Depending on who you ask, Germany just imposed a temporary moratorium on fracking or just opened the floodgates for it. As always, the truth is somewhere in the middle, with opposing camps reading the worst into the facts for their own political campaigning. Craig Morris says the situation in Ukraine is illustrative.
The EU remains concerned about energy-intensive industry leaving the continent to places with lower natural gas prices, like the United States. The EU’s Energy Commissioner, Günther Oettinger, called on his home country Germany this month to leave the door open to shale gas. That’s exactly what the country did several days earlier.
The press release on the announcement is quite short and easy to understand, yet it has been interpreted in headlines that contradict each other. The business world says Germany will “ban fracking for seven years,” while German Green Party politician Oliver Krischer calls the amendments a “Fracking Facilitation Act.”
There is disagreement within Germany about fracking. The three states of Hesse, Baden-Württemberg, and Schleswig-Holstein – which all have the Green Party in their governing coalition – plan to have (report in German) the German Mining Act changed in order to rule out fracking altogether. In contrast, the SPD and the FDP (press releases in German) in Mecklenburg-West Pomerania, which is estimated to have a lot of Germany’s shale gas reserves, emphasizes the economic potential of fracking.
But as the attempt to change the Mining Act shows, fracking is currently legal in Germany – under certain conditions. You see, there are different types of fracking. Germany has been conducting one type – called “conventional fracking” – since the 1960s on “tight gas.” Since 2005, unconventional fracking has boomed in the US; that year, the US government placed the burden of proof on the public – if groundwater is contaminated or earthquakes caused, people have to demonstrate that fracking was the culprit. Further, in the US, the fracking firms do not have to demonstrate that they did not cause the damage, nor have they been required to publish the chemicals used (though this requirement is slowly changing).
The new German rules stipulate that the burden of proof is on fracking firms. All chemicals used must be reported publicly. Above 3,000 meters, unconventional fracking is ruled out for commercial purposes, but research projects are to be conducted to see how the impact on groundwater can be reduced. If a review in 2021 finds that technological progress has been made, unconventional fracking could be allowed. Conventional fracking can continue in the meantime, and substances that pose “slight risks” to groundwater will now be allowed.
There is thus something for everyone here: Firms that want to frack cannot really go ahead, while those who wanted fracking prohibited outright see Germany stepping onto a slippery slope.
My feeling is that opponents of fracking need not worry. The technology is largely phasing out itself. The latest example is Ukraine, a country previously reliant on natural gas supplies from Russia. If anyone should be desperate for domestic shale gas, it’s the Ukrainians. Nonetheless, Shell has mothballed its projects in the country, allegedly because of the unrest – but an industry journal says the war is simply a good excuse, with the real reason being “there is no gas.”
German energy firms invested dramatically in coal last decade partly in response to special incentives for new coal plants, and they now regret the investments. Maybe oil and gas firms should not be so upset; the German government may have just prevented them from making some terrible investments.