Germany might not be sitting on shale deposits on the same scale as those found in the United States or China, but its Lower Saxony Basin is estimated to contain nearly 80 trillion cubic feet (tcf) of natural gas, some 17 tcf of which are believed to be technically recoverable (not to mention 14 billion barrels of oil, 700 million of which are technically recoverable). The true potential of that wealth of domestic hydrocarbons might never be realized, however, after the German government just banned hydraulic fracturing indefinitely. Reuters reports:
Germany was on the verge of a parliamentary vote on similar legislation to ban fracking a year ago, but the effort stalled amid disagreements between Chancellor Angela Merkel’s conservative Christian Democrats (CDU) and the left Social Democrats (SPD). The two parties agreed on Tuesday to an indefinite ban, but the compromise legislation calls for the German parliament to reassess whether the decision is still valid in 2021, said Thomas Oppermann, who heads the SPD’s parliamentary group. […]German industry is keen to keep the door open to fracking – which involves blasting chemicals and water into rocks to release trapped gas – arguing it could help lower energy costs, but opposition is strong in the country, where a powerful green lobby has warned about possible risks to drinking water.
It’s entirely possible that the volumes of oil and gas trapped in German shale simply don’t merit commercial production. Remember that, in addition to staunch opposition from the country’s green ilk, German shale also has geologic hurdles to clear, as its rock layers are more “crunched” than America’s relatively even-layered stratigraphy, and are therefore more difficult to horizontally drill.But Berlin would rather not try, swayed by the arguments of environmentalists concerned about potential groundwater contamination—never mind that the depths being fracked are well below water tables, or that properly encased vertical wells can effectively minimize the risk of leaks during the fracking process. From environmental, economic, and energy security perspectives, Germany is giving up a lot with this ban.On the environmental side of things, shale gas emits just half as much carbon dioxide and far fewer local air pollutants than coal when burned. Plumbing new reserves of natural gas could displace some of Germany’s extraordinarily dirty lignite coal consumption. Moreover, because natural gas plants are cheaper to construct than coal plants, there’s less of a cost imperative to keep them running 24/7. They are therefore an ideal complement to intermittent renewables like solar and wind, because they can be switched on and off as needed. For renewables-crazed Germany, you would think this would make natural gas more of a priority.Banning fracking carries with it some obvious economic costs, too. Germany already pays some of Europe’s highest electricity prices, a direct result of the generous feed-in tariffs it uses to prop up non-competitive wind and solar energy. Rejecting a source of domestic natural gas won’t help to bring those prices down, which is why in 2014 oil historian Daniel Yergin warned that “[i]f Germany and other European countries do not try and tap their shale gas potential, they will likely have to pay higher gas prices in future than would otherwise be the case.” For Berlin, shale could help “maintain its competitiveness and export strength in the global economy, which is so critical to Germany’s overall economic performance,” Yergin continued. That exhortation has fallen on deaf ears.And lastly, snubbing shale will put Germany in the unenviable position of having to rely more heavily on foreign sources of natural gas which, of course, means a prolonged dependence on Russia’s Gazprom. True, Berlin has recently been pushing for the construction of a second gas pipeline connecting it to Russia (called the Nord Stream 2), but that project hasn’t just divided opinion in Europe—it’s been controversial within Germany as well. The head of one of German chancellor Angela Merkel’s coalition parties warned that this project would undermine Germany’s energy security by increasing imports of Gazprom gas. An indefinite ban on shale only serves to consolidate leverage in Putin’s hands.And yet, and yet…crazed German greens think Merkel’s government hasn’t gone far enough, with Hubert Weiger, the head of the environmental organization Friends of the Earth Germany, saying that “[t]he coalition’s agreement on a fracking permission law is hair-raising.” We have to agree, but for entirely different reasons—Weiger wanted Berlin to go further with a permanent ban, but for the sake of Germany’s economy, its energy security, and its “green” credentials, this indefinite prohibition is a huge step backwards.