Dependence management. The background of the German gas policy. OSW REPORT August 2016

Natural gas, after crude oil, is the most important energy carrier in the German economy. Over the past twenty years, natural gas has been the only conventional energy carrier to have increased its share in the German energy basket. According to consumption forecasts, its share in energy consumption, albeit not consumption volume, will grow in the future. Being a clean fuel which can be used in all areas of the energy sector, from heating, through electricity production to transport, natural gas will play the role of a transition fuel in the process of energy transformation. In this report the author discussed the internal and external background to German policy in the gas sector. The first chapter outlines the role of natural gas in the German economy in connection with the implementation of the energy transformation strategy, together with its impact on German industry. The second part discusses relations with gas suppliers to Germany. The greater part of this chapter is devoted to Russia, which has been the largest gas exporter to Germany since the mid 1980s, and has additionally strengthened its position in connection with the Nord Stream gas pipeline project. The last chapter discusses alternative sources of gas supplies to Germany: building an LNG terminal, shale gas extraction and the opportunities for using biogas and the innovative power-to-gas technology