From the GWPF: How Fracking Helps America Beat German Industry
Germany is set to lift its ban on fracking as early as next year, after caving in to business demands that it should reduce its dependency on Russian energy and boost competitiveness with US manufacturers. 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.
–Jeevan Vasagar, Financial Times, 5 June 2014
1) Greens Lose Battle As Germany Prepares To Lift Ban On Fracking – Financial Times, 5 June 2014
2) And Here’s Why: How Fracking Helps America Beat German Industry – Reuters, 2 June 2014
3) U.K. Government Proposes Law to Make Shale-Gas Drilling Easier – Bloomberg, 4 June 2014
4) 50 British Scientists Call On Government To Fast-Track Fracking – The Guardian, 5 June 2014
5) Europe Cooling: EU Omitting Climate Change From Agenda In Energy Security Push, Prescott Warns – Bloomberg News, 4 June 2014
The green mantra is a European obsession. It’s a quasi-religious belief system that is very difficult to shift, very entrenched, in some countries more than others, and it is holding back development. My feeling is, given Europe’s economic crisis and the potential economic benefit of shale, it’s only a question of time that the Continent will also exploit its resources. It might take one country to lead, but once the shale gas is coming out of the ground in big enough volumes and countries start benefiting from it, others will follow – it’s inevitable. –Benny Peiser, Europe Will Come Around, Natural Gas Europe, 21 February 2013
Thanks in large part to Germany’s decision to phase out nuclear power and push into green energy, companies there now pay some of the highest prices in the world for power. In the United States, electricity prices are falling thanks to natural gas derived from fracking. Peter Huntsman, chief executive of the family firm, calls the United States the new global standard for low-cost manufacturing. Huntsman is spending hundreds of millions of dollars to expand in the United States, and rapidly closing plants in Europe. That’s a dramatic change from just a few years ago, when Germany was held up as a model of manufacturing prowess. –Christoph Steitz and Ernest Scheyder, Reuters, 2 June 2014
German Chancellor Angela Merkel’s energy policies – designed to sharply boost the share of renewables in Germany’s energy mix, tackle climate change and cut Germany’s dependency on foreign gas and oil – are a rising source of concern for the country’s industry, particularly energy-intensive companies like Wacker. According to Germany’s Chamber of Commerce and Industry, half of the country’s industrial companies believe their global competitiveness is threatened by Germany’s energy policy, and a quarter of them are either shifting production abroad or considering doing so. –Christoph Steitz and Ernest Scheyder, Reuters, 2 June 2014
The U.K. government will introduce a law to make exploring for shale oil and gas easier. In a speech setting out the government’s legislative plans for the next year, Queen Elizabeth II said a bill would be proposed to “enhance the U.K.’s energy independence and security by opening up access to shale and geothermal sites.” David Cameron’s government wants the development of shale reserves to replace aging North Sea fields and cut energy costs. The U.K. estimates areas in northern England may hold 1,300 trillion cubic feet of natural gas, enough to meet demand for 50 years at an extraction rate similar to U.S. fields. –Nidaa Bakhsh, Bloomberg, 4 June 2014
A group of 50 academics from some of the UK’s leading universities today call on politicians to fast-track a UK shale gas industry, the latest salvo in an increasingly polarised debate around fracking. In a letter to the Guardian on Thursday, the scientists argue there are “undeniable economic, environmental and national security benefits” from shale being produced in the north-west of the country. –Terry Macalister, Damian Carrington and Patrick Wintour, The Guardian, 5 June 2014
1) Greens Lose Battle As Germany Prepares To Lift Ban On Fracking
Jeevan Vasagar
Germany is set to lift its ban on fracking as early as next year, after caving in to business demands that it should reduce its dependency on Russian energy and boost competitiveness with US manufacturers.
Applications to carry out the controversial process for extracting the country’s estimated 2.3tn cubic metres shale gas reserves will be subject to an environmental impact assessment under new legislation to be discussed by the cabinet before the summer recess.
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”. […]
The EU’s energy commissioner Günther Oettinger has urged European governments to allow fracking “demonstration projects” to diversify the continent’s sources of energy.
Full story (subscription required)
2) And Here’s Why: How Fracking Helps America Beat German Industry
-Christoph Steitz and Ernest Scheyder
Nestled in the green hills of southern Germany, chemical giant Wacker Chemie churns out a wide range of product, from an ingredient for chewing gum to the polysilicon crystals in solar cells.
The electricity to produce all that – enough power for more than 700,000 households annually – has become more costly at Wacker’s main factory in Burghausen. It has played a big part in pushing up the firm’s total energy bill by 70 percent over the last five years, to nearly half a billion euros.
