Gasland Germany: state of play

INTERNATIONAL SHALE GAS AND OIL JOURNAL VOLUME 2 | ISSUE 1 | FEBRUARY 2014 INTERNATIONAL SHALE GAS AND OIL JOURNAL Editorial : It is time to screen the thruth about shale gas 3 Izabela Albrycht Special : FrackNation: a thruthful response to Gasland 4 Phelim McAleer In a nutshell : Shale Gas Argument Map. Debate on shale gas in the EU 6 Yvonne Schavemaker Exclusive : As Europe and the UK debate shale gas, what role could it play in the UK energy mix? 8 Dan Byles The geostrategic implications of the shale gas revolution for the European Union 12 Alan Riley Environmental risks of shale gas development 18 Alan Krupnick, Hal Gordon & Sheila Olmstead Putting the science bak into the public shale gas debate 23 Todd Flach, Lars Sørum & Richard E. Green Analysis of potential benefits of gas extraction for municipal finance and wealth of local communities in Poland. 28 Łukasz Pokrywka VOLUME 2 | ISSUE 1 | FEBRUARY 2014 Polish shale gas deposits in relation to selected shale gas prospective areas of Central and Eastern Europe 33 Przemysław Karcz, Marcin Janas & Ireneusz Dyrka Gasland Germany: state of play 46 Marco Althaus Country reports: the Netherlands and Poland 59 INTERNATIONAL SHALE GAS AND OIL JOURNAL VOLUME 2 | ISSUE 1 | FEBRUARY 2014 2 The International Shale Gas & Oil Journal (ISG&OJ) is a quarterly journal on shale gas and oil developments in politics, economic, regulatory, tax & legal areas for practitioners and academics in the field. The journal draws on the experiences in USA, Canada and China, but the focus is mainly on Europe. ISG&OJ updates on EU and national level legislation, outcomes of research on shale gas and oil potential by geological national surveys, reviews on developments and perspectives per EU country with a hint of the political state of play, business developments with regard to new market entrants and concessions trading in the EU, conclusions of expert reports released by think tanks, international and national expert organizations, opinions expressed by the EU and governments officials EU and governments officials, lawyers, scientists, IOC’s and NOC’s, regulators. Chief editor : Izabela Albrycht Political scientist; chairperson of the board of the Kosciuszko Institute, Poland Editorial board : Morgan Bazilian International Institute for Applied System Analysis, Laxenburg, Austria Ascha Pedersen United Nations Industrial Development Organisation, Vienna, Austria Michael Bennett Partner, Baker Botts, Houston, USA Rene Peters Director Gas Technology, TNO Delft, Netherlands Flavia di Stefano Lawyer, Brussels, Belgium Mark R. Robeck Partner, Baker Botts, Washington, USA Brian Horsfield Helmholtz-Zentrum, Potsdam, Germany Iryna Lendel Assistant Director, Center for Economic Development, Maxine Goodman Levin College of Urban Affairs, Cleveland State University, Cleveland, USA Cécile Musialski Partner, Philippe & Partners, Brussels, Belgium Alan Riley Professor, City Law School, Grays Inn, London, UK ISSN : 2214-2320 Subscription info : Published by : Claeys & Casteels Law Publishers bv P.O. 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This publication, in whole or in part, may not be copied, reproduced, nor transmitted in any way without the written permission of the publisher 2014/2 ISG&OJ 46 Gasland Germany: state of play Marco Althaus Technical University of Applied Sciences, Wildau, Germany 1. Introduction Germany is at unease with its unconventional gas, and for three years has restlessly grappled with controversy over hydraulic fracturing. But contrary to popular assumptions and news reports, the country has not banned the technology. In place are moratoria, but of distinctly political nature. They are based on a tacit accord with leading firms like ExxonMobil and Wintershall, strategically working toward a renewed social license to operate. They accept that public acceptance takes time to form. They could do otherwise: Mining law has kept fracking permits legally accessible, as it has been in the past half-century. What is new for Germany is the search for shale gas and coalbed methane (CBM). Tight gas and fracking are not so new. The country co-pioneered fracking in the 1950s, authorized it more than 300 times for gas development, and used it for tight gas fields since the 1990s. Drilling and fracking for shale gas was even state-promoted before the public trouble began in 2010. The political overlay has certainly changed since. An anti-fracking movement emerged and allied with a potent coalition of economic interests, pushing federal and state governments to struggle with issues of what the International Energy Agency has called “Golden Rules for a Golden Age of Gas.” A federal bill to adjust mining and environmental law failed spectacularly be- fore the 2013 national elections. Angela Merkel’s new coalition now has to engage in the mission again. Policymakers and industry lack enthusiasm for unconventional gas. It is assumed to generate mostly hazards, not opportunities, and to not to help with pressing problems of Merkel’s “Energiewende,” a Herculean task to phase out nuclear power by 2022 and make Germany a vanguard of renewable energy. Gas has a transition role to play. But the unconventional novelty is at best a sideshow in “Energiewende” economics, a high-stakes, high-cost adventure for industry, consumers and taxpayers. Also, a new reality sinks in: After 20 years of CO2 output drop, emissions rise again as power plants burn as much cheap import coal as they can. Germany is “back in the club of climate killers” (n-tv, 2013). Unconventional gas advocates have been unable to profit from the context. This article stakes out the natural gas industry context, discusses mining law and fracking moratoria. It explains how an attempt to revise the framework was lost in federalism, deranged by a grassroots movement, and derailed by a coalition of organized economic interests. The article then examines the industry’s response. It offers an analysis of the 2013 grand coalition agreement, and concludes with a political outlook. The article is based on qualitative research, utilizing news databases, Internet retrieval of media reports, government and organizations’ documents and commentary. The author has participated in several gas industry conferences and topic-related public events. For background, the author has conducted, in Germany, Brussels, and other European locations, interviews with representatives of firms, industry associations, NGOs and campaigning groups, and government authorities; 13 were in-depth and 45 more informal, all under off-the-record conditions, so they will not be quoted. onMobil, GdF Suez and RWE-Dea followed. The state has no record of any environmental or other damage (Lies, 2013). 