Friday, June 6, 2014

Berlin prepares to allow fracking

Flopping Aces posted the link.  You'll need a Financial Times account to read the article, unfortunately.

The operative word here is "prepares".  Which means that Germany won't see the fruits of their labor for several years.  Not only does Germany have to go through the legislative motions to approve the fracking, the natural gas industry will have to lay the infrastructure (pipelines) to transport the natural gas from the fields.  This won't be easy and will take time.

Add on top of that the propensity of the German government to regulate things to death.  You are looking at an environmental and regulatory burden much greater that what we have to deal with here in the USA.

This article also dovetails nicely with the American article I referenced in an earlier post.  The Germans are facing the prospect of a good portion of their chemical business moving to the USA due to the cheaper natural gas prices.  This is striking the Fear Of God in them.

The number for shale gas reserves is pretty amazing 2.3 trillion cubic meters. Wikipedia lists Germany 48th in the world for proven reserves for natural gas at about 175 billion cubic meters.  If this number is conservative (which I doubt) it would propel Germany into 11th or 12 place between Iraq and China.  So, for the Germans fracking is a really, really big deal.

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Fracking has been the subject of a fierce debate in Germany’s ruling coalition, with some politicians keen to reduce reliance on Russian energy imports, while others fear the impact of fracking chemicals on a densely populated country.

German manufacturers have been strong advocates of the new technology, which they believe has provided cheap shale gas energy to their US competitors while Germany grapples with a costly switch to subsidised renewables.

Details of the new regulations emerged in a letter from Sigmar Gabriel, German economy minister, to the head of the Bundestag’s budget committee. In the letter, Mr Gabriel wrote that permission to carry out fracking would be subject to approval from regional water authorities and that “further requirements for the fracking permit process are still being considered”.
Without a doubt, fracking is changing the geopolitical landscape.

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