Germany announces measures to save Russian gas 1:07
Berlin/London (CNN Business) --
Europe's largest economy is officially running out of natural gas and is stepping up a crisis plan to preserve supplies for winter as Russia turns off the taps.
Germany activated the second phase of its three-stage emergency gas program on Thursday, moving a step closer to rationing supplies to industry, a step that would deal a major blow to the manufacturing heart of its economy.
"From now on, gas is scarce in Germany," Economy Minister Robert Habeck told a news conference in Berlin.
"Although it is not yet noticeable: We are in a gas crisis".
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Europe's energy crisis deepened this month when Russia further cut supplies to Germany, Italy and other members of the European Union.
Last week, Russia's state gas company Gazprom cut flow from the Nord Stream 1 pipeline to Germany by 60%, blaming the move on the West's decision to withhold vital turbines because of sanctions.
Italian energy giant ENI said Gazprom was cutting its supplies by 15%.
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Twelve EU countries have so far been affected by Russian gas supply cuts, the bloc's climate policy chief Frans Timmermans said on Thursday.
"Russia has weaponized energy, and in recent days we have seen new gas cuts announced. This is all part of Russia's strategy to undermine our unity," Timmermans told EU lawmakers.
"So the risk of complete gas disruption is now more real than ever," he stressed.
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Economic confrontation with Russia
Habeck called on Germans to cut back on their consumption as part of a national effort to prepare for the "coming winter months."
The German government's decision to raise the "alarm" level is due to the cuts in Russian deliveries made since June 14 and the continued high price of gas on the market, he added.
Natural gas futures prices in Europe have soared nearly 60% since the middle of this month to trade around 133 euros ($140) per megawatt hour (MWh), levels last seen in March, according to data from the Intercontinental Exchange.
Habeck said that although Germany's gas storage facilities are 58% full — more than this time last year — the goal of reaching 90% by December cannot be reached without further action.
"We are in an economic confrontation with Russia," Habeck said.
Gazprom's recent reduction in gas flows comes after it had already cut supplies to Poland, Bulgaria and Finland, and to energy companies in Denmark, Germany and the Netherlands, for their refusal to comply with the Kremlin's demand that they are paid in rubles.
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Germany, Austria and other EU countries are turning to coal and oil-fired power plants so they can divert more gas to storage to heat homes in the winter.
Europe has tried to reduce its dependence on Russian natural gas since the invasion of Ukraine in late February.
Germany has managed to reduce Moscow's share of its imports to 35% from 55% before the start of the war.
But their chances of finding alternative supplies took a hit last week when one of the top US liquefied natural gas producers said its Texas facility would shut down completely for 90 days after a fire.
Freeport LNG has produced about a fifth of US LNG exports so far this year, according to analysis firm Vortexa.
Germany activated the first "early warning" phase of its emergency energy program in March.
The "alarm" phase declared on Thursday would be followed by an "emergency" if the situation deteriorates further.
In that state of high alert, regulators can ration gas to maintain supply to "protected customers" such as homes and hospitals.
Industrial users would be the first to suffer outages.
Anna Cooban, Sharon Braithwaite, and James Frater contributed to this article.
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