For decades, crude oil from Russia has flowed into a giant refinery in Schwedt, an industrial city on the Oder River in Germany, providing jobs for thousands of workers and a reliable source of gasoline, fuel for aircraft. and diesel for heating. Berlin residents.
Now, as EU member states struggle to agree on the terms of the oil embargo to punish Moscow for its invasion of Ukraine, the Schwedt refinery has become the main obstacle in the effort. Germany to cut its dependence on Russian oil. The outlook has raised alarm among the refinery’s 1,200 employees.
Germany depends on Russia for about a third of its oil, and Robert Habeck, economy minister and vice chancellor, has spent weeks preparing for a embargo, from the United Arab Emirates to Washington to Warsaw to align alternative sources of crude oil.
“The last third is the problem,” Mr. Habeck in a video intended to explain the situation to the Germans. And most of that Russian oil goes through the Schwedt refinery.
The refinery is an imminent symbol of the extent to which Germany’s oil and gas needs are tied to its energy export giant in the east. The PCK refinery, the name is a glimpse into its roots in East Germany as the state-owned “Petrolchemisches Kombinat” or Petrochemical Combine, is owned by Rosneft, the Russian state oil company. . It is connected to the Soviet-era Druzhba gas pipeline, one of the longest in the world, which carries oil from Siberian wells to Western Europe.
And it remains an essential part of Germany’s energy needs, producing fuel for Berlin – Germany’s largest city – and nearby areas, including parts of Poland. Getting enough oil to replace the 12 million tonnes of crude oil processed each year in Schwedt, through German and Polish ports in the north, is just one piece of the puzzle, because Rosneft has told German officials it has no interest in operating the refinery with -Russian oil.
Rosneft, the Russian state-owned oil company that operates the refinery, has told German officials it has no interest in managing it with non-Russian oil. Credit … Filip Singer / EPA, via Shutterstock
To address this issue, the German Parliament last week passed a law that would make it easier for the government to seize essential infrastructure under foreign ownership to prevent a national emergency. If the oil embargo passes, German officials said the new law would allow Berlin to ensure an adequate supply of oil products until another company is found to acquire Rosneft’s stake.
Shell, the largest energy company in Europe, which has a 37.5% stake in PCK, recently said it would support the refinery, “even at the expense of economic losses to maintain supply in the region.” . Last year, Shell tried to sell its stake in the refinery and Rosneft moved to buy it, but the German economy ministry, which is weighing the political and strategic aspects of foreign investment, has not yet done so. approved.
Another energy company, Alcmene, part of the privately owned British energy holding company Liwathon Group, has expressed interest in investing in Schwedt. “We could offer security in the supply and full use of the PCK refinery through German ports” without government subsidies, Alcmene said in an emailed statement.
Like other regions of the former East Germany, Schwedt experienced a widespread job loss after the collapse of communism. Credit … Katrin Streicher for The New York Times
Chancellor Olaf Scholz has made it clear that he is aware of the concerns surrounding the refinery and considers guaranteeing its future a priority.
“We are looking very closely at how this can work,” he said at a recent meeting of his party in the state of Brandenburg. “We will also make sure that employees are not left alone.”
Fears that layoffs could be around the corner attracted hundreds of workers, many dressed in the official colors of fluorescent orange and forest green from the PCK, to the company’s dining room earlier this month for a meeting. of the city council with Mr. Habeck.
Like other regions of the former East Germany, Schwedt experienced widespread job losses after the collapse of communism. Memories of 25 percent unemployment still haunt the region.
In addition, the refinery is not only a source of oil and revenue, it is also the core of the city’s identity. Flattened by the Soviet Union at the end of World War II, the arrival of the pipeline — its name, Druzhba, means friendship in Russian — and the refinery in the late 1960s attracted thousands of workers and their families. attracted to safe jobs. The PCK slogan is: “Let’s move Berlin and Brandenburg!”
Today, about one-tenth of the city’s 30,000 people have secure union jobs in the refinery and support industries. Many workers took advantage of the meeting with Mr. Habeck to question the government’s approach.
Robert Habeck, Germany’s economy minister and vice chancellor, recently met with hundreds of PCK workers who feared layoffs. Credit … Jens Schlueter / Agence France-Presse – Getty Images
“Why should we take a business partner who has been reliable and always delivered for decades, and slap him with a lien?” said a man who identified himself as having worked at the refinery for 27 years.
“My wish would be to keep the Druzhba pipeline completely out of the embargo,” said another employee, who identified herself as the mother of three young children. “There is no cost-effective alternative.”
Journalists were asked not to identify the employees who spoke during the event, to protect their privacy.
Mr. Habeck tried to assure the crowd that the refinery would continue to operate. “If everything works as it would on paper,” Norwegian or Middle Eastern crude could be shipped from the ports of Rostock and Gdansk, Poland, both connected to the pipeline refinery.
At the same time, he acknowledged, there were several points in the process where he could run into a problem.
The PCK facility, like other refineries, is designed to process the particular type of crude oil coming from Russia. Crude oil coming from other countries should be mixed with oil stored in reserve tanks on the northwest coast of Germany to create a suitable mixture.
Bringing this reserve oil to the Rostock pipeline would require a seven-day voyage by sea, because no pipeline crosses the old boundary that divided East and West Germany, and the country’s main rail freight operator is almost non-existent. he has oil cars.
Another potential complication: the Polish government refuses to work with Russian entities and has told German officials that as long as Rosneft has an interest in the refinery, no oil will arrive from Gdansk.
Residential buildings on one of Schwedt’s main streets. The refinery remains an essential part of Germany’s energy needs. Credit … Katrin Streicher for The New York Times
“We can’t be completely sure of anything we’re doing,” Mr. Habeck to refinery employees. “But at least it’s been discussed and thought through.”
Ultimately, Mr. Habeck and local officials would like to see the refinery abandon fossil fuels and focus on renewable energy processing. In recent years, PCK has invested in the development of hydrogen-centric synthetic fuel. Verbio, a local ethanol-producing company, has been operating at the refinery site, supplying bioenergy to the city’s heating system.
Berlin officials highlighted the economic appeal of the surrounding region, noting the newly completed Tesla assembly plant and Intel’s announcement of a $ 19 billion chip-making facility. Both companies were drawn to the abundance of renewable energy, said Carsten Schneider, Chancellor Scholz’s liaison for East Germany, who also spoke with Schwedt residents.
“I assured them that the German government would not only abandon them, but make an effort, both for a short-term solution to secure oil elsewhere and for a long-term restructuring towards the production of regenerative energy, ”he said.
City Mayor Annekathrin Hoppe said she would like to establish a campus for emerging companies, incubators and other energy innovators near the refinery to promote the transition to green energy production. But, he said, that would require “sums of millions or billions.”
Annekathrin Hoppe, the mayor of Schwedt, said she had not yet received any concrete guarantees from German officials that residents could keep their jobs. Credit … Katrin Streicher for The New York Times
Despite all the attention that politicians in Berlin have paid to his city, he said he had not yet seen a timetable or any concrete guarantee that people could keep their jobs or any promises of financial aid.
“It was a good start,” he said, referring to the burst of visits in recent weeks. “But it was just the beginning.”