Annabell Lackner, Grade 12
UWCEA Arusha Campus
The Russian invasion in Ukraine has disrupted economic patterns all over the world and affects millions of people. Austria, the small republic in the European Alps, is challenged by the cuts in gas imports from Russia, which make experts worry about the resource availability in the coming winter.
Austria, with its just below 9 million inhabitants, had historically great dependency on Russian oil and gas imports. Even after the invasion of the peninsula, Crimea did economists gratefully welcome Vladimir Putin in the capital, actively overseeing the precarious situation that the Russian president had just caused. Why? Surely it did not result in anything more than a demonstration of the alarmingly close relation between the government and Russia. According
to Walter Iber, in an interview with the newspaper “Der Standard” in March 2022, the dependence on Russia is rooted in the times of Soviet occupation. This is because the Soviet mineral oil administration is the predecessor of Austria's biggest oil company, OMV. It was convenient, the expert explains, convenient to have a pipeline just at hand leading all the way to the bordering iron curtain.
Nevertheless, their supposed “friendship” did not save them from the effects of the EU-wide sanctions on Russia, which led to a gradually mounting energy crisis. As gas imports from the superpower are dramatically decreasing, the situation is getting tighter. Additionally, a major pipeline named Nord Stream 1 has recently been closed for a 10-days maintenance. Although politicians all over the European continent doubted that the Russians would reopen the supply
after the predicted ten days, their skepticism was unjustified as of today. Like agreed, the gas is flowing again.
Even though this is an enormous relief, 1 million households in the small republic still depend on the resource for heating and face record prices. For instance, while energy prices are generally increasing, gas has seen a massive dearness with a predicted rise of 20-30%, according to the energy control authority e-control. According to the newspaper “Kleine Zeitung”, one major supplier, Montana, even wants to raise prices by 67%. At the moment, this is still an exception,
but energy-expert Dorothea Herzele fears that other companies might soon follow the example.
What that means for the coming winter and the future of many Austrians is still uncertain, but the fact is that rationing will be necessary. Without any doubt, an over-dependency has built up over decades and the population now has to suffer the consequences of corruption and state- capture through the powerful oil industry.
When gas is becoming scarce, the demand for substitutes rises. Given the natural abundance of wood in Austria, a fresh wave of hoarding has just started. The German “Frankfurter Allgemeine” darkens the promising hopes, as they explain that the wood would have to dry for two years before actually being useful. This raises the question of how else one million citizens will survive the winter. Supply bottlenecks in oil, pellets and in winter district heating and
renewables, the options seem limited. The Austrian government seems to have found a solution with thermal heat pumps as it strokes publicity campaigns for the eco-friendly alternative. Under the motto “away from oil and gas” ten million euros have been guaranteed until 2030 to subsidize the energy revolution. While this facilitates a transition on the grand scale, it cannot take away the economic and political pressure on the country. Further developments in both the
war and the EU’s response to it will soon reveal the true extent of the crisis.
Sources:
“Die Meisten Im Osten: Eine Million Haushalte in Österreich Heizen Mit Gas | Kleine Zeitung.”
Www.kleinezeitung.at, 21 July 2022, www.kleinezeitung.at/oesterreich/6168034/Die-
meisten-im-Osten_Eine-Million-Haushalte-in-Oesterreich-heizen. Accessed 21 July
2022.
“Gasknappheit: Plus 67 Prozent: Erster Anbieter in Österreich Erhöht Gaspreis | Kleine
Zeitung.” Www.kleinezeitung.at, 24 Sept. 2021,
www.kleinezeitung.at/wirtschaft/6038391/Gasknappheit_Plus-67-Prozent_Erster-
Anbieter-in-Oesterreich. Accessed 21 July 2022.
Marchard, Jan Michael, and Günther Strobl. “Österreichs Fatale Abhängigkeit von Russischem
Gas.” DER STANDARD, 13 Mar. 2022,
www.derstandard.at/story/2000134040535/oesterreichs-fatale-abhaengigkeit-von-
russischem-gas. Accessed 21 July 2022.
Seiser, Michaela. “Energiekrise: Österreicher Hamstern Brennholz.” FAZ.NET, 18 July 2022,
www.faz.net/aktuell/wirtschaft/unternehmen/energiekrise-laesst-menschen-in-
oesterreich-brennholz-hamstern-18179693.html. Accessed 21 July 2022.