2. Past and promise 2.1 Natural gas in Germany Still, Germany is the EU’s third-largest gas producer after the Netherlands and the UK. Its largest producers are BEB, RWE Dea, Mobil, GDF Suez, and Wintershall (WEG, 2013a, p. 7). Leading firm BEB, a century-old enterprise and a 50/50 Shell/Exxon joint venture, lets ExxonMobil operate its fields (BEB, 2013). Thus, the U.S. giant has a de facto production share of nearly 70% (ExxonMobil, 2013b). “Energiewende” economics have not been a boon to the gas industry. Efficiency gains have slowed heating demand. Gas-fired power generation is less profitable: Gas prices are high, electricity prices down as competition from market-privileged and subsidized renewable sources (wind, solar, and also biogas) grid feed-in is harsh. Conventional power plants are on overcapacity. Billions of euros spent on efficient yet expensive gas facilities have been wasted as they are shut down or put on reserve; new investments are on hold (Plusminus, 2013). This is not a friendly context for gas business. 2.2 Hydraulic fracturing While hydraulic fracturing for shale and CBM has only been attempted once each (BGR, 2013c, p. 12), it has long been employed upgrade conventional yields. Fracking premiered in 1955 in oil fields of Schleswig-Holstein state (MELUR, 2013). Neighboring Lower Saxony lists 326 frac jobs in gas fields from 1961 to 2011 (LBEG, 2013). Wintershall was first to frack, Exx- Perception and issue saliency changed in late 2010, for which credit belongs to the U.S. film, Gasland. For long, Germany has mostly not debated its own fracking record but America’s, often through the lens of Gasland-induced reports. Germans also pay some attention to other EU experiences. Hydraulic stimulation is used in German geothermal energy projects, which have witnessed a boom in the past decade. Two dozen projects are in place, about 60 are under construction or in planning (GtV, 2013). Despite differences in the method, “geothermal fracking” has been often put in the context of gas well fracking. Geothermal seismic activity has given rise to public concerns, too. 2.3 Unconventional gas German shale gas, tight gas, and coalbed methane deposits lie mostly in the Northwest, i.e. in states Lower Saxony, Schleswig-Holstein, and North Rhine-Westphalia. Others lie in central states Hesse, Saxony-Anhalt, and Thuringia, and in the Southwest, Baden-Württemberg. In an ongoing study, the Federal Institute for Geosciences and Natural Resources (BGR) examines such deposits, focusing on shale gas and oil. A BGR 2012 interim report saw shale gas-in-place at a median 13tcm, technically recoverable reserves at 10% of that 47 Gasland Germany: state of play Natural gas supplies 22%of primary energy consumption (BMWi, 2013). Germany employs gas for manufacturing, for electricity, and for heating half of residential households use. Coupled with European pipelines, a developed midstream gas pipeline and storage infrastructure is in place. A high-capacity domestic grid extends 477,000 km (BDEW, 2013b). In 2012, Germans used 93bcm of gas. 88% was imported. Of the imports, 38% were sourced from Russia, 35% from Norway, 22% from the Netherlands, 5% from other countries. Inland supply, at 11bcm, decreased to 12%; a decade ago, domestic share was 20% (WEG, 2013c, p. 4). A third of gas production, i.e. two million households’ supply, today is from fracked wells (Dürand & Matthes, 2012). Industry claims fracking has been key to compensating for inland production decline; in turn, fracking moratoria since 2011 have sped up decline of conventional output (WEG, 2013c). The argument rests on defining tight gas as conventional. Tight gas in Lower Saxony’s sandstone evolved into a key target in the mid-1990s, and fracking into a routine technique. In 1995 Exxon prided itself of a tight gas “world record project” with multiple fracs and horizontal drilling (ExxonMobil, 2013c). When the firm, working with universities, opened a tight gas source using frac jobs in 2006, it was awarded a prestigious federal “Land of Ideas” innovation prize (LdI, 2006). That was celebrated with hundreds of local dignitaries. Back then, fracking was a reason to party, not protest (Müller, 2013). 2014/2 ISG&OJ All quoted German sources in this text are the author’s translations. 2014/2 ISG&OJ Gasland Germany: state of play 48 – ten times the conventional reserves (BGR, 2012, p. 29). Many regions have not been studied, so likely the 2015 final report will result in better data. The U.S. Energy Information Agency predicts 481bcm of technically recoverable shale gas (USEIA, 2013). Germany’s geology and regulatory regimes have always been a challenge to extraction industries, but that has incentivized continuously improved leading-edge technology. Wintershall CEO Rainer Seele, for example, sees domestic production as his firm’s “center of innovation,” making German expertise a “trump card in the global game for access to the most profitable sources” (Wintershall, 2013). Germany’s four big energy majors EON, RWE, EnBW and Vattenfall are all active in natural gas, but mostly reselling. Only RWE has domestic gas production. All four do not show much interest in home unconventionals and stay away from public fracking disputes. RWE subsidiary RWE-Dea has fracked for conventional (including tigh) gas in Germany, but says it has no shale or CBM plans (RWE, 2013). RWE CEO Peter Terium has suggested „research, exploration and testing should not be banned,“ and if anyone can make fracking eco-friendly, German engineers were the ones. But unconventional gas, he added, is a long-term perspective. „ I don’t see a readiness for larger field tests,“ said Johannes Teyssen, CEO of EON. “But we can’t categorically shrink from any new technology” (Focus, 2013). Many economists doubt commercial viability unless gas demand and prices grow drastically (von Petersdorff, 2013). Prominent economist Thomas Straubhaar (2013) has called Germany’s debate on unconventional gas debate “shadow boxing” and likened production ideas to growing bananas in the Antarctic: technically doable but business nonsense. Yet German gas producers would rather not let professors do the math for them. ExxonMobil went forward with a first shale gas project in 2008. Its related investments in Lower Saxony and North Rhine-Westphalia were in a three-digit million euro range (Matthes & Dürand, 2012). Wintershall too received permits in both states. BNK Petroleum set out to become a third big shale gas player but in 2013 closed its Hanover office and relinquished all fields in Saxony-Anhalt, Thuringia and Lower Saxony, keeping acreage in Hesse and NRW (Angerer, 2013; BNK, 2013). A dozen other firms have shown shale gas interest, among them GDF-Suez, RWE-Dea, 3Legs Resources, Dart Energy, BG Group, Realm Energy, Parkyn Energy, QGC, A-Tec, HammGas, Mingas, RAG, and Thyssen. Particularly in NRW, firms study CBM possibilities. 