It’s a different story across the Atlantic in the U.S. state of Louisiana. There, chemicals maker Huntsman Corp pays 22 percent less for its power than it did just seven years ago.
The tale of those numbers underlines a profound shift underway in two of the world’s biggest industrial powers. Thanks in large part to Germany’s decision to phase out nuclear power and push into green energy, companies there now pay some of the highest prices in the world for power. On average, German industrial companies with large power appetites paid about 0.15 euros ($0.21) per kilowatt hour (kWh) of electricity last year, according to Eurostat, the European Union’s statistics agency.
In the United States, electricity prices are falling thanks to natural gas derived from fracking – the hydraulic fracturing of rock. Louisiana now boasts industrial electricity prices of just $0.055 per kWh, according to U.S. Energy Information Administration data.
Peter Huntsman, chief executive of the family firm, calls the United States the new global standard for low-cost manufacturing. Huntsman is spending hundreds of millions of dollars to expand in the United States, and rapidly closing plants in Europe. The company estimates that a large, modern petrochemical plant in the United States is $125 million cheaper to run per year than in Europe. That sum includes cheaper power, waste disposal and myriad other factors, and Huntsman said the contrast is similar for Asian plants.
That’s a dramatic change from just a few years ago, when Germany was held up as a model of manufacturing prowess. As recently as 2011, politicians in Washington were openly discussing how to copy Germany’s success.
“We need to be more like Germany,” General Electric Chief Executive Jeffrey Immelt said in an interview that year with Reuters.
Now things are heading the other way. German Chancellor Angela Merkel’s energy policies – designed to sharply boost the share of renewables in Germany’s energy mix, tackle climate change and cut Germany’s dependency on foreign gas and oil – are a rising source of concern for the country’s industry, particularly energy-intensive companies like Wacker. According to Germany’s Chamber of Commerce and Industry, half of the country’s industrial companies believe their global competitiveness is threatened by Germany’s energy policy, and a quarter of them are either shifting production abroad or considering doing so. The United States is among the top destinations.
In March, BMW, the world’s largest luxury carmaker, said it would invest $1 billion to expand its plant in Spartanburg, South Carolina, making it the German group’s biggest production facility by 2016. In all, German companies invested more than 800 billion euros in U.S. expansions between 2008 and 2012, according to the most recent Bundesbank statistics. Germany’s Chamber of Commerce and Industry reckons that investments could reach 200 billion euros in 2014, an all-time high.
3) U.K. Government Proposes Law to Make Shale-Gas Drilling Easier
Nidaa Bakhsh
The U.K. government will introduce a law to make exploring for shale oil and gas easier.
In a speech setting out the government’s legislative plans for the next year, Queen Elizabeth II said a bill would be proposed to “enhance the U.K.’s energy independence and security by opening up access to shale and geothermal sites.”
Today, companies planning to drill onshore need to obtain consent from every landowner whose property a well may pass under. The new law will remove the need for this permission, the government said. Drilling for shale often involves horizontal wells that run for hundreds of meters, so can pass under several different properties.
David Cameron’s government wants the development of shale reserves to replace aging North Sea fields and cut energy costs. The U.K. estimates areas in northern England may hold 1,300 trillion cubic feet of natural gas, enough to meet demand for 50 years at an extraction rate similar to U.S. fields.
The proposed legislation will bring the sector in line with the mining industry and have “no noticeable effect on the lives of home and property owners,” the U.K. Onshore Operators Group, an industry body, said in a statement.
4) 50 British Scientists Call On Government To Fast-Track Fracking
Terry Macalister, Damian Carrington and Patrick Wintour
A group of 50 academics from some of the UK’s leading universities today call on politicians to fast-track a UK shale gas industry, the latest salvo in an increasingly polarised debate around fracking.
In a letter to the Guardian on Thursday, the scientists argue there are “undeniable economic, environmental and national security benefits” from shale being produced in the north-west of the country. The move comes just days after Sir Paul McCartney and 150 other celebrities called on the government to immediately halt all drilling operations on the grounds that they could damage the environment. New measures were included in the Queen’s speech to allow shale companies to drill more easily under people’s homes. The government, aware of the risk of a backbench rebellion and the threat of legal actions, stressed any proposals to reform the trespass laws were “entirely dependent on the outcome of a government consultation”.
Cameron assured MPs that the measures would not impact on anyone’s garden, with his officials saying any digging would take place at a minimum of 300m underground with compensation provided to local communities.
[The letter] says: “As geoscientists and petroleum engineers from Britain’s leading academic institutions, we call on all political and decision-makers at all levels to put aside their political differences and focus on the undeniable economic, environmental and national security benefits on offer to the UK from the responsible development of natural gas from Lancashire’s shale.”