Image Courtesy: https://image.kurier.at/images/cfs_landscape_1864w_1049h/6770854/20220308ABD009511.jpg
Austria, with its just below 9 million inhabitants, had historically great dependency on Russian oil and gas imports. Even after the invasion of the peninsula, Crimea did economists gratefully welcome Vladimir Putin in the capital, actively overseeing the precarious situation that the Russian president had just caused. Why? Surely it did not result in anything more than a demonstration of the alarmingly close relation between the government and Russia. According
to Walter Iber, in an interview with the newspaper “Der Standard” in March 2022, the dependence on Russia is rooted in the times of Soviet occupation. This is because the Soviet mineral oil administration is the predecessor of Austria's biggest oil company, OMV. It was convenient, the expert explains, convenient to have a pipeline just at hand leading all the way to the bordering iron curtain.
Nevertheless, their supposed “friendship” did not save them from the effects of the EU-wide sanctions on Russia, which led to a gradually mounting energy crisis. As gas imports from the superpower are dramatically decreasing, the situation is getting tighter. Additionally, a major pipeline named Nord Stream 1 has recently been closed for a 10-days maintenance. Although politicians all over the European continent doubted that the Russians would reopen the supply
after the predicted ten days, their skepticism was unjustified as of today. Like agreed, the gas is flowing again.
Even though this is an enormous relief, 1 million households in the small republic still depend on the resource for heating and face record prices. For instance, while energy prices are generally increasing, gas has seen a massive dearness with a predicted rise of 20-30%, according to the energy control authority e-control. According to the newspaper “Kleine Zeitung”, one major supplier, Montana, even wants to raise prices by 67%. At the moment, this is still an exception,
but energy-expert Dorothea Herzele fears that other companies might soon follow the example.
What that means for the coming winter and the future of many Austrians is still uncertain, but the fact is that rationing will be necessary. Without any doubt, an over-dependency has built up over decades and the population now has to suffer the consequences of corruption and state- capture through the powerful oil industry.
When gas is becoming scarce, the demand for substitutes rises. Given the natural abundance of wood in Austria, a fresh wave of hoarding has just started. The German “Frankfurter Allgemeine” darkens the promising hopes, as they explain that the wood would have to dry for two years before actually being useful. This raises the question of how else one million citizens will survive the winter. Supply bottlenecks in oil, pellets and in winter district heating and
renewables, the options seem limited. The Austrian government seems to have found a solution with thermal heat pumps as it strokes publicity campaigns for the eco-friendly alternative. Under the motto “away from oil and gas” ten million euros have been guaranteed until 2030 to subsidize the energy revolution. While this facilitates a transition on the grand scale, it cannot take away the economic and political pressure on the country. Further developments in both the
war and the EU’s response to it will soon reveal the true extent of the crisis.
Sources:
“Die Meisten Im Osten: Eine Million Haushalte in Österreich Heizen Mit Gas | Kleine Zeitung.”
Www.kleinezeitung.at, 21 July 2022, www.kleinezeitung.at/oesterreich/6168034/Die-
meisten-im-Osten_Eine-Million-Haushalte-in-Oesterreich-heizen. Accessed 21 July
2022.
“Gasknappheit: Plus 67 Prozent: Erster Anbieter in Österreich Erhöht Gaspreis | Kleine
Zeitung.” Www.kleinezeitung.at, 24 Sept. 2021,
www.kleinezeitung.at/wirtschaft/6038391/Gasknappheit_Plus-67-Prozent_Erster-
Anbieter-in-Oesterreich. Accessed 21 July 2022.
Marchard, Jan Michael, and Günther Strobl. “Österreichs Fatale Abhängigkeit von Russischem
Gas.” DER STANDARD, 13 Mar. 2022,
www.derstandard.at/story/2000134040535/oesterreichs-fatale-abhaengigkeit-von-
russischem-gas. Accessed 21 July 2022.
Seiser, Michaela. “Energiekrise: Österreicher Hamstern Brennholz.” FAZ.NET, 18 July 2022,
www.faz.net/aktuell/wirtschaft/unternehmen/energiekrise-laesst-menschen-in-
oesterreich-brennholz-hamstern-18179693.html. Accessed 21 July 2022.
Image Courtesy: https://image.kurier.at/images/cfs_landscape_1864w_1049h/6770854/20220308ABD009511.jpg
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