3. Interplay of state and federal policy 3.1 Federal mining law and the states Oil and gas neither belong to the sovereign nor landowners. They are legally ownerless, but exploring and production require public authorization. This is the “Bergfreiheit” (mining freedom) principle of German mining law. The Federal Mining Act (Bundesberggesetz) governs the balance of public, mining and landowner interests, including compensation. In gas drilling practice, firms normally lease acreage from landowners once they have authorization, and if refused, try to convince the neighbor. With a marble cake type of federalism, Germany has a complex system of shared and concurrent powers, and state participation in national lawmaking. In 1982, the Federal Mining Act replaced 16 states’ laws. But state not federal authorities implement the Act. They issue permits for exploration and production. States collect a royalty or mining tax; its rate is federally set at 10% of market value but states can temporarily adjust it from zero to 40%. Mining-relevant environmental and water law is partly a federal, partly a state domain, for example the federal Water Resource Act (Wasserhaushaltsgesetz) is a framework to which states add ordinances and oversee local execution. The Federal Mining Act does not allow states much discretion in issuing authorizations; it is rather a straightjacket. In fracking conflicts, many states wish to see an environmental impact assessment (EIA), which would invoke public stakeholder participation and give citizens and environment groups a right to sue in court. The federal law does not provide for this in the exploration permit process; for production only if daily output reaches 500,000cm, in line with EU EIA Directive (2011/92/EU). States unwilling to authorize can try bureaucratic delay tactics. Yet this can easily be challenged in court, as the Federal Mining Act’s design, based on a 1865 Prussian law, works to privilege private mining. The law allows weighing of public interest set by other laws (e.g. safety, water, soil, immissions, conservation, regional plan- BNK Petroleum, newcomer to Germany in 2009, felt no such inhibitions. It sued Hesse state in 2013, after a curious episode of bureaucratic commotion, for refusing due process. Said BNK’s counsel: At its core, the exploration permit was withheld not for factual but – contrary to an unambiguous legal situation – political reasons in the run-up to the state elections. The environment ministry has massively pressed the Regierungspräsidium [regional authority] toward this decision, even against the legal and professional opinion of the mining department [of the regional authority]. The civil servants in charge have always pointed out that BNK fulfills all requirements for a permit. Repeatedly they have protested, in writing, against an unlawful refusal. We know that from administration records. (Petermann, 2013). Media reported that BNK had been required to send copies of application files to some 100 affected municipalities with active protest groups. The ministry ordered its mining authority to solicit external geological and legal advisory opinions, which called for voluminous data collection. It was revealed civil servants ExxonMobil too is restless over two years’ standstill. “We need a reliable legal framework,” clamored CEO Kalkoffen in May 2013, suggestively adding: “Our industry is responsible and open for dialogue. But screws can be overtightened” (WEG, 2013a). Despite a shadow moratorium in Lower Saxony, in fall 2013 ExxonMobil said it was preparing fracking applications for an old tight gas site (Doeleke, 2013a). The only real option for unwilling states is to push for legal revision at the national level, working through the federal council, the Bundesrat. In Germany’s bicameral legislative setup, a state majority can propose bills or veto them. This can lead to virulent conflicts when the state chamber is dominated by different party colors than the national Bundestag majority. The key state to move a Bundesrat initiative was North Rhine-Westphalia, where anti-fracking groups had formed earliest. 3.2 State policy context In most states, the debate is rather virtual as planning has been in very early stages. Controversies have been hot in Hesse (as mentioned), in Schleswig-Holstein, and in Baden-Württemberg, the only state with a Green prime minister. Protest there centered on possible fracking near Lake Constance, which provides drinking water for a third of the state; that was categorically ruled out. The key states in the regulatory dispute are, however, North Rhine-Westphalia and Lower Saxony. North Rhine-Westphalia (NRW) Shale gas deposits stretch out across Lower Saxony’s Southwest border to the state of North Rhine-Westphalia. ExxonMobil chose NRW’s Münsterland region for investing in a new test drilling location. NRW, once famous for its coal mines, also offers coalbed methane. Unlike neighboring Lower Saxony, there is not much history of gas drilling or fracking in NRW. A notable 49 Gasland Germany: state of play Some states have declared – more or less formally – permit moratoria. They constitute a political truce between governments and industry, not legal prohibition. That is mostly not understood by the public or even most politicians. Schleswig-Holstein environmental minister Robert Habeck (Greens) has admitted a moratorium is “a sword of glass which breaks if you swing it.” Only a revised federal law would be “a sword of steel” (dpa, 2013a). Moratoria work because firms such as Wintershall and ExxonMobil informally agreed and voluntarily stopped projects. They could litigate, but it would consume time and provoke hostilities, nudging politicians toward major revisions of law. Incumbent firms have reputations and working relationships with regulators to protect, and are embedded in Germany’s corporatist culture of negotiating consensus. They placed their bets and held the lawyers back. had warned this was abnormal practice, demands were excessive, the advisory flawed, and BNK could easily sue (Amann, 2013, p. 40). The ministry summoned BNK managers to the state capital; when they did not show up, the minister suggested BNK was formally untrustworthy for authorization. Parliamentary opposition attacked the minister for opening a door to litigate. BNK said it even reserves the option to also sue for civil damages for breach of official duty (Petermann, 2013). 2014/2 ISG&OJ ning) but is at core not an environmental protection device. Then, mining authorities are often stubbornly apolitical, with a unique culture and history as an elite expert administration in the Prussian mold, and rather close to their corporate clients. Response to demands for transparency and servicing broader stakeholders has been slow (Doeleke, 2013c). 