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Germany Approves Fracking

Brian Hicks

Written By Brian Hicks

Posted March 5, 2013

Last week, the German government agreed on fracking regulations to allow for shale gas exploration, a practice that has encountered much debate and extreme skepticism.

Through the legislation, fracking would be strictly prohibited in all water protection areas and in close proximity to drinking water wells. For each new project, an environmental assessment would be made to evaluate its impact on the environment, Bloomberg reports.

Both sides of the coin are coming together on a unified front. The Environment Minister Peter Altmaier and Economy Minister Philipp Roesler said in a joint letter that fracking would be permitted in designated areas and provide “a unified legal situation.”

“This offers a good perspective for the future even if we should wait to see the actual progress,” Roesler told Bloomberg. He continued to say that although fracking offers “significant opportunities, we must always keep in view possible effects on the environment.”

The regulating measures being taken would help break through the hold that has been placed on shale gas exploration for so long in Germany. It could also transform the energy landscape across Europe that relies heavily on Russia.

These regulations will alleviate some tensions, but fracking still faces criticism; Social Democrats are demanding a temporary ban while more information is gathered, and their political allies, the Green Party want to ban fracking permanently, as Bloomberg reports.

Green Party lawmaker, Oliver Krischer, told Bloomberg:

“Excluding drinking water protection areas is just for show. It means that fracking is allowed on more than 80 percent of Germany’s landmass.”

Germany holds anywhere from 0.7 to 2.3 trillion cubic meters (up to 81 billion cubic feet) of shale gas, according to estimates by the German Federal Institute for Geosciences and Natural Resources—enough to supply demand in Germany for the next 13 years.

But roughly 14 percent of the estimated reserves would be located in restricted areas, forbidden from drilling, according to Spiegel Online.

Fracking has made itself a major topic in energy and political debates in recent history, especially with German federal elections approaching on September 22. Not only can it sway voters, but it is vital to plans for a shift away from German nuclear power.

By 2022, Germany plans to close all of its nuclear power plants and be dependent on renewable power. Advocacy for renewables, along with mounting environmental concerns, has kept the fracking movement at a standstill.

No plans have yet been made for the proposed regulations to be introduced as law, but it is likely parliament will meet on the matter before elections.

German chemical company BASF SE (ETR: BAS) is one advocate for fracking to get started. The majority of the company’s profit is derived from oil and gas, and once fields are opened, BASF would gain from rising costs of raw materials, according to Bloomberg.

The far-left slams the notion of fracking and deems the regulations as hypocritical, made to neutralize public outcry.

Eva Bulling-Schroeter, the Die Linke Party’s environment spokeswoman, spoke with Business Recorder about the new proposal:

“It’s a sham. It pretends to provide increased environmental protection when in truth it offers less.”

She added:

“The government’s main aim is not to introduce additional protective standards but to break the de-facto moratorium on this absurd technology.”

As much heat as the possibility of fracking brings with it, it’s nothing compared to the undeniable potential it brings for great energy success—just look at the U.S.

Germany’s shale gas isn’t expected to be the boom that the U.S. is experiencing, but in the most heavily populated country in Europe, and with gas prices at four times that of U.S. markets, the German economy needs some relief.

Exxon Mobil Corp. (NYSE: XOM) and other companies are drilling test wells in areas already set up for conventional gas and oil. And there is high hope for the future as Germany begins to phase out nuclear and coal burning energy sources.

By 2030, natural gas should become the country’s number one source of energy, reported DW.

From DW:

“The most important thing for me is that people are not jeopardized and the environment is not affected,” German Chancellor Angela Merkel told the “Straubinger Tagblatt” daily.

And Environment Minister Altmaier said in a statement to the Business Recorder, “Safety and environmental protection have priority over economic interests.”

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