5) Europe Cooling: EU Omitting Climate Change From Agenda In Energy Security Push, Prescott Warns
Alex Morales and Ewa Krukowska
The European Union risks losing ground in the fight against climate change as it tries to shore up energy security in response to concerns about dependence on Russian gas, said John Prescott, the bloc’s lead negotiator for the 1997 Kyoto Protocol.
The annexation of Crimea by Russia has pushed the issue of energy security to the top of the European political agenda as the 28-nation bloc devises plans to cut reliance on natural gas imports from Russia’s OAO Gazprom. That risks overshadowing the debate about cutting greenhouse gases, according to Prescott, former deputy prime minister of the U.K.
“The great danger is it’s all becoming energy security,” Prescott said. The meetings will aim to isolate Russia, and “will have nothing to say on climate change.”
The EU’s energy dependency rate is set to rise to 80 percent by 2035 from 60 percent, according to the International Energy Agency. Russian gas met about 30 percent of EU consumption last year, according to Gazprom. The European Commission on May 28 presented a draft energy security strategy that EU heads of state will discuss during two days of meeting starting June 26 in Brussels.
Juergen Lefevere, a negotiator for the European Commission at the latest round of UN climate talks that began yesterday in Bonn, said the EU has set out a clear timeline to decide on new climate goals.
Striking Balance
“I haven’t seen that risk materialize in any of the EU discussions that I’ve been aware of so far,” Lefevere said in an interview. “There is a balance between energy security concerns and climate concerns, and that balance is very carefully kept.”
The bloc in October aims to decide on an energy and climate-change package laying out targets through 2030. The commission, the bloc’s regulatory arm, in January proposed cutting emissions by 40 percent by 2030 from 1990 levels, up from a 2020 target of 20 percent.
At the same time, a bloc of eastern and central European nations, led by coal-reliant Poland, say they won’t support those targets without a “fair” distribution of the effort.
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Germany is set to lift its ban on fracking as early as next year, after caving in to business demands that it should reduce its dependency on Russian energy and boost competitiveness with US manufacturers.
I’m not sure it’s about caving in to business demands, rather it’s about practical necessity and resistance to phony scares.
“a well-meant EU policy that failed”
Perhaps he should have said “another of the dozens of well-meant EU policies that have failed”
See piece over at BH on neonicitinoids and bumblebees.
Michael Palmer – let’s remember that VW, corporately, can’t break wind without the permission of the government of Lower Saxony.
Further, let’s remember that VW is not just VW – it’s VAG, including Audi, Seat, Skoda, Lamborghini, Bugatti, Bentley* and now Porsche** plus probably a bunch of other auto and non-auto operations I’m forgetting or ignorant of.
* – somewhere there’s an unemployable lawyer, VAG thought they were buying Rolls-Royce, they did get the plants and the designs and the Bentley name but BMW figured out that the automaker didn’t own the RR name, zipped in and bought it from – Vickers?
** – mouse tried to eat elephant, elephant sneezed and swallowed mouse.
Looks like the ebb-tide for the German Green movement has set in. This is handwriting on the wall-
“You have been weighed in the scales and you have been found lacking”.
I just love hearing John Prescott whinge that energy security trumps climate change! Makes up for the fact that old “two jags” (his nickname from his time as UK deputy Prime Minister when he famously used one of his two jaguar cars to drive 250m from a hotel to a conference) has got some EU sinecure.
JEM says:
June 6, 2014 at 8:28 am
Michael Palmer – let’s remember that VW, corporately, can’t break wind without the permission of the government of Lower Saxony. …
—
Well, VW was just an example.
The contribution of manufacturing to GDP is roughly twice higher in Germany than in the US or the UK – that wouldn’t be the case without broadly sustained investment at home. It’s not politically enforced, primarily – it is a cultural thing.
Helium says:
June 6, 2014 at 5:49 am
“Well, i’m from Germany and i would like to say “Abwarten und Tee trinken” (Sceptical version of “Wait and see”). I’m not convinced that this is the last word on this topic. I have ample experience with the persistence of the green movement in Germany (I’m now in nuclear engineering).”
They’re old and disorganized – the Maoist leaders, Trittin, Kretschmann, Fischer are gone, Kretschmann has his fiefdom in Stuttgart for the time being and it will be Good Riddance in the next election; Greenpeace lost their psychopath leader McTaggart 12 years ago… Little more than controlled opposition left – paymaster now NATO instead of the KGB; agenda now organizing mass immigration – doing the bidding of the EU commission -, not anything “green”…
Fracking is about to go fracking wild all around the Baltic.