2014/2 ISG&OJ Gasland Germany: state of play 50 exception is a 1995 attempt fracking for coalbed methane by a Conoco-Ruhrkohle-Ruhrgas consortium. The project started under big cheers but showed poor results so the well was closed two years later (Klemp, 2011). A decade later, many companies acquired search permits. From 2008, authorities issued early-stage permits for 20,300 km², some 60% of NRW acreage, in 20 claim stakes (Gutachterkonsortium, 2012, p. 6). By fall 2010, firm activities, especially ExxonMobil’s fast project buildup, had stirred citizen protest. An important context is the state’s coal mining legacy. As mines are being phased out, the state is left with a billion-euro burden and a myriad of environmental and safety problems. The NRW public is highly aware of this politicized issue and skeptical of new fossil fuel extraction activities. In 2010, NRW elections resulted in a new coalition of Social Democrats and Greens. It moved to act on growing unrest. It built an all-party consensus for a project stop and an expert risk assessment. Operators agreed to wait, and the state froze application processes (MWEBWV, 2011). An expert consortium began work in late 2011, consulting with a group of water authorities and utilities, environmental associations and local citizen initiatives (Gutachterkonsortium, 2012). The final report found considerable risks. In fall 2012, the state confirmed the moratorium for an indefinite period. It also moved bills into the Bundesrat, proposing to make an EIA mandatory for any unconventional gas project; by end 2012, it had found a majority among the 16 states (Bundesrat, 2012). NRW is home to many energy-intensive manufacturers and chemical firms. The Social Democrat-Green coalition often has tensions over industrial interests. In contrast to Greens, the SPD economic affairs minister has repeatedly stressed he did not support a permanent fracking ban or categorically opposed unconventional gas exploration, and industry should be able to move slowly forward under condition of EIAs, public participation, and scientific supervision (Seiler & Klemp, 2012; Kellers, 2013). Lower Saxony Lower Saxony has been oil country for 150 years. Gas fields opened in the 1960s. In 2012, 95% of German gas (and 35% of oil) was extracted here: 10.1 bcm, or 11% of inland supply (Lies, 2013). ExxonMobil is a century-old legacy player; it produces gas at 230 sites in 70 communities (ExxonMobil, 2013a). As mentioned, fracking has been state-authorized 326 times since 1961. The history of permits makes it hard for the state to claim fracking is unsafe. The state even promoted it, creating incentives for low-permeability deposits in 2009. Coinciding with ExxonMobil’s shale project start, the state sharply reduced levies, justified by supply security, jobs, and optimized source utilization (Bode, 2011). Royalty revenues peaked in 2009 at €930 million but fell to €682 million in 2011 (MF, 2013, p. 37). For decades investors like ExxonMobil or Wintershall have been welcome in the structurally weak Northwest. Municipalities shared in growing local and state tax income, happy to accommodate the employers and corporate citizens. They donated generously to public causes from sports clubs, fire volunteers, schools, medical centers, to playgrounds, nature or road safety projects. When protests grew, local leaders disassociated themselves and even refused gifts for fear of political backlash: Opinion “capsized with remarkable speed” (Müller, 2013). The partnership climate is not what it used to be. Public trust went sour when TV exposed in early 2011 that an ExxonMobil wastewater pipeline had leaked chemicals. Soil clean-up took more than a year; the public was kept in the dark (NDR, 2011). Issues were tied to a nearby tight gas site where ExxonMobil had fracked, and a fracking scare ensued. The episode coincided with Gasland’s viral spread and protest groundswell in neighbor state NRW. Media and parliamentary opposition raised the noise level, and statewide local elections were approaching. In Hanover, the state government considered the political fallout. Despite internal conflict about a policy about-face, the state pressed ExxonMobil for a tacit understanding to stop projects and permit applications. It was a shadow moratorium. In April 2011, Exxon commenced a communication campaign, expert study and stakeholder dialogue to calm the storm in Lower Saxony and NRW. In state elections in early 2013, the conservative-liberal government lost to Social Democrats and Greens. Both had campaigned on anti-fracking. Their coalition agreement said, as long as risks were “incalculable,” an “entry into unconventional gas extraction is not At national level, Merkel’s Christian Democrats (CDU/ CSU) were internally split, with its business wing for and rural conservatives against unconventional gas and fracking. The coalition partner, the liberal Free Democrats (FDP), stood firmly on a pro position. In 2011, the opposition of SPD, Greens, and Left Party began to submit various anti-fracking bills. The governing majority vanquished all opposition bills. But their own local politicians agreed to scores of municipal anti-fracking resolutions, and Bundestag members promised constituents to take care of the problem. Stateside action further pushed Merkel’s cabinet into a corner. By mid2012, it decided it had to take action. What ensued was a tug-of-war between the two ministries in charge, extended by dueling federal agencies. Environment minister Peter Altmaier (CDU) ordered the Federal Environment Agency (UBA) to study the risks. It outsourced to consultants, who concluded “basic knowledge and data are currently missing, preventing a profound assessment of risks and technical controllability” (Meiners, Denneborg, & al., 2012, p. 10). The report called for the strictest of rules, as was expected. In the other direction pulled FDP leader Philipp Rösler, a former Lower Saxony and now federal economic affairs minister. He waved a 2012 report from the Federal Institute for Geosciences (BGR), which saw In the run-up to fall 2013 federal elections, time for lawmaking was running out. Rösler and Altmaier produced a compromise bill in February. The bill made EIAs and local water authorities’ consent a must, excluded certain sensitive water areas, and mandated disclosure of frac fluids’ content. This would be “a factual moratorium,” Altmaier said (ARD, 2013). But Rösler insisted fracking would be regulated, not banned. Companies that complied could go forward. Gas firms applauded, while the opposition fumed the coalition was playing “Russian roulette” (Kaufmann, 2013). It said the bill was a sham because it opened 80% of territory to fracking (Röhlig, 2013). The unspecified EIA was attacked as a “paper tiger;” for lack of sound data, authorities would have no standard to restrict companies. Moreover, projects with a standing permit would not be subject to an EIA (Goltz, 2013). One voice was always missing: Merkel’s. Although energy policy is her pet subject, she never put unconventional gas in a speech, major interview, or news conference. By training a physical chemist who had won a doctorate studying hydrocarbons, Merkel only once was concrete: “We have to do everything we can to avoid environmental risks,” she said. The aim was to “limit” fracking and “make the method more environmentally friendly in comparison to its current legal status” (Thurau, 2013). Unrest grew in the CDU/CSU group. Some 80 colleagues resisted the Altmaier-Rösler bill, organized by a Lower Saxony member reminded colleagues that in his state, his party had suffered high election losses in constituencies where fracking was a hot potato: “If we don’t stop this bill now, they will give us a thick ear in the campaign.” He proposed a moratorium only for 51 Gasland Germany: state of play 3.3 Federal policy making underground risks low compared to above-ground accidents. Eco-friendly fracking was to be had if planned carefully. That would “exclude uncontrolled escape of frac fluids with very high probability.” BGR added only that substituting some additives could increase acceptance. Earthquakes too were unlikely (BGR, 2012, p. 48). Rösler had the BGR evaluate UBA’s findings. The geoscientists blasted the UBA study as subjective, incorrect “at decisive points,” and ignorant of the state of the art. BGR denied there was insufficient risk data. BGR also recommended to stay off geothermal, tight gas and conventional production (BGR, 2013c, pp. 3-5). The fierce agency battle stoked the political fires. 