While all of Europe is trying to get away from Russian gas and oil, Norway steps in and fills up the storage facilities - at record prices. No exceptions are made for allies like Poland either. If you don't have long-term supply contracts, you pay a decent price for Scandinavian gas.
100 days before the start of the heating period, German politicians are already sounding the alarm: the coming winter will be tough. For a few weeks now, Russia has been supplying only a fraction of the gas volume that was previously usual via Nord Stream 1. Due to alleged maintenance work, no gas is currently flowing through the Russian pipeline at all. But thanks to the Norwegians, Germany will most likely not freeze in winter after all.
Things are different in Poland. Germany's neighbor said goodbye to Russian gas immediately after the start of the war in Ukraine. The government in Warsaw quickly took measures to secure the gas supply. A pipeline to Scandinavia was already nearing completion - a realistic alternative to Russian gas.
But now Poland is empty-handed. While the pipeline was being completed, the government failed to sign long-term supply deals. Now Poland has to fill the pipeline with expensive gas from Norway in the short term. Because the Scandinavians only sell the raw material at the current market price - the price that everyone else has to pay.
The government in Warsaw is correspondingly outraged: "Should we pay Norway 110 euros per megawatt hour for gas? Four or five times more than a year ago? That's sick," Polish Prime Minister Mateusz Morawiecki recently complained. The price of gas is now much higher. Energy expert Malte Küper is also surprised that Poland has not yet reached an agreement with Norway on long-term contracts for the Baltic Pipe. Because the planning and construction of the pipeline has been in full swing for several years, he says in an interview with ntv.de. The fact that it is now more expensive in the short term to buy the quantities on the European spot market EEX is a normal process that reflects the current shortage on the markets.
Germany could also feel the bill. Norway is now Germany's largest gas supplier. Around 1,300 gigawatt hours of natural gas are delivered daily via the two Europipe pipelines. However, the situation in Poland cannot be compared to that in Germany, says Küper. Because Germany has had long-term supply contracts with Norway for years. "Import contracts were sometimes concluded for 20 years or more in order to give both producers and buyers security. These prices are much more stable than on the spot markets," says the energy officer at the German Economic Institute (IW) in Cologne .
However, this does not apply to the additional delivery volumes that had to be procured on the spot markets in recent months to replace Russian gas. In the meantime, a megawatt hour costs more than 200 euros.
Not bad for Norway's cash register. Bad for Poland and Germany. The Norwegian Ministry of Energy gives legal reasons for the high prices: "The gas producers in Norway are obliged to sell the fuel at market conditions. Whether and how much gas flows out of Norway depends on the economic and market conditions," said Margrete Løbben Hanssen from the Norwegian Ministry of Energy, the Polish edition of "Newsweek". Norway will not cut supplies to other customers and will give preferential treatment to Poland, she added. Additional discounts for the country are also not an option.
The Scandinavian country lives largely from its gas and oil production. Gas and oil account for 14 percent of Norway's GDP and a whopping 40 percent of exports. And that will probably reach a record level this year: Already in March, exports of oil and natural gas climbed to record highs totaling 13.7 billion euros in just one month.
With this money, the Norwegians secure their future. Norway's sovereign wealth fund is world-renowned and seen as a best-practice example for oil and gas states investing their current wealth for future generations. Income from the commodity sector is invested in this fund - it holds stakes in more than 9300 companies worldwide. In mid-2021, the fund was worth 12.3 trillion Norwegian kroner (1.7 trillion euros).
But even though gas prices are currently at record highs and Norwegian gas and oil companies are pumping as much as never before, the fund has suffered massive losses this summer. The weakening stock markets are hitting the sovereign wealth fund hard. In mid-2022, the value was just 11.7 trillion Norwegian kroner (1.6 trillion euros).
Norwegians know that a major source of income will soon disappear. The world is trying to get off fossil fuels as quickly as possible. This is slower than necessary to achieve the 1.5 degree target set at the Paris climate summit. Yet the world is in the process of moving away from oil, gas and coal. And now the Scandinavian country has a second chance to take advantage of the last mile of the fossil age.
