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Germany leans toward lifting ban on fracking

  • Article by: MELISSA EDDY and STANLEY REED
  • New York Times
  • June 5, 2014 - 9:47 PM

– In a potential shift in German energy policy, the government of Chancellor Angela Merkel is preparing a framework that would let energy companies extract oil and natural gas by the controversial practice of hydraulic fracturing, or fracking.

The guidelines emerging from government discussions are strict, but they are a step, as energy companies have been barred from using the technology in recent years, even for conventional gas extraction.

The government is responding to pressure from industry and consumers to develop new sources of fuel and reduce Germany’s dependence on natural gas imports from Russia. With domestic production dwindling, almost 90 percent of Germany’s gas is imported.

Fracking would open up the possibility of the production of oil and gas from shale rock in Germany.

Potential for shale gas

Analysts caution that there is unlikely to be any large-scale shale gas production in Germany soon. But the country does have potential: The Federal Natural Resources Agency, a government organization, has estimated that Germany has 2.3 trillion cubic meters, or 81 trillion cubic feet, of shale gas, enough to meet domestic consumption for 30 years.

But how much, if any, of this gas is recoverable is unknown because few exploration wells have been drilled to test flow rates after hydraulic fracturing, which involves pumping water, sand and other materials down wells at high pressure to cause the rock to release oil and gas.

“If you look at the numbers, it looks like lots of resources, but you don’t know until you drill,” said Jonathan Stern, chairman of the gas program at the Oxford Institute for Energy Studies in Britain.

Even if test wells show potential, Stern estimates that it would be the better part of a decade before Germany had significant shale production. Still, Germany’s industrial base would probably applaud even slow progress.

“We would welcome the establishment of a reliable legal framework and clearly defined rules for gas production with hydraulic fracturing in Germany,” the chemical company BASF said Thursday.

BASF’s oil and gas subsidiary, Wintershall, used hydraulic fracturing for many years to extract conventional gas but has been prevented from doing so recently because of rules against fracking.

BASF and other companies also want the government to authorize shale gas production as a possible tool for lowering energy costs.

“It is necessary to find out more about the potential that shale gas actually has in Germany. Today, nobody knows whether shale gas development makes sense,” the company said.

BASF has been investing in plants in North America to take advantage of the low gas prices there.

Britain also permits it

Should Germany move ahead with exploration of shale gas, it would join Britain as one of two countries in Western Europe permitting energy operators to look for so-called unconventional gas and oil. Britain is encouraging shale exploration in an effort to replace declining oil and gas output from the North Sea and to build up domestic sources of supply for industry, particularly power generation.

If the energy industries in these two large European countries were to succeed in producing shale gas without serious environmental consequences, then pressure would build on other countries, including France, which is also thought to have significant shale resources, to change tack.

Audits required

The guidelines being discussed by Merkel’s government would require environmental audits from two independent authorities and would impose a ban on drilling in areas where water is protected, according to a letter written by Sigmar Gabriel, the economy and energy minister, to a member of Parliament.

In the letter, obtained by the German news agency DPA, Gabriel said he intends to put the law to a vote in Parliament, where Merkel’s conservatives, together with the Social Democrats, hold a comfortable majority. “The goal is to finalize these drafts in the coming weeks,” the letter says.

Gabriel said he hoped the guidelines would be approved by the government before the summer recess and be put to a vote in Parliament by the end of the year.

But the proposal would face stiff opposition in the upper house of Parliament, made up of representatives of Germany’s 16 states, many of which oppose fracking.

Opposition to fracking is strong in Germany. Environmentalists and other opponents worry about pollution of aquifers, disruption from truck traffic and other risks. Some environmental groups are flatly opposed to shale gas and oil as a new source of fossil fuels that might detract from investment in renewable energy sources.

© 2014 Star Tribune