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Promise of shale gas throws ‘unexpected wrench’ into Germany’s green energy plans



Promise of shale gas throws ‘unexpected wrench’ into Germany’s green energy plans
By Michael Birnbaum, Wednesday, April 24, 3:47 AM

WAGENFELD, Germany — Germany has one of the most robust green movements in the world, but economic pressures are tempting it to try something that critics say would harm the Earth: shale gas drilling.

Motivated by a rapid-fire increase in natural gas production in the United States, business leaders and some politicians in Germany say they need to act quickly to prevent the country’s industrial core from departing for places where energy costs just a fraction of the price. They worry that the country’s ambitious environmental goals are far less meaningful if the economy withers in achieving them.

Legislation under discussion would for the first time formalize permits for shale gas production in Germany, which is estimated to have enough reserves to feed natural gas demand for 20 years. But the plans have set off a backlash from many citizens, who are far more concerned than most Americans about the technique called hydraulic fracturing, or fracking. And in a country that wants to generate 80 percent of its electricity from renewable sources by 2050, some say pouring investment into fossil fuels makes little sense.

Here in Wagenfeld, a tiny town with thatch-roofed houses and half-timbered barns in the agricultural flatlands of northwestern Germany, Exxon Mobil said last year that it was interested in drilling a test well in a marshy area on the outskirts. For Dirk Luetvogt, the owner of a fourth-generation mineral-water company that is one of the town’s largest employers, the possibility of chemicals leaching into the groundwater could put him out of business.

“We are sitting on Swiss cheese,” Luetvogt said, worrying that contaminants from the fracking process could spread into the pure water that is his raw material. “The risks are just too high.”

The push to tap Germany’s shale gas despite the country’s green goals is yet another unpredictable consequence of the rapid increase in the United States’ natural gas production, made possible through innovations in fracking, a method that forces a slurry of chemicals, sand and water at high pressure down a well to fracture shale and unlock the gas within. The U.S. price for natural gas in 2012 was just a quarter that of Europe’s, a gap that has opened in just a few years.

Russia, China and other energy powers also are exploring fracking as questions about the environmental consequences of the technique remain. Smaller countries such as Poland are seeking the technology for political reasons, hoping to break free from dependence on Russian gas. Still other countries, such as France, have imposed moratoriums as they seek to learn more about the risks of the practice.

Germany aims to phase out nuclear power by 2022, reduce greenhouse gas emissions 80 percent by 2050 compared with 1990 levels and sharply ramp up the power it generates from renewable sources — an ambitious set of policies that it calls its energy transition. But many of the calculations about the costs of Germany’s environmental plans assumed that fossil fuels would grow scarcer and therefore more expensive. That would have meant that energy costs in other countries would have risen along with Germany’s, even if others were not pouring up to $1.3 trillion into green efforts in the coming decades, as Germany is doing.

Instead, rather than becoming more competitive on energy prices, Germany is becoming less so. German consumers and industries find their energy costs going up just as they are dropping elsewhere. Coal — among the dirtiest sources of energy — is rising in Germany’s energy mix, in part because it is cheaper than alternatives.

Fracking “has thrown an unexpected wrench into the energy transition. Nobody expected this, nobody saw it coming,” said Miranda Schreurs, the director of the Environmental Policy Research Center at the Free University of Berlin and a government adviser. “It raises a lot of questions about what it means when you have a lot more fossil fuel than you thought you would. We need the energy transition, because of climate change, energy independence, clean energy. But, certainly, fracking has changed the debate.”

Now energy companies are wondering whether high gas prices in Europe could earn them profits while still bringing down overall costs for consumers and manufacturers. Output from gas power plants can quickly be ramped up and down, unlike coal, smoothing out the rapid variations in solar and wind energy’s output as the sun and wind rise and ebb. And advocates say natural gas would still pave the way for Germany’s lower-emissions goals, even though it is a fossil fuel, because it is twice as clean as coal when burned.

Exxon Mobil and other energy companies, seeing an economic opportunity, have expressed interest in drilling exploratory wells in northwestern Germany, where the country’s shale gas resources are thought to be concentrated. The area has long been home to Germany’s conventional oil and natural gas production. Exxon Mobil has been funding German research into shale gas safety, which analysts say is part of a campaign to win acceptance in the country.

The frontier lands

With tax revenue and a special surcharge on electricity bills paying for the ambitious green plans, every German household chips in for the cost of moving to renewable energy, and there is wide acceptance for doing so. Solar panels cover fields and roofs. Windmills spin over rolling hills. But as Germany’s plans have gotten more expensive since 2011, when the nuclear phaseout was announced, natural gas in the United States has gotten far cheaper.

“A lot of companies are coming to Lower Saxony and saying, ‘Well, it could be interesting to look for shale gas in northern Germany,’ ” said Ralf Pospich, the president of the Lower Saxony State Office for Mining, Energy and Geology, which oversees gas drilling permits in the region.