2014/2 ISG&OJ acceptable“ (SPD, Grüne, 2013, p. 85). But the cabinet rejected a formal moratorium. The SPD economic affairs minister spoke of a “comprehensive and unbiased, open-ended examination of fracking risks and opportunities” – not just risks – and stressed that no major study had demanded a total ban (Lies, 2013). In late 2013, at a Wintershall event at a tight gas site, he said the challenge is to ecologically improve production and win public acceptance. The state would push at federal level to make EIAs and public participation mandatory for all, including conventional, fracking projects. He did not oppose fracking and shale gas research, he added, and “I do not intend my demands to sound the bell for the oil and gas industry in Lower Saxony, but to open up a future perspective. We need open communication, transparent information and understanding for the interests of others“ (MW, 2013). Next day, the state’s leading daily paper titled, “state commits to fracking” (Doeleke, 2013b). The minister issued no denial. 2014/2 ISG&OJ shale gas, exempting other fracking: “Industry should be able to live with that for now” (Döschner, 2013). The cabinet twice took the Altmaier-Rösler bill off its agenda. Merkel’s chancellery told coalition leaders to conciliate or shelve the bill (Gathmann, Rickens, & Traufetter, 2013). The FDP agreed to toughen the law proposal. Gasland Germany: state of play 52 But then states upped the ante in the Bundesrat. They signaled the Altmaier-Rösler bill would not get a state majority. The coalition pondered legislative maneuvers to force states to agree. A national law on track to enable conditional fracking would endanger state moratoriums and put states on the spot to accept a bill which contained a mandatory EIA, which many states had wanted (Goltz, 2013). Yet by June 2013 the legislative strategy was in shatters. As the campaign summer drew near, grassroots protest made CDU/CSU Bundestag members lose their nerves. In a rare parliamentary revolt, Altmaier was given no choice but to shelve the bill, to the fury of the FDP (Balser, 2013). In their 2013 election manifestos, all five Bundestag parties included fracking – and the platforms read mostly the same: safety first, exclude dangers for health and water, and get more data before any commitment. None discussed unconventional gas in friendly terms, only as a threat. Only the FDP accentuated the positive: “shale gas extraction by fracking is a chance” (Krüger, 2013). But Merkel’s coalition partner was about to lose all its Bundestag seats on election day. groups, they were even more caught off-guard when established lobby heavyweights entered the theater. Environmental groups were already on the scene, but then business and labor union interests opened a second front: energy and water utilities, farming and beverage industries. Their rollout of critical parliamentary advisories and policy briefs, news releases, interviews, public opinion polls and awareness-raising among members was unprecedented. Under this barrage, many normally industry-friendly politicians broke ranks, ran and ducked for cover. Unconventional gas spurred an unconventional alliance, finding common ground in concern over groundwater, from which Germany derives 75% of drinking water – in the North, even 90 to 100% (BGR, 2013a). Generally, in the past 20 years water issues have attained immense saliency among citizens, media, interest groups and governments. The country recently created Europe’s strictest water regime. Germans are distrustful of industrial and agricultural water use, and also of private water control. In referendums, Berlin and Stuttgart citizens forced governments to buy back privatized utilities. To the first successful EU-level European Citizens Initiative ever, “Right2Water”, Germans contributed 1.4 of 1.9 million signatures (WHR, 2013). Fighting water market liberalization, the petition drive was pushed by labor unions, municipalities and water utilities. The water lobby is well organized, water campaigns are attention-grabbers, and water issues mobilize Germans. 4. Interest group opposition 4.1 Grassroots and green opposition The bill’s fate cannot be understood without interest group action, particularly during elections, critical for unconventional gas politics: “Operators should avoid them like the plague,” advises UK consultant Patrick d’Ancona. Irrespective of technical credence, local concerns strongly sensitize politicians, and this “distorting effect can significantly amplify lobby groups’ concerns” (2011, p. 25). Indeed so. Surely the anti-fracking grassroots movement, organically grown since late 2010, itself plays a big role locally in a classic not-in-my-backyard (NIMBY) constellation. But key influence in national lawmaking rests with higher-up sector associations. They bring along high organizational, conflict and resonance capacity in Germany’s neo-corporatist political culture. If E&P firms poorly judged the sway of amateur citizen Mainstream environmental groups did not pioneer activism. Protest groundswell since 2010 was more a local matter. Some groups built on older networks against CCS, nuclear waste or wind farms, but mostly, few prior ties existed between local concerns and environmentalist groups. This is typical for anti-fracking movements globally (Control Risks, 2012, p. 10). National eco-groups such as BUND (Friends of the Earth), NABU, DNR, WWF, Greenpeace, or Robin Wood joined the cause, aiding with science expertise, campaign savvy, organizational and media resources. They linked with a broader climate and decarbonization agenda. Yet citizen groups are stubbornly independent from organized environmentalism, for which rural, agribusiness-dependent communities are unfavorable territory. Young movement politics often is fragmented, relying on informality and consensual coordination. Some 30 initiatives participate in the Gegen-Gasbohren (Against Gas Drilling) network, which runs a voluminous website with social media channels (Facebook, Google+, YouTube, Twitter, GoogleMaps etc.). Members use a common logo (a black hand with red stop sign “no fracking”) and campaign materials but have not built formal structures or a leadership. It remains a loose network. Local ideas vary. Many groups focus on better information, transparency and public consultation, safety or damage liability. Some want moratoria, some partial or total bans. Practicalities drive some, ideology others. Not all have a will or capacity to engage in complicated legal, technical, and policy debates. To add, GG is not an umbrella for all existing groups, many of which keep at arms’ length from GG’s fundamentalist tack. Notably, traditional E&P regions such as Lower Saxony are underrepresented. GG politics culminated in a May 2013 national convention in Hesse. It produced the radical Korbach Resolution, calling for