For many years, crude oil piped in from Russia has flowed into a large refinery in Schwedt, an industrial metropolis on the banks of the Oder River in Germany, offering jobs for hundreds of staff and a dependable supply of gasoline, jet gasoline and heating oil for residents of Berlin.
Now, as European Union member states battle to agree on the phrases of an oil embargo to punish Moscow for its invasion of Ukraine, the Schwedt refinery has grow to be the main stumbling block in Germany’s effort to sever its reliance on Russian oil. The prospect has raised alarm among the many refinery’s 1,200 workers.
Germany depends on Russia for a couple of third of its oil, and Robert Habeck, the financial system minister and vice chancellor, has spent weeks getting ready for an embargo, jetting from the United Arab Emirates to Washington to Warsaw to line up various sources of crude.
“The final third is the issue,” Mr. Habeck mentioned in a video aimed toward explaining the state of affairs to Germans. And most of that Russian oil comes by means of the refinery in Schwedt.
The refinery is a looming image of how deeply Germany’s oil and gasoline wants are tied to its big power exporter to the east. The PCK refinery — the title is a nod to its East German roots because the state-owned “Petrolchemisches Kombinat,” or Petrochemical Mix — is owned by Rosneft, the Russian state-owned oil firm. It's linked to the Soviet-era Druzhba pipeline, one of many world’s longest, bringing oil from Siberian wells to Western Europe.
And it stays a necessary a part of Germany’s power wants, producing fuels for Berlin — Germany’s largest metropolis — and close by areas, together with elements of Poland. Sourcing sufficient oil to switch the 12 million tons of crude processed every year in Schwedt — by way of German and Polish ports to the north — is just one piece of the puzzle, as a result of Rosneft has informed German officers it has no real interest in working the refinery utilizing non-Russian oil.
To handle that drawback, Germany’s Parliament permitted a regulation final week that might make it simpler for the federal government to grab important infrastructure below overseas possession to forestall a nationwide emergency. Ought to the oil embargo undergo, German officers mentioned the brand new regulation would permit Berlin to make sure an enough provide of oil merchandise till one other firm might be discovered to amass Rosneft’s stake.
Shell, Europe’s largest power firm, which holds a 37.5 p.c stake in PCK, mentioned lately that it will assist the refinery, “even at the price of financial losses as a way to preserve provides to the area.” Final 12 months, Shell sought to promote its stake within the refinery and Rosneft moved to amass it, however Germany’s financial system ministry, which weighs political and strategic points of overseas investments, has but to approve it.
One other power agency, Alcmene, a part of the privately owned British power holding firm Liwathon Group, has expressed curiosity in investing in Schwedt. “We might be capable of ship safety of provide and full utilization of the PCK refinery by means of German ports” with out authorities subsidies, Alcmene mentioned in an emailed assertion.
Chancellor Olaf Scholz has made clear that he was conscious of considerations surrounding the refinery, and thought of guaranteeing its future a precedence.
“We're trying very intently at how this could truly work out,” he informed a latest assembly of his social gathering within the state of Brandenburg. “We’re additionally going to guarantee that workers aren’t left on their very own.”
Fears that layoffs might be across the nook drew lots of of staff, many dressed within the PCK’s official fluorescent orange and forest inexperienced colours, to the corporate canteen earlier this month for a town-hall assembly with Mr. Habeck.
Like different areas of the previous East Germany, Schwedt skilled widespread job losses after the collapse of communism. Recollections of 25 p.c unemployment nonetheless hang-out the area.
As well as, the refinery is not only a supply of oil and revenue, additionally it is the core of town’s id. Flattened by the Soviet Union on the finish of World Warfare II, the arrival of the oil pipeline — its title, Druzhba, means friendship in Russian — and refinery within the late Sixties drew hundreds of staff and their households, lured by safe jobs. PCK’s slogan is: “We transfer Berlin and Brandenburg!”
Immediately, roughly a tenth of town’s 30,000 inhabitants maintain safe union jobs on the refinery and in supporting industries. Many staff used the assembly with Mr. Habeck to query the federal government’s method.
“Why ought to we take a enterprise accomplice that for many years has been dependable and at all times delivered, and slap them with an embargo?” mentioned one man who recognized himself as having labored on the refinery for 27 years.
“My want would truly be to maintain the Druzhba pipeline out of the embargo completely,” mentioned one other worker, who recognized herself because the mom of three younger kids. “There isn't any various that's worthwhile.”
Reporters had been requested to not establish the workers who spoke through the occasion, to guard their privateness.
Mr. Habeck tried to guarantee the group that the refinery would preserve working. “If the whole lot features as it will on paper,” crude from Norway or the Center East might be shipped from the ports of Rostock and Gdansk, Poland, each linked to the refinery by pipelines.
On the similar time, he acknowledged, there have been a number of factors within the course of the place it might hit a snag.
The PCK facility, like different refineries, is engineered to course of the actual sort of crude oil arriving from Russia. Crude coming in from different international locations must be blended with oil held in reserve tanks on Germany’s northwestern coast to create an acceptable mix.
Getting that reserve oil to the pipeline in Rostock would require a seven-day journey by sea, as a result of no pipelines cross the previous boundary that divided East and West Germany, and the nation’s principal railway cargo operator has nearly no oil automobiles.
One other potential complication: The Polish authorities is refusing to work with Russian entities, and it has informed German officers that so long as Rosneft holds an curiosity within the refinery, no oil will probably be arriving from Gdansk.
“We are able to’t be utterly certain about something that we're doing,” Mr. Habeck informed the refinery workers. “However not less than it has been completely mentioned and thought by means of.”
Finally, Mr. Habeck and native officers wish to see the refinery abandon fossil fuels and deal with processing renewable power. Lately, PCK has invested in creating artificial gasoline with a deal with hydrogen. Verbio, an organization producing ethanol from native sources, has been working on the location of the refinery, feeding bioenergy into town’s heating system.
Officers in Berlin confused the financial enchantment of the encompassing area, pointing to the newly accomplished Tesla meeting plant and Intel’s announcement of a $19 billion chip-making facility. Each firms had been drawn by an abundance of renewable power, mentioned Carsten Schneider, Chancellor Scholz’s liaison for jap Germany, who additionally spoke to the Schwedt residents.
“I assured them that the German authorities wouldn't simply abandon them, however would make an effort, each for a short-term resolution of securing oil from some other place and for the long-term restructuring towards manufacturing of regenerative power,” he mentioned.
The town’s mayor, Annekathrin Hoppe, mentioned she wish to arrange a campus for start-ups, incubators and different power innovators close to the refinery to advertise the transition to inexperienced power manufacturing. However, she mentioned, that might require “sums within the thousands and thousands or billions.”
Regardless of all the eye that politicians from Berlin have showered on her metropolis, she mentioned she had but to see a timeline or any concrete assurances that folks would be capable of preserve their jobs, or any pledges of economic help.
“It was an excellent begin,” she mentioned of the previous weeks’ flurry of visits. “Nevertheless it was solely a begin.”