Rob:
I hold no brief for John Prescott, but in the interest of fairness I point out that at the time referred to above he owned an elderly Jaguar, i.e. it was his personal property, and he also had the use of a government owned one to use on official duties.
Anyone who owns a classic Jag can’t be all bad, can they?
What’s the fuss? EU is on its way to meet green targets as is. Once the main automakers, chemical manufacturers, glass makers, foundry’s…. anyone needing energy for manufacturing moves to the US they’ll exceed the target. Energy security? Fit cows and vegetarians with methane collectors that can be offloaded at convenient receptor sites or easily pumped into their gas burning cars and tractors. Probably a policy for bean production would help, too.
No one should get too excited about this yet. There are certainly no guarantees that any of these shales would prove economical and you definately can’t expect a government organization to accurately predict estimated recoveries. At least it’s a sign they are abandoning ludacris policies.
Robert W Turner says:
June 6, 2014 at 11:05 am
“No one should get too excited about this yet. There are certainly no guarantees that any of these shales would prove economical ”
Robert, gas prices in the EU are about 5 times the prices in the US, so that will not be a problem at all. EU commission can still regulate it to death, of course. They’re good at that.
Hollande still says no fracking in France.
Remember who runs Barter Town? It was the guy who control the gas!
SandyInLimousin: France doesn’t need fracking, they have nuclear.
M Simon says:
June 5, 2014 at 10:00 pm
President Insanity will do what he can to end fracking in the US.
Expect the EPA to go after fracking by claiming it’s hazardous to ground water.
They are also likely to start regulating the use of the chemicals used in fracking.
“The contribution of manufacturing to GDP is roughly twice higher in Germany than in the US or the UK – that wouldn’t be the case without broadly sustained investment at home.”
I thought it was because German banks spent much of the last decade lending money to Greeks (either directly, or by buying Greek debt) so they could buy Porsches?
Vendor financing schemes tend not to work too well in the long run.
MarkG says:
June 6, 2014 at 8:47 pm
“I thought it was because German banks spent much of the last decade lending money to Greeks (either directly, or by buying Greek debt) so they could buy Porsches?”
Of course that helps the German industry. They are not invulnerable – Back in the late eighties, German Mittelstand Maschinenbau companies – which are the backbone of the car industry supply chain, and of the automation in the car factories – were seen as unprofitable yesterday’s heroes – they were suffering from the strong D-Mark.
Germany solved that problem first by swallowing East Germany, and next, by swallowing the EU – currency-wise. Both times, the currency was weakened by transfer payments to the underdeveloped areas in the currency union.
BTW China does the same thing with the USA. Their Yuan is pegged to the Dollar, so it is a de facto currency union.
It seems this is the game you have to play when you want to develop your country under conditions of non-protectionism. You might end up printing a lot of paper currency, and devaluing it, but at least your industry is running red hot – which it currently is over here.
http://www.voltairenet.org/IMG/pdf/Hydraulic-Fracturing-Chemicals.pdf
and in France it is not allowed, but TOTAL as an agreement and they are going to do it in Algéria
!!!!!
SandyInLimousin says:
June 6, 2014 at 1:19 pm
Hollande still says no fracking in France.
I Don’t trust him – wait and see what his prévious girlfriend segolène will do
anyway, Fabius went to Algéria and Boutteflika is ready to accept francking and “Total”, on his soil – wait for the reaction of the people ??
It looks like Russian military adventurism in Ukraine is achieving in the fracking debate what no amount of reasoned technical argument would have achieved. Russia saves Europe from itself again – albeit unintentionally.
to became a member of the european union was the ukrainian problem, so it is partly the fault of the european union –
Now, we did not really want this europe – and we hope to get rid of it as soon as possible – we consider Jean Monnet and Schuman as traitors – and their followers as well.
People who support fracking deserve to live in areas where fracking occurs and drink the water that fracking contaminates. They also deserve free fruit and vegetables from Monsanto and Chicken nuggets processed in China.
Mic Theory,
What a mindless comment. People are living longer, healthier lives because of companies like Monsanto. And fracking harms no one. That is the basic reason why the econuts lost this battle.
Only those who don’t give a damn about the world’s poor oppose fracking and fossil fuels. Those energy sources are far cheaper than alternatives like windmills, which could not even compete if not for immense subsidies.
It is clear that the ‘green’ contingent is on the side of the 1%. Every action they take makes it more expensive for the average person, and for most things they have no skin in the game. It’s pretty despicable when a group does what it can to make life miserable for the world’s poor, no? That’s how I see it.
frackiing harms no one ………
http://www.voltairenet.org/IMG/pdf/Hydraulic-Fracturing-Chemicals.pdf