In May 2012 the German Federal Institute for Geosciences and Natural Resources (BGR) published a study on the potential of shale gas in Germany. It identified shale gas deposits of between 6.8 and 22.6 trillion cubic meters, with a median value of 13 trillion cubic meters, of gas in place. Assuming a technically recoverable rate of 10%, this leads to between 0.7 and 2.3 trillion cubic meters, with a median of 1.3 trillion cubic meters.1
However, fracking is politically contentious in Germany. After a study presented by the Federal Ministry for the Environment (BMU) and the Federal Environment Agency (UBA) that recommended strict requirements for fracking and to take a step-by-step approach to test the technology.2
2013 Revision Project
BMU and the Federal Economics Ministry (BMWi) in February 2013 agreed on a joint proposal to amend the Federal Water Resources Act (WHG) and the Ordinance on Environmental Impact Assessments Concerning Mining Projects (UVP-V Bergbau) to regulate fracking.3
The proposed revisions covered deep drilling (Tiefbohrungen) using hydraulic fracturing for the exploration and extraction of shale gas or oil, as well as for geothermal energy.
The proposed amendment of the WHG would have introduced the mandatory involvement of the water authorities. According to the proposed provisions, the competent mining authority would have to decide in mutual agreement with the water authorities whether drilling represents a use of water that requires a permit pursuant to WHG if an operating plan pursuant to mining law provides for deep drilling. The new section shall also apply to the underground storage of the flow back.
Furthermore, the amendment contained a ban on fracking in drinking water protection areas. The explanatory memorandum pointed out that this restriction also applied to medicinal spring protection areas (Heilquellenschutzgebiete). The amendment also provided for a possibility to restrict deep drilling in areas that are not drinking water protection areas. Drilling that had been permitted before the new law enters into force would be protected by a grandfathering clause.
The draft amendment of the Ordinance on Environmental Impact Assessments Concerning Mining Projects made an environmental impact assessment mandatory for deep drilling for gas, oil or geothermal energy involving fracking. A grandfathering rule was to apply to projects already under way when the amendment enters into force.
The opposition criticised the agreement between BMU and BMWi as being too far-reaching. Environmentalists in Germany continued to express concerns as they feared water contamination near drilling sites.
In light of then-upcoming federal elections on 22 September 2013, the CDU/CSU/FDP-led government decided in June 2013 not to agree on a bill to regulate fracking. The originally agreed proposal was therefore not presented to the Bundestag (German Parliament) for voting.4
2013 Coalition Agreement
The situation did not change after the election in September 2013. The current government (Conservative/Social Democrats) stated in the coalition agreement that fracking is a new technology with significant risk potential. Before using that technology, knowledge about fracking and its environmental impacts needed to be examined. The government announced that they would initiate an evaluation process with the support of scientists and the federal states. The government also announced short-term changes to the WHG that will lead to the better protection of drinking water. Furthermore the Ordinance on Environmental Impact Assessments shall be amended and make an environmental impact assessment mandatory before the exploration or extraction of natural gas by fracking.5
While the provisions in the coalition agreement are somewhat similar to the abandoned 2013 draft bill of BMU and BMWI, the new coalition government has not yet presented a new fracking bill to parliament.
July 2014 Study
In July 2014 a second study regarding fracking was published by Umweltbundesamt (UBA).6 This study further assessed environmental aspects associated with shale gas development, including:
- the development of a groundwater monitoring concept;
- the evaluation of a nationwide register of fracking chemicals;
- the collation of the current state of research on carbon footprint;
- the evaluation of environmentally sound disposal options for flowback;
- the investigation into potential threats resulting from induced seismicity;
- the collection and evaluation of data relating to land use and impact to nature; and
- issues connected with the ecosystem, landscape, and biodiversity.
The study and its conclusions have generated controversy.
2014 Federal Council Initiatives
In 11 July 2014 the Federal States Schleswig-Holstein, Baden-Württemberg and Hesse introduced, via the Federal Council (Bundesrat), a proposal to amend the German Federal Mining Act intended to restrict fracking, primarily on the basis of environmental concerns.
The proposed amendment includes a prohibition on the use of toxic substances, a provision on revoking permissions in later licensing procedures, a more transparent approval procedure, and a mandatory environmental impact assessment (EIA). The proposal generated some controversy when discussed in the plenary session of the Federal Council. It is currently subject to the legislative review process.
2014 BMU/BMWi Key Point Paper
After considerable back and forth, the German Environment Ministry (BMU) and the Ministry of Economic Affairs and Energy (BMWi) agreed on a non-binding key point paper on how to regulate shale gas7. According to the Environment Ministry, these are the most stringent rules that have ever been considered.
The key point paper contains the following items:
- Shale gas moratorium until 2021: Hydraulic fracturing technology for drilling operations shallower than 3,000 meters shall be prohibited by the Federal Water Resources Act (WHG). Scientific testing measures for the exploration of effects on the environment and the subsoil shall be permitted if used fluids do not pose a hazardous risk to water.
- Shale gas projects for conventional gas exploration (i.e. ‘tight gas’) shall continue to be allowed in principle. These projects have been carried out in Germany since the 1960s. Nevertheless, the government shall introduce additional regulations to protect water resources.
- Any risk for the public water supply shall be avoided by a prohibition of any kind of shale gas projects in water protection areas, mineral spring reserves, and areas of dams and lakes that are directly related to public water supply. This ban may be extended to further areas.
- The introduction of strict regulations for all fracking projects, which would include rules relating to flow-back fracking fluids and deposit water.
- In addition, the federal states shall be entitled to introduce further regulatory options as part of their regional development plans.
The government stated that the new regulations would be presented to the Federal Cabinet in November 2014. However, at the time of publication of this paper it is not that the government will adhere to that timetable.
For the time being, fracking projects have to be approved by the competent state mining authorities pursuant to existing (unchanged) mining law provisions. This in principle means that — from a purely legal point of view — fracking projects may be permissible.
Under the current regime, the Ordinance on Environmental Impact Assessments Concerning Mining Projects (UVP-V Bergbau) provides for the environmental impact assessment of commercial mining projects that extract more than 500 tonnes of crude oil or 500,000 cubic meters of natural gas. However, an expert opinion commissioned by the Federal Environment Agency in August 2012 came to the conclusion that Directive 2011/92/EU on the assessment of the effects of certain public and private projects on the environment takes priority over UVP-V Bergbau, arguing that it has to be examined in every single case whether an environmental impact assessment is necessary.
Furthermore, in reality political opposition also affects new fracking projects. Already in 2012 the state of North Rhine-Westphalia decided to stop granting permits for fracking for the time being, citing insufficient information about the technology and possible risks to the environment. The government of state of Lower Saxony, which has some of the highest gas resources in Germany, has meanwhile countered by presenting a draft of a decree allowing fracking under strict conditions in March 2014.
It remains to be seen how the political process will ultimately play out, or court decision will provide further guidance.