Does Germany still need oil?

Economist meets Photographer / #38

P: Good morning, Economist.

E: Good morning, Photographer.

P: Last weekend, I passed the largest refinery in eastern Germany.

E: Where is it?

P: Near Schwedt, a town in the state of Brandenburg, in northeastern German.

E: Is it still in operation?

P: It is. The refinery is the most important supplier of petrol, diesel, heating oil and kerosene for the greater Berlin and Brandenburg area and parts of western Poland. The oil and gas used to come mainly from Russia.

E: That's no longer possible, right? Because of the sanctions against Russia.

P: Right. But things are tricky. Until the turn of the year, the refinery was almost exclusively supplied with oil from Russia via the "Druzhba", which means "Friendship", pipeline. However, the federal government had decided that Germany would no longer be allowed to purchase pipeline oil from Russia from January 1, 2023. There are replacement deliveries via an oil pipeline leading from Rostock to Schwedt. The oil arrives there by ship. But it is said that this can only partially secure the necessary utilization of the refinery.

E: What to do? 

P: Oil has been bought in Kazakhstan. The delicate detail: The oil flows from Kazakhstan to Russia and from there via the northern branch of the Druzhba pipeline through Poland to Germany.

E: Phew. 

< silence >

P: Say, Economist, is oil still that important for Germany?

E: Have a look at this chart. Oil consumption is going down fairly steadily. Since Germany also wants to become climate-neutral, the trend will probably continue.

P: What will happen then with the refinery in Schwedt?

E: The refinery is expected to phase out fossil fuels by 2045 and become a "hydrogen hub".

P: Things are changing. 

E: It's always been like that.

P: Have a nice day, Economist. 

E: You too, Photographer. 

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Economist & Photographer sometimes go their own ways – the economist here, the photographer there.

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