German Shale-Gas Fracking Rules Sought in Merkel Coalition Paper

Chancellor Angela Merkel’s coalition wants to set rules aimed at easing the extraction of natural gas by means of hydraulic fracturing, deflecting calls in some German regions to ban the technology on environmental grounds.

So-called fracking outside of water-protection areas should be permitted pending completion of environmental impact assessments that take into account possible flow-backs of fracking liquids, a paper drafted by government lawmakers in the environment and economy working group showed.

The government, working with state leaders as well as mining and environmental regulators, should draft rules “in the near term for a safe development of shale gas to support a nationwide implementation,” the lawmakers said in the paper, obtained by Bloomberg News. The rules should outlaw fracking in water-protection areas and protect mineral springs, they said.

Merkel’s Christian Democrat-led coalition is sparring with the opposition Social Democrats over fracking ahead of September federal elections. The opposition-controlled upper house passed a resolution on Feb. 1 urging the government to ban the use of substances that might harm the environment until all the risks have been assessed, a demand that would block fracking for the foreseeable future. The paper doesn’t mention such assessments.

Fracking has risen up the political agenda in Germany as industry is forced to pay rising energy costs following Merkel’s decision to shutter nuclear power plants and switch to renewable energies. Gas prices in Germany are now four times those of the U.S. because of the latter’s support for shale gas, Ulrich Grillo, president of Germany’s BDI industry association, was cited as saying in the Frankfurter Allgemeine Zeitung Jan. 28.

Boosting Output

Germany sits on as much as 2.3 billion cubic meters of shale gas, enough to boost the current output of natural gas 100-fold, according to Volker Steinbach, head of the natural resources department of the Federal Institute for Geosciences and Natural Resources.

Companies including Exxon Mobil Corp. have drilled test wells into unconventional natural gas reservoirs in Germany in an attempt to emulate the U.S. shale-gas boom. While a successful drilling campaign would redraw the energy map across Europe -- a continent reliant on Russia for about a quarter of its gas -- little headway has been made in Germany, largely due to public opposition on environmental grounds.

Merkel’s coalition defeated motions from the opposition Greens and Left Party in December that called for a ban on fracking. That sent a signal that Germany, unlike France, wants to keep the door to national shale gas production open. The U.K. decided to go ahead with fracking the same month. The practice was outlawed in France in 2011 and it is also banned in Bulgaria.

Fracking involves drilling hundreds of wells and cracking shale rocks with a high-pressure mixture of water, sand and chemicals, to unlock gas or oil from impermeable stone. It has been practiced in Germany since the 1960s, and has been used at least 275 times at conventional gas and oil wells in Lower Saxony state, according to a study presented by the Environment Ministry in September.

Before it's here, it's on the Bloomberg Terminal.