Page:CIA-RDP01-00707R000200110021-0.pdf/15

 APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110021-0

however, and it is not known whether high-temperature brown coal coke production will be continued.

b. Petroleum and natural gas

Petroleum plays an important and rapidly expanding role in the East German economy—providing about 14% of the total energy supply, compared with 3% in 1960 and 8% in 1967. East Germany, in spite of intensive exploration, has not located significant domestic deposits of crude oil. Imports from the Soviet Union provide more than 90% of the total crude oil supply and have increased rapidly, particularly since the completion of the CEMA Friendship pipeline in 1963. A large oil refinery has been built at Schwedt at the western terminus of the pipeline. In 1972 the Schwedt refinery processed 7.5 million tons of crude oil, about 65% of all the crude processed in East Germany. The petroleum processing capacity is to rise to 13 million tons annually by 1975 and 20 million tons in 1980. To handle increased Soviet supplies of crude oil a pipeline paralleling the Friendship line has been recently completed. Additional pipelines connect Schwedt with the chemical processing center of Leuna and with the port of Rostock, where crude oil comes in by tanker.

The regime plans to rely increasingly on petroleum in modernizing the economy—dieselizing the railroads, increasing agricultural mechanization, and providing more central heating for private housing. The U.S.S.R. reportedly plans to supply a total of 64 million metric tons during the 1971-75 plan period, compared with 38 million tons in 1966-70, deliveries exceeded 11 million tons in 1972. In addition, the East Germans imported over 900,000 tons of crude oil from Egypt in 1970 and have imported some from Iran as well (on West German account).

East German production of petroleum products has risen sharply since the late 1950's. Output of all products increased from 3.1 million tons in 1960 to an estimated 10.8 million tons in 1970. The bulk of this increase was in gasoline and diesel fuel production. Almost two-thirds of the total output in 1957 was derived from brown coal, while only one-third came from petroleum; in 1961 these proportions were reversed. Over 90% of the output of petroleum products and synthetic chemicals now comes from crude oil. The major refineries that produce the bulk of petroleum products are located at Schwedt, Leuna, and Boehlen.

A considerable part of the output of petroleum products is exported; exports rose by 87% between 1960 and 1975, but since then have declined by about 20%. The most important exports are gasoline and diesel fuel; substantial amounts of paraffin and fuel oil are also exported. In the early 1960's about 80% of all exports of gasoline and diesel fuel went to West Germany. Following the elimination in 1963 of West German tariff protection and subsidy payments, East German shipments of gasoline and diesel fuel fell off sharply. This trade had been highly profitable to the GDR, since the protective tariffs and subsidies applied to both West German and East German shipments were suspended entirely in January 1967 in an attempt to force the West Germans to make compensatory payments, and a settlement was finally reached in December 1968. Shipments of gasoline and diesel fuel were resumed in March 1969, but under quotas that were well below the import levels of the 1960's. East German deliveries of petroleum products to West Germany in 1971 totaled only 76,000 tons.

In order to maintain exports of petroleum products to non-Communist countries while domestic consumption increases, East Germany also imports these products. The U.S.S.R. is the most important source of imports.

In 1969, after years of intensive exploration, deposits of natural gas were discovered, apparently around the town of Merseburg. Production, which was about 143 million cubic meters, 1968, rose to 28 billion cubic meters in 1971. Production in 1972 was estimated at 5 billion cubic meters, and the revised plan for 1975 calls for output of approximately 9 billion cubic meters. In addition, natural gas is imported from the U.S.S.R. via a new pipeline through Czechoslovakia completed in May 1973. Some of this increase in supply will replace the manufactured gas output lost in closing some of the old coal gasification plants. Consumption of natural gas is to increase rapidly, particularly in chemical production.

2. Electric power

The electric power industry is one of the most highly developed sectors of the East German economy, and per capita production is relatively high. Even so, the power supply has been very tight. At the end of 1972 the installed capacity was 14.3 million kilowatts (kw.), and the production of electric power during the war was 72.8 billion kilowatt-hours (kw.-hr.). Thermal powerplants, including one nuclear installation, comprise by far the largest share of the capacity.

10

APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200110021-0