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In Bavaria, they are sounding the alarm and preparing for a complete shutdown of production. The capabilities of one of the largest German manufacturers, pride and support of
Milan Nedeljkovic, a member of the BMW Board of Directors, carefully chose the words and expressions to describe the impact of numerous sanctions on the German economy: “Suspension of Russian gas supplies or even a small interruption will lead to a complete stop, not just for BMW, but for the entire German car industry.”
There is logic in the eminent manager’s words, because in 2021 more than half of the energy that the Bavarian plants received came from processing natural gas from Russia. It makes the situation even more exciting and the fact that Russia has not yet started imposing retaliatory sanctions.
Warm “energy” relations between the USSR and Germany began in the 1970s, when the “deal of the century” was literally closed: the Germans provided us with large-diameter pipes and equipment for pumping gas exchange for “blue fuel” from the fields of Western Siberia. For example, gas pipelines were built, which have been transporting essential resources to Europe for fifty years. It would not be an exaggeration to say that the rapid growth of the German economy is directly related to cheap energy sources from the USSR and later from Russia.
However, a new era has arrived and it suddenly seemed to German politicians that cheap gas and oil are not so important. The pipeline can replace LNG terminals and the market will do its job – determine the most attractive price. The first “swallow” was the general refusal of Europeans to long-term contracts for the supply of gas – the “mountain gave birth” to the spot market, where the price is updated every day. As a result, gas has risen in price 8-10 times in the past 12 months, literally razing all the business plans of European industrialists.
After all, natural gas is not just heat and electricity. These are fertilizers, tire industry, chemicals, motor oils and much more. A 10-fold increase in costs – and experienced forecasters only promise an increase in costs, and sometimes again – led to a total recalculation of the cost of the final product. Fewer cars were produced – the cost of each car coming off the assembly line is higher. The higher the price, the less they buy, the less they produce. And so on until the “wire” stops completely and the lock on the gate.
In an interview with Reuters, Mr. Nedelkovich simply called a spade a spade: “Our industry accounts for 37% of total gas consumption in Germany. And when the supply disruptions start, everyone will stand up, not just BMW.”
Optimists and fans of liquefied natural gas, also known as LNG, should carefully consider the liquefaction procedure: up to 30% of natural gas is lost at any one time. And of course the consumer pays for these losses. So, the alternatives to the “pipe”, which can compensate for 100% Russian stocks, have not yet been invented. And they are unlikely to come up in the next 5-10 years.
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Milan Nedeljkovic, a member of the BMW Board of Directors, carefully chose the words and expressions to describe the impact of numerous sanctions on the German economy: “Suspension of Russian gas supplies or even a small interruption will lead to a complete stop, not just for BMW, but for the entire German car industry.”
There is logic in the eminent manager’s words, because in 2021 more than half of the energy that the Bavarian plants received came from processing natural gas from Russia. It makes the situation even more exciting and the fact that Russia has not yet started imposing retaliatory sanctions.
Warm “energy” relations between the USSR and Germany began in the 1970s, when the “deal of the century” was literally closed: the Germans provided us with large-diameter pipes and equipment for pumping gas exchange for “blue fuel” from the fields of Western Siberia. For example, gas pipelines were built, which have been transporting essential resources to Europe for fifty years. It would not be an exaggeration to say that the rapid growth of the German economy is directly related to cheap energy sources from the USSR and later from Russia.
However, a new era has arrived and it suddenly seemed to German politicians that cheap gas and oil are not so important. The pipeline can replace LNG terminals and the market will do its job – determine the most attractive price. The first “swallow” was the general refusal of Europeans to long-term contracts for the supply of gas – the “mountain gave birth” to the spot market, where the price is updated every day. As a result, gas has risen in price 8-10 times in the past 12 months, literally razing all the business plans of European industrialists.
After all, natural gas is not just heat and electricity. These are fertilizers, tire industry, chemicals, motor oils and much more. A 10-fold increase in costs – and experienced forecasters only promise an increase in costs, and sometimes again – led to a total recalculation of the cost of the final product. Fewer cars were produced – the cost of each car coming off the assembly line is higher. The higher the price, the less they buy, the less they produce. And so on until the “wire” stops completely and the lock on the gate.
In an interview with Reuters, Mr. Nedelkovich simply called a spade a spade: “Our industry accounts for 37% of total gas consumption in Germany. And when the supply disruptions start, everyone will stand up, not just BMW.”
Optimists and fans of liquefied natural gas, also known as LNG, should carefully consider the liquefaction procedure: up to 30% of natural gas is lost at any one time. And of course the consumer pays for these losses. So, the alternatives to the “pipe”, which can compensate for 100% Russian stocks, have not yet been invented. And they are unlikely to come up in the next 5-10 years.
SUBSCRIBE FOR EXCLUSIVE CONTENT
PORTAL “AVTOVGLYAD” IN TELEGRAM
Source: Avto Vzglyad
I’m Sandra Torres, a passionate journalist and content creator. My specialty lies in covering the latest gadgets, trends and tech news for Div Bracket. With over 5 years of experience as a professional writer, I have built up an impressive portfolio of published works that showcase my expertise in this field.
