Caspian Report - Issue: 07 - Spring 2014

the political conflict over fracking,
and weaken political support due
to the “fear of unknown” in rural
communities.
Germany
With an annual gas consumption of
around 100 bcm, Germany’s domestic
production covers just 12% of the
national gas demand 40% of Germany’s
gas consumption is supplied by Gazprom.
With an annual gas consumption
of around 100 bcm, Germany’s domestic
production covers just 12%
of the national gas demand. 40% of
Germany’s gas consumption is supplied
by Gazprom. Despite a moratorium
adopted by the federal states of
North Rhine-Westphalia and strong
opposition to shale gas drilling on
environmental grounds, several
companies, including ExxonMobil,
have acquired exploration licenses in
six of the federal states: Nord Rhine
Westphalia, Thuringia, Lower Saxony,
Saxony-Anhalt, Hessen and Baden-
Wuerttemberg. The state of Hessen
has called for uniform practice and
legal rules across the country, fearing
a competition between federal
states.
But the previous government in
Berlin and its Ministry for Environment
have tried to slow down the
discussions and any governmental
decisions. The Environment Ministry
has generally opposed fossil fuel
resources and instead has always
favoured heavily subsidised support
for re¬new¬able energy projects.
In July 2012, the German Federal
Institute for Geosciences and Natural
Resources (BGR) published its
first estimate for domestic shale gas
reserves and officially described
them as “significant”. The estimates
are considerably higher (up to three
times) than those published by ExxonMobil
in January 2012, and much
higher than Germany’s conventional
gas reserves. The BGR also concluded
that environmentally friendly [fracking]
technology is possible from a
geo-scientific point of view and that
“fracking and drinking-water protection
are fundamentally compatible.”
It also confirmed - together with the
comprehensive environmental study
“Hydrofracking Risk Assessment” -
that the fracking risks can be controlled
and regulated. At present, a
third of Germany’s domestic production
already uses fracking technologies
- some for more than 50 years.
Germany’s energy-intensive and
manufacturing industry (i.e. Bayer,
BASF at al.) has begun to voice its increasing
concern about the implications
of the U.S. unconventional gas
revolution for its future economic
competitiveness, as the reduced gas
prices in the U.S. are an essential
cost factor for petrochemical manufacturing,
in particular ethane. These
cheap feed stocks are reshaping the
global competitive landscape for petrochemicals
with a “quite phenomenal
advantage” for the U.S. industry.
“Cracking” ethane makes ethylene,
which is the major building block for
plastics such as polythene.
In January 2013, the BGR criticised
the lack of geo-scientific expertise
on the deep underground and identified
many instances of inconsistency
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CASPIAN REPORT, SPRING 2014