The Market Will Sort It Out – or Maybe Not!

I. The Rented Cellar

In the old days people laid in coal and potatoes in the cellar every autumn. Anyone who had a cellar and left it empty was thought reckless, for winter comes every year. Germany has a very large cellar for its gas reserves, the largest storage capacity in the European Union. On 1 October 2026 it was 58 percent full. A year earlier it was 76 percent, two years earlier 96. On average across the EU, storage stood at 71.5 percent at the end of September, also lower than ever since records began in 2011. Germany lies far below even that.

The strange thing is this: the cellar is not empty because no one wanted to rent it. In mid-September 83.5 percent of storage space was booked. 55 percent was filled. The tenants pay for the cellar and leave it empty.

II. Before the War

One could blame the war. Since February 2026 the Strait of Hormuz, through which about a fifth of the world’s traded liquefied natural gas passes, has been largely blocked. Qatar’s export plant at Ras Laffan was damaged in March, and at the end of September Qatar extended its supply outages into November. Whatever LNG remains, Asia buys at higher prices. In July the USA for the first time delivered more LNG to China, Japan, Korea, Taiwan and India than to Europe. In “The Plougher” we described how this war began.

But the problem is older. As early as January 2026, before the first shot, German storage was only about 40 percent full, and the largest site, Rehden in Lower Saxony, eleven percent. A board member of the Oldenburg utility EWE said at the time: “The instruments don’t work. We pointed that out last year.” The war widened a hole that was already there.

III. Why the Market Does Not Lay In Stores

A trader fills storage for one reason only: he buys cheap in summer and sells dear in winter. As long as Russia delivered reliably and cheaply, this calculation almost always worked. With LNG from the world market it often no longer does. This summer gas was dearer than traders expected it to be in winter. Whoever had stored would have lost money. So no one stored. From the point of view of the individual trader, that is reasonable.

The president of the Federal Network Agency, Klaus Müller, considers supply secure. He rejects state intervention and sees the traders as responsible for supplying their customers. But the rules oblige them to too little. In April 2025 the federal government lowered the filling targets: for 1 November from 90 to 80 percent, for six sites that are hard to fill, Rehden among them, to 45 percent, and for 1 February to 30 percent. There are no effective penalties for missing them. For five sites, according to an analysis by market observers, not even filling every rented cubic metre would be enough to reach the target.

IV. The Empty State Storage

This shows most clearly at Rehden. The site belongs to SEFE, Gazprom’s former German subsidiary, which the federal government took over in 2022. The country’s largest gas storage is thus in state hands. In September 2025 it was 27 percent full, in September 2026 about nine. As late as the end of August SEFE auctioned storage space at Rehden as mere options, without any obligation actually to inject gas.

The state thus held the lever in its hand, and it behaved like a trader. That is the real point of this story. The market did not fail. The market did exactly what it is there for: it calculated. What failed was the notion that in doing so it would also provide for emergencies of its own accord.

V. How the Neighbours Do It

Other countries face the same calculation and solve it differently. France obliges its suppliers to fill storage and penalises violations. Italy auctioned storage volumes with a guaranteed price spread early in the summer, so traders knew that storing would pay. In the Netherlands the state gas company EBN fills storage itself. Austria, Poland and Spain hold a strategic reserve that serves not trade but emergencies. Italy, Poland and Portugal were above 80 percent in mid-September.

These are not planned economies. They are markets with a rule that tells the market what it will not do by itself.

VI. What the Winter May Bring

Physically it will probably be enough. Norway delivers reliably through its pipelines, and Germany’s LNG terminals are only about half utilised. By mid-September more gas was already in storage than was withdrawn during the whole of last winter. In a normal or mild winter Germany will get through, with almost empty storage in spring. Then the game begins again, and filling for the winter of 2027/28 will be expensive.

The risk is a long, cold winter, when frost returns in February and March. Then every country in Europe draws on its storage at the same time, and every LNG cargo has to be bid for against Asia. That does not mean homes will go cold. Households are protected. It means high prices and, in the extreme case, cuts for industry. LNG in Europe already costs as much as it has not since the end of 2022.

VII. The Fire Brigade

No one would think of leaving the fire brigade to the market and paying for it only when something is burning. A fire brigade must stand ready, even in the years when nothing happens, and precisely then it seems superfluous. Gas storage is such a fire brigade. It is insurance against the rare, hard winter. Insurance against rare events does not pay for the individual in most years. That is why the market buys too little of it, and that is why it is prescribed.

In “The Lever in the Carport” we praised an authority that acted “more cleverly than correctly”. Here it is the other way round. The rules are correct, the traders act correctly, the state company acts correctly. Clever it is not. Responsibility is spread across many, no one is obliged, and in the end the risk is borne by those who were not asked: households through the price, industry through its production.

VIII. How This Essay Could Be Refuted

The first objection: the Federal Network Agency says supply is secure. If the winter passes without a shortage, the market was right. But insurance is not refuted by a year in which nothing burned.

The second objection: state filling is expensive. In 2022 storage had to be filled in an emergency at a cost of billions. That was paid for through a levy on every kilowatt hour, which the federal government has taken over from its budget since January 2026. That is true. But the question is not whether precaution costs something, but whether one pays for it predictably in summer or in an emergency in winter.

The essay would be refuted if Germany, relying on the market, were supplied over several winters just as securely and just as cheaply as the neighbours who prescribe their storage.

IX. Joseph’s Counsel

Joseph interpreted Pharaoh’s dream of the seven fat and the seven lean cows and advised him to gather grain in the good years. He did not propose leaving it to the grain traders whether storing would pay. The market will sort it out – or maybe not. For the “maybe not” there are rules, and there are countries that have them.

If no one is obliged to fill the cellar: who pays when the winter lasts longer than the market calculated?