Berlin One wants to “strengthen domestic natural gas production”, was the most important sentence from the point of view of an entire industry in the draft for the latest relief package from the traffic light coalition. But in the version that was finally decided on Wednesday last week after several hours of negotiations, the sentence no longer appears.
The hopes of the German natural gas industry to expand natural gas production in Germany again were thus dashed.
Behind the scenes it is said that the Greens have backed down. In view of the geopolitical upheavals resulting from the Ukraine war, they are forced to make major concessions anyway. An expansion of domestic gas production cannot be expected of them.
Natural gas companies are disappointed. “It would have been obvious that the traffic light coalition would take domestic gas production into account in its relief package. We would be well advised to take any options for additional natural gas capacity very seriously. This also includes domestic resources,” said Ludwig Möhring, General Manager of the Federal Association for Natural Gas, Oil and Geoenergy (BVEG), the Handelsblatt. In view of the tense supply situation for natural gas and the heavy dependence on Russian supplies, politicians at the federal and state levels must set new priorities.
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Möhring believes it is realistic “under favorable conditions to increase the share of in-house production in natural gas consumption from the current five to six percent”. In view of the tense supply situation, one should not underestimate this contribution either. “We’re talking about three-quarters of the total demand for a federal state like Lower Saxony,” said Möhring.
20 years ago, a fifth of gas consumption came from domestic production
In 2001, according to the BVEG, 21 percent of gas consumption in Germany came from self-production; in 2011 it was 14 percent. There are various reasons for the continuous decline in funding. The key factor is that stocks are running low.
On the other hand, the decline is also the result of socio-political debates and the tightening of the approval procedures. “We’re talking about an industry that has had its back against the wall for years, especially when it comes to new projects because the extraction of fossil fuels in its own country no longer seemed opportune. In fact, we should restructure our raw materials strategy as a whole,” said Möhring.
The negative attitude in large parts of politics has so far meant that considerable potential remains untapped. For example, the Dutch gas exploration company One-Dyas has been trying for years to get approval for a production project in the German-Dutch border area of the North Sea.
The deposit is estimated at 60 billion cubic meters of natural gas, half of which is stored in the Dutch part of the field and the other half in the German part. The funding platform should be on the Dutch side. To put this into perspective: 60 billion cubic meters corresponds exactly to the amount of natural gas that was routed through the Nord Stream 1 Baltic Sea pipeline last year, according to the operator.
Lower Saxony is changing: new opportunities for funding in the North Sea
While the Dutch authorities have given the green light, little is happening on the German side. The case is met with growing incomprehension by some politicians in the traffic light coalition.
The energy policy spokesman for the FDP parliamentary group, Michael Kruse, calls for the issue to be reassessed in view of the bottlenecks in the gas supply: natural gas production in the North Sea is “an important element for more independence in the gas supply”. In addition, domestic production is the best way to control the ecological conditions. It is therefore in the interests of all coalition partners to advance gas production in the North Sea as quickly as possible.
BVEG General Manager Möhring also emphasizes this argument: “The funding in Germany meets the highest environmental standards. In this respect, funding in this country also has undeniable advantages for reasons of climate and environmental protection. Natural gas that comes to us from afar has a significantly higher CO2 footprint,” said Möhring.
However, the coalition agreement of the traffic light in the federal government excludes a project like that of One-Dyas. The contract states: “We do not want to issue any new permits for oil and gas drilling beyond the framework operating permits granted for the German North Sea and Baltic Sea.”
On the German side, Lower Saxony is responsible for approving One-Dya’s application. The Lower Saxony state government and the Lower Saxony state parliament have so far rejected the Dutch company’s exploration project.
However, under the impression of the geopolitical tensions caused by Russia’s invasion of Ukraine, a change of heart seems to be taking place in Lower Saxony. In any case, Lower Saxony’s Economics Ministry, which is headed by CDU politician Bernd Althusmann, is rethinking: “Almost all energy policy certainties have been thrown overboard since February 24,” said a ministry spokesman, referring to the day Russia invaded Ukraine .
Security of supply comes to the fore
“Against the background of the new geopolitical realities and the associated question of German energy supply security, we have reassessed the topic. In order to reduce dependence on Russian gas, natural gas production from domestic sources and in our neighboring countries is a building block,” he said. His house is therefore in talks with One-Dyas.
“Particular importance is attached to points such as the greatest possible nature conservation, consistent monitoring of the environmental impact, compliance with the established safety standards, a clearly defined funding period and, last but not least, the question of what contribution the project can make to increasing the security of energy supply in Germany”.
A final decision by the state mining authority in Lower Saxony, which is responsible for the approval, is still pending. “The process is ongoing, and there is no end in sight,” said a spokesman for the agency.
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