an “immediate ban without any exemptions of all types of fracking” for fossil fuels, irrespective of chemicals use; a ban on waste water injection in disposal wells; and mining law revision. It even bid for “a general import and trade ban on ‘fracked’ fossil energy sources” (Rücker, 2013). Signed by 19 citizen and seven green pressure groups, the resolution found friendly media coverage and support from scores of other actors, including 29 municipality councils (Rücker, 2013). This resolution went on the popular OpenPetition.de platform, stating a target of 100,000 votes. Only 20,000 4.2 Industry groups opposition Energy peak organization BDEW, Bundesverband der Energie- und Wasserwirtschaft, is a true power house in Berlin. It represents 1,800 firms with 90% of electricity sales, 90% of gas sales, and 60% of heating; moreover, the “W” in BDEW stands for water, as members run 80% of drinking water production and 30% of waste water handling (BDEW, 2013a). Big corporations (including ExxonMobil) are key members, but the membership bulk is local public utilities, operating energy and water side by side. BDEW’s support for unconventional gas has been only lukewarm; and it embraced fracking criticism, demanding priority for water protection, absolute veto rights for water authorities and local water utilities, and mandatory EIAs (BDEW, 2011). BDEW mirrors the public utilities’ own group, Verband kommunaler Unternehmen (VKU). From 2010 on, VKU said any permit should be subject to local water managers’ vetoes in all sensitive water areas, and EIAs everywhere else (VKU, 2011). VKU had a public opinion poll taken. Forsa Institute found 79% would allow unconventional E&P using fracking only with strict legal limits “to avoid environmental damage.” 14% agreed “rules should not be too strict, so this energy source can be used well.” VKU appealed “to take the public’s vote seriously and fast adjust the legal framework” with “no compromise in protecting drinking water.” It added, “lawmakers must guarantee everyone affected is informed and involved early” (VKU, 2013a). In a 2013 53 Gasland Germany: state of play Protesters march, rally, and occasionally demonstrate at gas sites or firm offices such as Wintershall’s in Kassel. Militancy is rare. Neighborhood and expert panel discussions, local press, letter-writing and petition work fit more with the culture. Some groups have been open to talk with the E&P industry. Despite amateurishness, they reflect genuine citizen concern, resulting in scores of mayors’ protest letters and cross-party council resolutions. In turn, local politicking led the German Association of Towns and Municipalities (DStGB) to take an anti-fracking stand at the federal level (DStGB, 2012). German signatures were gathered by election day in September 2013. Initiators extended the deadline by six months. By end-2013 signatures stood at a mere 30,000 (OpenPetition.de, 2013). But GG also worked during summer with Campact.de, modeled after U.S. campaign platform MoveOn, receiving 169,000 votes for a simpler message without a reference to the Korbach text (Campact, 2013). Campact often partners with green group campaigns. It has been creative in taking protest to the streets. In 2012-13, GG and Campact staged media events in Berlin and state capitals: photo-friendly images of a three-metres-high toxic-green poison syringe, simulating a lethal injection into the ground in front of parliaments, made it to national TV, leading papers and magazines, as did a Campact-commissioned Emnid Institute opinion survey in May 2013. The national poll found 66% of respondents in favor of a fracking ban, 23 against, 11 undecided (TNS Emnid, 2013, p. 1). 2014/2 ISG&OJ More often than not, conservative farmers, businessmen, parish pastors and councilmen took a lead. 2014/2 ISG&OJ Gasland Germany: state of play 54 EU consultation, it rejected EU rulemaking except for strict EIAs (VKU, 2013b). VKU took care not to connect fracking with geothermal energy, where members have interests. In April 2012, the national farmers‘ association spoke up, a strong voice in conservative circles. Deutscher Bauernverband (DBV) expressed alarm over groundwater risks for field irrigation. It pointed out deep drilling for farm sprinkling is usually not authorized for fear of disturbing aquifer structure. DBV criticized high water usage, higher emissions vis-à-vis renewables (many farmers have on-property solar and wind facilities), and extended land use reducing scarce farming acreage. DBV also showed concern over seismicity, linking to negative geothermal experience; and demanded mandatory EIAs, public participation, and clear rules for damages and liability (DBV, 2012). German brewers‘ association DBB in May 2013 protested that water quality, and by implication the sacrosanct historic 1516 Purity Law of brewing standards, might suffer (Bild.de, 2013). Media uproar alarmed beer lovers that their favorite beverage might turn into a toxic cocktail. Allies stood ready for the brewers: Owners of mineral water firms had personally become involved with, supported or even led anti-fracking citizen groups (Seidel, 2012). They raised concerns in their sector groups such as mineral springs association VDM and soft-drink makers association WAFG, led by Coca-Cola and PepsiCo, but also including mineral water and fruit juice producers. To state and federal politicians, they insisted keeping fracs off formally designated water protection zones is not enough. A VDM membership survey found the Altmaier-Rösler bill would not shield 457 out of 500 sources. That could threaten firms’ survival, VDM said: purity laws for natural springs do not tolerate minimal contaminations and disallow post-source purification: “We demand the federal government not to let itself be put under pressure by international corporations” (Looden, 2013). In fall 2013, a coalition representing 700 firms went public with the Gelsenkirchen Resolution, signed by DBB, VDM, WAFG, Ruhr region water utilities’ group AWR, and water conglomerate Gelsenwasser. They demanded a fracking moratorium for all sourcing areas for the drinks industry, a ban on horizontal drilling under such areas, and detailed rules for damages and liability (DBB, 2013). Labor unions also stepped forward. Food workers’ union NGG passed a resolution for a fracking ban, fearing for water (NGG, 2013). IGBAU union, organizing farming and environmental service workers, also called for a total ban: fracking was a threat to water, soil, farming and forestry (IGBAU, 2013). 