on the market over the summer.

The situation is even more critical in Germany, where storage facilities are less than 30% full. Germany’s Bundesrat has therefore adopted a new resolution, according to Clean Energy Wire, warning that current storage levels are significantly lower than in previous years and could become the energy sector’s “Achilles’ heel” during the next heating season.

"A sharp cold spell or supply shortages this coming winter could lead to supply problems and trigger price shocks, putting both households and manufacturing businesses in a difficult position," the states warned, according to the news service. They called on the federal government to “draw up a strategy without delay” to achieve a secure level of gas stocks and “avert the risk of a significant increase in prices”.

State representatives also backed calls from industry for the creation of a strategic gas reserve. It should be used strictly to ensure gas supplies in an emergency and should be separate from the German gas market.