The future of shale gas took a step forward at the end of February when Germany’s environment and economics ministries proposed rules for exploration that would impose restrictions around protected watershed areas but create a standardized route for drilling elsewhere.

“We must look very carefully at whether this technology can be used here,” Chancellor Angela Merkel told the Straubinger Tagblatt newspaper this year. “For me, the most important thing is that there should be no danger to people or the environment.”

But opposition still runs high. In some parts of northwestern Germany, screenings of the anti-shale-fracking film “GasLand” are a frequent occurrence. Some Germans point to the rapid development of shale fracking in the United States as evidence of the practice’s safety. Others say there is no reason to hurry if the risks can be better understood from what goes right — and wrong — in America.

Costs and benefits

Fracking has a long history in Germany, dating to the 1960s with shallower conventional wells. But many in the coal- and gas-rich northwestern part of the country are concerned about use of the technique on shale, which requires a different set of chemicals that are injected into a wider area underground. There are also concerns about the global-warming aspects of leaks of methane — a greenhouse gas with more powerful warming effects than carbon dioxide — and geological worries about the possibility of setting off small earthquakes during the fracking process.

“People say, ‘We used to think nuclear energy was safe, now we don’t. So we don’t trust experts on fracking,’ ” said Wolfram van Lessen, the deputy county administrator of an area where Exxon Mobil has said it was interested in drilling exploratory shale gas wells. “I can understand that people are worried. That’s their livelihood.”

Incentives also work differently in Europe, where underground mineral rights belong to the state, not to landowners, as they do in the United States.

In the United States, communities weigh environmental risks against immediate economic benefits from royalties and leases. In Germany, individuals have far less to gain from fracking.

Luetvogt, the mineral water businessman, said he was concerned about the future of his plant, where clinking glass bottles are washed, then filled with bubbling water from the family’s well. The oldest building on the property is a timbered barn that dates to 1786.

“Family businesses think in terms of generations, not in quarters,” he said. “We think in terms of sustainability. An American company that is here for a few years and then leaves — what happens if there is a problem here? We are left with the consequences.”

We visited Germany in the summer of 2012 and I was shocked to see windmills and solar collectors all over the countryside. Really obtrusive and unattractive.


--- Quote from: mountaineer on April 25, 2013, 12:44:57 pm ---We visited Germany in the summer of 2012 and I was shocked to see windmills and solar collectors all over the countryside. Really obtrusive and unattractive.

--- End quote ---

They are hideous.... ruining our deserts out here with both, not to mention killing birds and bats.  I'll take an oil pump any day.

Wind Energy Cannot Compete in Free Market
April 25, 2013

Renewable energy endeavors have been the recipients of massive federal subsidies meant to jumpstart the industry. A new House Science, Space and Technology Committee hearing recently examined the efficiency and effectiveness of federal wind energy incentives. The findings of the committee suggest that wind cannot compete in the free market without the subsidies, says Marlo Lewis, a senior fellow at the Competitive Enterprise Institute.

•According to the U.S. Government Accountability Office, nine agencies administered 82 programs providing $4 billion in financial support to the wind industry in 2011.
•The support, which was provided in the forms of grants, loans, loan guarantees and tax breaks, was used overwhelmingly for deployment of wind energy, rather than for research and development.
•The American Wind Energy Association disputes the claim that 82 programs granted aid, saying that only two of the 82 programs were wind-specific and that less than 1 percent of wind projects took both a tax break and a Department of Energy loan.

Some members of the committee suggested shifting more funding toward research and development, which could serve to make wind technologies more competitive in the market.

•The subsidies are currently wasted on start-ups and firms that use the government aid to prop up investments that will never be profitable.
•The principles of the free market, as well as President Carter's energy programs, remind us that if a technology is viable the market will ensure its success, and if a technology is not commercially viable no amount of government support can lead to its success.

Despite this logic, the Cape Wind project, which seeks to place more than 130 440-foot wind turbines off the cost of the Nantucket Sound, has received regulatory approval from the U.S. Coast Guard, the U.S. Fish and Wildlife Service and the Federal Aviation Administration, each of which has noted the serious impacts of the proposal. In addition, the proposal would raise electricity rate for residents of Massachusetts.

•Wind is not competitive because it is not reliable, it can fluctuate rapidly and consumers pay for certainty.
•The cost per megawatt-hour (MWh) of combined capital and operating expenses of the lifetime of a new wind unit is $96/MWh versus $66.1/MWh for natural gas.
•Wind turbines are also more expensive because they are usually built in remote locations and the energy they produce must be transported further, as well as the decreasing productivity they experience throughout their lifetime.

Full article: Marlo Lewis, "Can Wind 'Compete' without Subsidy?", April 18, 2013.


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