Germany should thoroughly debate whether it can afford an outright ban on the production of shale gas, a form of unconventional natural gas found in shale rock formations that has helped turn the U.S. energy market upside down, the chief executive officer of the country's largest oil and gas producer said Wednesday.
Germany should thoroughly debate whether it can afford an outright ban
on the production of shale gas, a form of unconventional natural gas found in
shale rock formations that has helped turn the U.S. energy market upside down,
the chief executive officer of the country's largest oil and gas producer said
Wednesday.
"The production of shale gas could be a great opportunity for
Germany
,"
said Rainer Seele, CEO of Wintershall, a unit of chemical giant BASF SE
(BAS.XE).
However, shale gas production is controversial in
Germany
as it
requires the application of hydraulic fracturing, a technology also known as
fracking that is used to extract unconventional natural gas deposits that
cannot be released by simply drilling a well. Fracking involves pumping huge
volumes of water and chemicals underground to fracture rock formations and
release the trapped gas deposits.
Mr. Seele conceded that shale gas production in Germany is unlikely to turn the
domestic energy market upside down, contrasting developments in the past few
years in the U.S., where shale gas production triggered a massive slide in gas
prices and is set to make the country the world's largest gas producer.
However, shale gas production could help keep indigenous gas production at
present levels for at least another 100 years, he said.
Germany
is in
the midst of phasing out all nuclear power generation through 2022 and intends
to replace most of its fossil-fueled power plants with "green" energy
such as wind and solar power. Gas, which emits less carbon dioxide than coal,
is widely considered as an acceptable backup for intermittent renewable
energies.
Germany
's
state-owned Federal Institute for Geosciences and Natural Resources said last
year the country has significant shale gas reserves that--if produced--could
theoretically meet the country's gas consumption for the next 10 years and help
it to considerably reduce reliance on energy imports.
Mr. Seele also criticized the fierce rejection of the fracking technology by
vast parts of the German population for fear of environmental harm.
"Many people don't know that around one third of indigenous production of
conventional gas can only be produced through application of hydraulic
fracturing," he said.
Mr. Seele added that a large portion of that is known as tight gas, a form of
natural gas trapped in extremely dense rock formations. In contrast to shale
gas, tight gas carrying rock formations are generally located much deeper
underground and are therefore not in close proximity to ground water
reservoirs.
Mr. Seele said that the controversy surrounding the issue of shale gas and
fracking has effectively resulted in an outright ban of the technology for fear
of public outcry on environmental grounds.
He added that authorities in
Germany
haven't approved any fracking requests since the middle of 2011, which has
accelerated the decline in indigenous gas production, which is already on the
decline as wells are gradually depleting.
Last year, domestic gas production declined to 12% of overall consumption, in
part due to the ban on fracking, Mr. Seele said.
Germany
's gas
and oil industry association WEG last month said that indigenous gas production
declined by a further 10% in the first half of 2013 compared with the same
period a year earlier. The lobby group also attributed the fall to failure by
authorities to approve fracking activities.
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