5. Pro advocacy 5.1 Industry groups A spearhead for unconventional gas is the oil and gas producers’ association, Wirtschaftsverband Erdöl- und Erdgasgewinnung (WEG). Chaired by ExxonMobil Central Europe chief Gernot Kalkoffen and co-led by Wintershall, RWE-Dea and GDF-Suez board members, the 90-member group looks formidable. In reality, Hanover-seated WEG is a minor lobby. But it is a member of influential BDI, the Federation of German Industry. BDI is an umbrella for 38 associations with 100,000 firms, many of them manufacturers concerned about spiraling energy prices as a threat to global competitiveness. Among them, chemical industry group VCI, representing 1,700 firms (including oil and gas), has been vocal to demand, “exploration of domestic shale gas deposits should be enabled fast.” VCI stressed its sector makes for 15% of inland gas consumption, and warned investment is drawn to competitors like the U.S. (VCI, 2013). BDI lobbies in line, saying “Germany must see the chances coming with extraction of domestic gas.” Under health and environment safeguards, “fracking should be promoted” (BDI, 2013a). “We don’t need a fracking ban in Germany,” the BDI president plainly told Chancellor Merkel at a BDI national convention in June 2013 (BDI, 2013b). The group was even ready to form what BDI itself called a “highly unconventional alliance.” Normally a nemesis to labor organizations, BDI joined with Germany’s third-largest, the Industrial Union for Mining, Chemicals and Energy (IG BCE). They urged state premiers, federal ministers and party leaders to pass the Altmaier/Rösler bill. „If politics excludes development of this globally important technology in Germany, it would be a highly problematic signal” for the nation, “with impacts far beyond the energy sector” (Wetzel, 2013). Earlier, in many firms IGBCE works council representatives had even collected pro-gas signatures, sparking internal disputes (Döpke, 2012). Normally, individual companies shun controversy exposure and prefer to let associations handle political conflicts or run advocacy campaigns. Major companies have departed from this path. They went for a mix of educational campaign, community outreach, myth-correction, press “canards” rebuttal, image and persuasion PR. In substance, recognition of public concerns and commitments to change behavior have been offered. It is suggested technology can solve the problems it has created. Firms also advertise pioneering spirit: Where Wintershall stresses its scientific research orientation, ExxonMobil sloganeers, “Germany needs natural gas, and Germany has natural gas.” It is reminiscent of a 40-year old image campaign in which Esso chief Wolfgang Oehme went on TV claiming “There’s much to do. Let’s tackle it” (Otte, 1974), one of the most popular slogans in German PR history. ExxonMobil Central Europe CEO Gernot Kalkoffen, BASF CEO Kurt Bock and Wintershall CEO Rainer Seele have been vocal in interviews, op-eds, speeches, and forums. Firms have committed top personnel to seek media exposure, participate in expert hearings and face hostile citizen assemblies. Other tools include publications, information events, site visit invitations, and in ExxonMobil’s case, a silver caravan “InfoMobil” rolling from town to town. Dedicated interactive topical websites are run by Wintershall (heimische-foerderung. de) and ExxonMobil (erdgassuche-in-deutschland.de, europaun¬konventionelleszerdgas.de, dialog-erdgasundfrac.de) and firms like RWE-Dea, GDF-Suez or BNK Petroleum extended subject web pages. ExxonMobil obviously uses Google Adwords to place its sites on top of search results. Wintershall published a conduct code on safety, environment and transparency (Wintershall, 2012). It and ExxonMobil voluntarily disclose frac-fluid. ExxonMobil In 2011, ExxonMobil Germany began “one of the largest communication offensives in its history,” as PR Magazin called it. A staff of ten was assembled, supported by Fleishman-Hillard and a daily media monitoring service, and ExxonMobil linked regional and national PR in new style (Neuen, 2012). Its most visible effort: an advertising campaign with full-page ads in leading papers, and 30-second TV spots placed before nightly news and political formats. Also used online, they featured employee testimonials. They were “to contribute to the company’s coming across in a more personal, more human way” (ExxonMobil, 2012, p. 23). One spot had an experienced fracking expert say: We have here in Germany the potential of large natural gas reserves. If you ask me whether it’s safe to develop these natural gas fields, I can only answer: Yes, absolutely. I am just as interested in safe drinking water as any citizen. To safeguard ground water, with a new drilling we install multiple barriers of steel and cement. My name is Dieter Sieber, and I am an engineer with ExxonMobil in Germany. (ExxonMobil, 2011) Sieber’s TV appearance quickly won him the media nickname “Mr. Frac.” Another spot featured a much younger colleague: As a young person, I’m thinking a lot about the future. Energy supply and environmental friendliness play an important role. Natural gas is an indispensable part of the energy mix so that we can comply with climate goals in the future. In Europe, there’s a vast potential of natural gas. We have the technology to tap into deposits safely and responsibly. My name is Michael Schietz, and I am an engineer with ExxonMobil in Germany. (ExxonMobil, 2011) Sieber and Schietz also participated in local town hall meetings and were open to media interviews. The ads, multiplied by journalistic reports, much provoked critical bloggers and social media users. 55 Gasland Germany: state of play 5.2 Companies’ public engagement said that it would cut harmful chemicals to zero by 2013 (Dürand & Matthes, 2012). In Lower Saxony, it began installing a new groundwater monitoring system at a well site, and also hinted EIA-style public participation could be accepted voluntarily (Doeleke, 2013a); the WEG association, too, would accept more specific EIAs (WEG, 2013d, p. 2). On wastewater, RWE-Dea presented a study for better reservoir water disposal (Voigt, 2013). 2014/2 ISG&OJ BDI did not spend much effort suggesting that energy prices could sink. Remarkable was also the absent voice of the association of industrial energy customers VIK. Unofficially, VIK functionaries admitted that members did not hope for price effects in the foreseeable future. The Chambers of Commerce and Industry (DIHK) adopted the same attitude. Yet symbolic value of the fracking issue for Germany’s industrial base was a good enough reason for soft support (Sorge, 2013). 2014/2 ISG&OJ ExxonMobil’s “info-dialogue” Gasland Germany: state of play 56 ExxonMobil won even more attention with an extensive stakeholder consultation process, combined with a neutral expert risk assessment. It was reported ExxonMobil committed about one million euros to this unique enterprise (Tenbrock, 2011). In it, there were no flashy marketing-style communications; instead, it took an earnest approach. Its long title: “information and dialogue process about safety and environmental compatibility of the fracking technology for natural gas extraction.” Informally it was known as the “info-dialogue.” It began in April 2011 and ran for a year, with events in Lower Saxony and NRW. “Without citizen acceptance, we did not want to continue. We knew without maximal transparency, we would lose credibility,” public affairs manager Heinrich Herm Stapelberg explained. “We had to wider open ourselves and seek more conversation with people than we have done before […] We went through a learning process” (ExxonMobil, 2012, pp. 22-23). ExxonMobil had consultant Ruth Hammerbacher, a former Green politician, lead the project. Some ExxonMobil engineers and scientists answered firm-specific