By WILLIAM BOSTON
BERLIN -- Germany is debating whether to allow hydraulic
fracturing, a controversial drilling technique to extract natural
gas from shale, amid growing concern that rising energy
costs in the country could threaten its industrial
The German public is deeply suspicious of the drilling
practice, commonly known as fracking. Many Germans worry that
the process, which involves using a high-pressure mixture of
water, sand and chemicals to break apart energy-rich rocks,
could contaminate underground water supplies.
This week, the government unveiled a proposal that it hopes
can bridge the gap between pro-fracking advocates in industry
and environmentally conscious voters. Through a change to
existing laws, the government is proposing banning fracking
near any water supply and in all national parks and
conservation areas. Drilling anywhere else would be subject to
approval based on an environmental-impact study.
The fracking debate comes as Germany is pursuing a radical
restructuring of its energy sector. In the wake of the
Fukushima nuclear disaster in Japan in 2011, Chancellor Angela
Merkel abruptly declared that Germany would abandon nuclear
power and transition to renewable energy sources such as wind
As the use of nuclear power declines, Germany is filling the
gap with a combination of renewable energy and coal-fired
Yet Ms. Merkel's "energy revolution," as the shift away from
nuclear has been dubbed, is having unexpected side effects.
Subsidies for renewable-energy producers that are financed
in part through household electricity bills are causing
electricity prices for ordinary consumers and industry to rise.
Germany's biggest industrial power consumers have seen
electricity prices per kilowatt hour rise nearly 40% in the
past five years, according to the Cologne Institute for
Economic Research, also known as IW. Electricity prices for
industry are nearly 15% higher than the average in the
27-nation European Union, IW said.
"We have reached the pain threshold," said Michael Huther,
IW's director. He added that data show that energy-intensive
industries are already beginning to curtail investment in
Germany because of higher electricity charges.
"We are beginning to observe a creeping disinvestment," he
As the country turns its back on nuclear power, it is also
seeing its carbon emissions rise. Long a leader in cutting CO2
emissions, Germany's emissions rose 1.6% last year, according
to the Environment Ministry, the first rise in years.
It is unclear what immediate impact increased natural-gas
supplies would have on German electricity bills. Still, the
availability of cheaper natural
gas could help avert a large-scale return to coal in 2020.
That is the year that Germany will shut down about six nuclear
power stations and many of the country's coal-fired power
plants will also shut down due to age.
A plentiful supply of domestic natural gas could provide a
better bridge fuel to replace nuclear power as Germany
continues to build its alternative energy supply, say
If fracking is ultimately banned in Germany, analysts warn
that Germany could miss out on a broader European energy boom.
Eastern European countries like Poland and Ukraine have large
shale deposits and are keen to exploit them.
Experts don't believe Germany has the kind of massive
shale-gas deposits that are transforming the US energy market.
But there could be enough natural
gas trapped underground to meet Germany's gas needs for
about 50 years, based on the current rate of gas consumption,
at costs below what Germany now pays for imported gas, analysts
So far, Ms. Merkel has sided with her wary public,
expressing doubts about the viability of fracking in Germany
and pledging to allow it only if it can be proven entirely
safe. Ms. Merkel is trying to please the broader public, which
surveys show is frightened by fracking, while not alienating
industry, which is lobbying the government to do something
about Germany's soaring energy costs.
"The compromise here is to allow for pilot projects to do testing," said
Miranda Schreurs, director of the Berlin-based Environmental
Policy Research Center and an adviser to the German government
on the issue. "The government is trying to keep the door open
for fracking to be able to say that if they do it, it will be
Germany's energy industry welcomed the fact that the
government has shied away from an outright ban on any fracking.
The government's proposals are a compromise between the
environment minister, who initially wanted to ban fracking, and
the economy minister, who wants to allow it. Industry sees the
compromise as a step that would allow for some testing and
which could help determine whether fracking is harmful to the
"Only at the end [of testing] will we be able to judge using
all relevant criteria whether this makes sense-economically,
environmentally, and regarding its acceptance by society," a
spokesman for chemical and energy group BASF said. "To do that,
we need the framework which is now being established."
Germany's powerful environmental lobby says the government's
proposals don't go far enough and demand an outright ban. The
opposition Green Party called the government's move a smoke
screen. "It's like banning skiing in the Sahara," said Oliver
Krischer, a Green Party member of parliament. "An
environmental-impact study, which is also embraced by the gas
industry, will do little."
Dow Jones Newswires