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Nick Cunningham

Nick Cunningham

Nick Cunningham is a freelance writer on oil and gas, renewable energy, climate change, energy policy and geopolitics. He is based in Pittsburgh, PA.

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Could Germany Become The Next Shale Hotspot?

Could Germany Become The Next Shale Hotspot?

Nuclear power is out in Germany, but could shale gas soon be included in the historic German energiewende?

The German government has taken bold steps to move its electricity generation mix towards renewable energy, having put in place a groundbreaking feed-in-tariff years ago to provide strong incentives for solar and wind. Germany kicked its plan to shift to renewable energy into overdrive after the nuclear meltdown at Fukushima. Germany’s strong environmental ethos has made the transition possible – opposition to nuclear power is fierce, and the broad desire to shutter nuclear reactors among the populace helped overcome entrenched interests and convince the German Chancellor to make an about-face on her plan to keep nuclear reactors open for years to come.

Up until now, opposition to hydraulic fracturing has also been very strong. But the German government is flirting with the idea of allowing oil and gas drillers to begin fracking. There has been a de facto moratorium on fracking in place for several years, but a new proposal, if passed, could open up the country to drilling by the end of the decade. Under the proposal an expert panel of six government officials would be granted authority to approve fracking at depths greater than 3,000 meters below the surface. Related: EU Pushes For Greater Integration Into An Energy Union

Careful about wading into controversy with traditionally green-thumbed German citizens, German officials are billing the move as an environmental protection. “It is important to have a legal framework for hydraulic fracturing as until now there has been no legislation on the subject,” said Maria Krautzberger, president of Germany’s federal environment agency (UBA), according to the Guardian. “We have had a voluntary agreement with the big companies that there would be no fracking but if a company like Exxon wanted, they might do it anyway as there is no way to forbid it,” she added. “This is a progressive step forward.”

That has not pacified environmental groups, which cite the fact that some of the panel members have signed onto the Hanover Declaration, a call for Germany to research shale gas as an answer to enhancing energy security. Environmentalists also see the new proposal as a backsliding away from Germany’s commitment to a clean energy future. Shale gas could displace or slow renewable energy. As recently as July 2014 the German government had supported a fracking ban that would last until 2021.

There is significant interest on the part of the industry. ExxonMobil in particular is eyeing Germany’s shale reserves. The multinational oil company initiated a public relations campaign in September 2014 to convince a skeptical public on its safe drilling practices. It has funded research into shale gas safety, a key element of the Hanover Declaration, and a critical component of the company’s efforts to assuage safety concerns. It also has promised it will use non-toxic additives during the fracking process.

Although estimates are foggy, given the lack of exploration, Germany could be sitting on 25 to 81 trillion cubic feet of shale gas. Related: Germany Considers Coal Phase Out

Still, the recent proposal will not set off a German shale revolution overnight. The measure still needs to be passed by the Bundestag when it goes up for a vote in May. It will take several years for the “expert panel” to come into being, likely pushing off drilling until 2019 at the earliest. Even then, it is unclear what the legal framework will look like and what sections of the country will be opened up for drilling.

Moreover, if past experiences are any indication, shale gas production could be more difficult than many companies realize. Europe is much more densely populated than parts of the United States – such as Texas and North Dakota – that have seen an onslaught of drilling.

There will also likely be a steeper learning curve. Neighboring Poland has struck out with shale gas, despite strong support from the government. On January 31, Chevron finally threw in the towel, becoming the latest major international company to quit Poland after disappointing results. Other companies had already pulled out their exploration crews, including Marathon Oil, Total, and even ExxonMobil.

By Nick Cunningham of Oilprice.com

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