The natural gas and oil industry in Germany produced smaller quantities from domestic sources in 2022, despite the increased demand for raw materials due to the energy crisis. In view of the fact that production has been declining for years, she now wants to focus more on more promising businesses – such as geothermal energy, the production of hydrogen or the storage of CO2. The Federal Association for Natural Gas, Oil and Geoenergy (BVEG) is also calling for a new, “sufficiently informed” debate on the possibilities of fracking technology.
The volume of natural gas extracted in Germany decreased from around 5.2 billion cubic meters (2021) to 4.8 billion cubic meters last year, as the BVEG reported in Hanover on Tuesday. The development of crude oil was similar, with domestic production falling from around 1.8 million tons to 1.7 million tons. According to information from the industry, about 5.5 percent (gas) and 2 percent (oil) of domestic demand can still be covered from these quantities.
National gas share increased slightly in 2022
“Our options are limited,” said association chief Ludwig Möhring. After all, the national gas share increased slightly in 2022. However, the trend towards declining self-funding continues.
It used to be up to 20 billion cubic meters of gas or more per year in Germany, but the reserves in conventional deposits are increasingly being exhausted. Möhring pointed out – as he did shortly after the start of the war in the Ukraine last spring – that the German gas producers wanted to continue to play their part in the supply. The prices for fossil raw materials, which are still very high, would only fall if the supply expanded.
Möhring suggested a sober assessment of improved processes for obtaining bound gas with fracking: “The energy crisis makes it all the more clear that we have to rethink this potential. This includes a balanced decision regarding the shale gas option.”
Imported LNG partly from fracking
Large quantities of liquefied natural gas (LNG), which Europe imports from the USA, are produced there in this way. The ramp-up of renewable energies alone – “however important it is” – will not be enough for the time being. In the meantime, Germany will continue to need gas, in connection with the nuclear phase-out and the planned coal phase-out, also to generate electricity.
“Germany trusts in others. Of course you can do that,” said Möhring, as long as you accept dependencies. He criticized the fact that large parts of politics “don’t even bother” to think again about the use of more environmentally friendly fracking approaches: “An objective analysis is nipped in the bud.”
According to BVEG estimates, the volume could theoretically be increased to up to a fifth of Germany’s gas requirements by enclosing shale gas. Lower Saxony’s Prime Minister Stephan Weil (SPD) spoke out against the funding method and exchanged blows on this issue with his Bavarian colleague Markus Söder (CSU). Federal Finance Minister Christian Lindner (FDP) campaigned for an entry if ecologically acceptable fracking is used. Gas wells are often criticized because of other concerns – for example, they can sometimes trigger minor earthquakes.
Domestic natural gas with a better overall CO2 balance
When it comes to natural gas, it is risky to only “bet on the global LNG markets,” said Möhring. In the overall CO2 balance, domestic gas also performs better than LNG imported by tanker. The federal government “reacted in an impressive way” when setting up the first floating terminals. However, the issue of the availability of sufficient gas is different from the issue of future price developments. “And so far there can be no talk of normality at all.”
The price level, which is still high compared to the time before the Ukraine war, is “poison for our economy”. Möhring said he expects there will be no bottlenecks next winter. “Familiar deliveries from the Netherlands, Norway and Germany, together with the LNG, will probably be able to compensate for the Russian quantities. But at what prices? That’s another question.”
Gas and oil producers are hoping for opportunities from the establishment of a hydrogen economy. “Blue” hydrogen can be produced from methane – not as climate-friendly as “green” hydrogen from water with green electricity, but this is an important additional variant, according to Möhring. There must be an “objective discussion” about the underground storage of CO2. For the expansion of the use of geothermal energy, the industry can contribute knowledge and old boreholes.
