Legislative Veto

SPD to Energy Companies, German Consumers: Frack You

fracking protest dpa
Many Germans, like these protesting this summer in Berlin, are opposed to fracking.
  • Why it matters

    Why it matters

    German politicians are pandering to public opinion, which is squarely against fracking, by pushing for a virtual ban on the controversial practice. Industry leaders are furious.

  • Facts

    Facts

    • Draft legislation drawn up by the Social Democrat economics and environment ministers would all but ban fracking.
    • ExxonMobil has developed a new fracking process that eliminates toxic chemicals in the fracking fluid.
    • Fracking could cover Germany’s natural gas needs for 13 years.
  • Audio

    Audio

  • Pdf

If the Social Democrats have their way, fracking will have no future in Germany.

Handelsblatt has learned that Economics Minister Sigmar Gabriel and Environment Minister Barbara Hendricks, both members of the center-left Social Democrats, are planning to submit draft legislation this month that would effectively ban hydraulic fracturing to extract shale gas, otherwise known as fracking. The Social Democrats, or SPD, are in coalition with Chancellor Angela Merkel’s center-right Christian Democrats.

Maria Krautzberger, president of the Federal Environmental Agency and also a member of the SPD, confidently concluded: “I don’t see any prospects for shale gas in the foreseeable future in Germany.”

This political blockade of fracking is triggering growing resentment and open protest among German industry leaders. They accuse politicians of adhering to old prejudices, despite new information about the risks of fracking, thereby obstructing efforts to try out a promising technology.

For instance, U.S.-based ExxonMobil is now capable of forcing oil and gas out of underground rock with a fluid that only contains two harmless chemicals, Gernot Kalkoffen, head of the company’s German operations, told Handelsblatt.

“Politicians have consistently demanded that we remove toxic materials from fracking fluids,” he said. “We’ve achieved that in the laboratory, and now we want to test these fluids in pilot projects.”

Fracking photo illustration 10 Sept 2014 Source Handelsblatt
The Social Democrats, Chancellor Angela Merkel’s coalition partner, are preparing legislation that would effectively block fracking in Germany. Source: Handelsblatt

 

But those trials are unlikely to materialize, despite the fact that the government’s arguments are weakening. According to an internal memo from the German Environment Ministry, which Handelsblatt has seen, the progress ExxonMobil has achieved in its laboratories now precludes the use of a “ban on hazardous substances” as justification for an outright ban on the drilling method.

Nevertheless, the memo continues, the draft legislation should “by no means create the impression within the public that it is a ‘law that facilitates fracking.’” Instead of taking on board the new developments, the politicians are basing their decisions on the polls, which show that two out of three Germans want to see fracking banned.

This populism infuriates Markus Kerber, managing director of the Federation of German Industries. Earlier this month, he wrote a letter to Peter Altmaier, Chancellor Merkel’s chief of staff, explaining that his organization views the work on the draft legislation “with great concern.”

“The obstruction of billions in investment,” he warned, “would have negative multiplier effects and would threaten thousands of jobs.”

According to estimates by the Federal Institute for Geosciences, an additional 1.3 trillion cubic meters of natural gas could be exploited through fracking – enough to cover Germany’s natural gas needs for 13 years.

That is an important argument at a time when politicians are emphatically calling for less dependence on Russian natural gas.

There had already been indications that the government was going to take a hardline on fracking.

The coalition agreement between the Social Democrats and Ms. Merkel’s Christian Democrats referred to fracking as a “risk technology,” something that enraged gas producers.

And since the end of July it has been clear that this view of the technology has prevailed when it came to drawing up the fracking leglisation. “Fracking is and remains a risk technology,” said the Ms. Krautzberger of the Federal Environmental Agency, when presenting a new expert study. She argued that as long as the essential risks could not be predicted and controlled, there should be no fracking in Germany. The environment ministry immediately agreed.

However, Uwe Dannwolf, who headed up the study, said he was amazed at Ms. Krautzberger’s comments. “Those words did not appear in our study,” he told the ARD TV station. He said that he considered the risks to be manageable, and did not go beyond other technologies. Mr. Dannwolf said he felt his study had not been interpreted correctly.

The gas industry increasingly suspects that the politicians are not interested in an open discussion about the issue but rather simply want to block the controversial technology.

Even in the governing coalition there are voices that are openly critical. “It cannot be that facts are simply hidden and that things are declared unthinkable – only so that a fracking ban can be pushed through politically,” said Joachim Pfeiffer, the Christian Democrats parliamentary spokesman for economic affairs.

The officials have defended their actions, arguing that the risk analysis of fracking was not just based on one study. A spokesperson for the environment ministry denied accusations of being technophobic: “The federal government is not excluding a technology forever, but instead wants a controlled and careful examination of the possible effects on the environment and underground.” The protection of health and the ground water have highest priority.

This, however, is exactly the area in which ExxonMobil has made the most progress in its development of a fracking liquid that is far less toxic.

However, the ministry remains skeptical. “We don’t rely on announcements but rather wait for reliable scientific proof,” a spokesperson said.

The industry has little patience with this approach. “In a country like Germany that has few natural resources, we have to ask ourselves what resources will we have at our disposal in the future,” said Rainer Seele, chief executive of the Wintershall, Germany’s largest crude oil and natural gas producer.

This article was translated by Christopher Sultan. Thomas Sigmund contributed to the article. To contact the authors: flauger@handelsblatt.com, kersting@handelsblatt.compalm@handelsblatt.com and sigmund@handelsblatt.com 

We hope you enjoyed this article

Make sure to sign up for our free newsletters too!