questions. At commencement and closing conferences, CEO Kalkoffen gave a speech. But ExxonMobil stood mainly out of the way to avoid criticism it was steering. The “info-dialogue’s” core element was an independent science panel of 40 experts who were to study fracking risks. ExxonMobil promised to stick to their report’s guidance, whatever the outcome. That experts’ neutrality would be questioned was obvious. Selection was made without ExxonMobil, but the firm insisted only experts could be selected who had never before worked for the gas industry. Their work was also put to scientific peer review. All was public and accompanied by a working group of 60 community leaders, water utility representatives, farmers’ associations, green and citizen groups, labor and church leaders. From communities, they collected and drafted questions for the scientists, who were to respond and later debate with stakeholders. The process was fully documented on a website, dialog-erdgasundfrac.de (Ewen, Borchardt, Richter, & Hammerbacher, 2012) In April 2012, the expert panel presented its comprehensive risk assessment in a public conference. This final report was later judged the best currently available evaluation of the German situation by public-service geologists (BGR, 2013b). The experts saw no need for a fracking ban, but generated a long list of recommendations and warnings about water, emissions, at-risk geology, and more. They recommended to totally purge frac-fluids of harmful chemicals; make laws more restrictive; invest in more science; and have all projects undergo extensive stakeholder consultations and public planning procedures (Ewen, Borchardt, Richter, & Hammerbacher, 2012). ExxonMobil CEO Kalkoffen said the report was constructive but a challenge. “We stopped projects, we invested money, we have never engaged in a process like this, and we were not quite sure whether we should do it,” he explained. “We now have some toads to swallow and some not so easy homework to do” (ExxonMobil, 2012, pp. 22-23). Media generally reported in a friendly way about the “info-dialogue.” Still, critical feedback made the rounds. For example, Berlin newspaper taz debunked the “pseudo-dialogue” as “cosmetic” and “manipulative” (Seyfert, 2012). But the one-year effort which saw ExxonMobil pay scientists, with citizen support, to publicly write up a no-go list, which the company, ex ante, promised to comply with, impressed even deep-green critics. As one astounded analyst of the U.S. Natural Resource Defense Fund said: “Can anyone imagine ExxonMobil funding a similar project in the U.S.?” (Mall, 2012). 6. The Grand Coalition’s plan In September 2013, voters gave Merkel’s CDU/CSU almost an absolute majority but destroyed her FDP partner. Merkel chose to pursue a coalition with the Social Democrats. They negotiated for five weeks. But by week two, the environment working group already had a consensus on fracking. It almost copied a 2012 intergovernmental environment ministers’ conference plan (UMK, 2012, pp. 61-63) and the Bundesrat (2013) resolution. But negotiators topped it with a drastic message: We will establish a moratorium which dispenses with this technology in unconventional gas production until sufficient scientific evidence is available and all risks for health and environment have been evaluated and excluded. We will permanently prohibit the use of environmentally toxic chemicals. Independently from the question of fracking technology, we need a revised EIA for mining, adequate mining damages law, and a reform of the Water Resources Act to always guarantee According to current studies on environmental relevance, the use of fracking technology for unconventional gas extraction – particularly shale gas – is a technology with formidable risk potential. Impacts on humans, nature and environment have not been sufficiently clarified. For us, drinking water and health take absolute priority. (CDU, CSU, & SPD, 2013, p. 61) The studies claim ignores the low-risk assessment of the BGR federal geosciences agency. Then, fracking is linked to unconventional gas only, not conventional gas or geothermal stimulation. Since mining authorities define tight gas as conventional, it is implied tight gas fracking might be alright. We reject use of environmentally toxic substances in deploying fracking technology for exploration and extraction of unconventional gas deposits. Permit applications can only be processed when necessary basic data for evaluation become available and it is unequivocally clear there is no ground for concerns about adverse changes to water quality (precautionary principle of the Water Resource Act). Waste disposal of the flowback from frack processes under usage of environmentally toxic chemicals in disposal wells is currently not responsible because of a lack of findings about connected risks. (CDU, CSU, & SPD, 2013, p. 61) This language is, as one CDU parliamentarian said, “extremely squishy” (Mattfeldt, 2013). The term “environmentally toxic” is political jargon, not a category in chemicals law. The referral to the Water Resources Act’s precautionary principle implies that even general The coalition will, involving the states and science, determine in a common process with the companies what concrete insights exploration has to deliver to resolve knowledge deficits and create a sufficient basis for possible subsequent steps. This shall be done in a transparent way. In a dialogue with all participating stakeholders and led by scientists, research results shall be evaluated. (CDU, CSU, & SPD, 2013, p. 61) This pledge to buy time for open consensus-building reflects hope for better political weather and science or industry delivering better methods. As one negotiator admitted, “we expect a technological solution for this problem” (Nicola, 2013). In the short term, the coalition will propose changes for improved protection of drinking water in the Water Resources Act, and an ordinance on environmental impact assessment in mining projects, which will require a mandatory environmental impact assessment and public participation before any approval of measures to explore and produce gas from unconventional deposits using fracking. (CDU, CSU, & SPD, 2013, p. 61) This tasking breathes new life into stranded Altmaier/ Rösler bill, and feeds in the states’ Bundesrat resolution. State moratoria may practically end once these laws pass. The text envisions no major revision of the Federal Mining Act, and also says nothing about ideas pending in Brussels, which may come in handy to legitimize action in Germany. Parties opted for strong language, a vague promise of strictness, and a commitment to broad consultations. They have avoided, in Merkelesque fashion, a clear yes or no. Anyone who wants to interpret the text as a continued (political) moratorium can do, but also the reverse. All this was not lost on activists. „A dangerous deceptive package,“ the BBU league of environmental citizen groups said. It “will not ban future fracking; it will only arrange its conditions,” and projects will be “made acceptable in polite society under the mantle of research” (BBU, 2013). A Gegen-Gasbohren blogger was “more than bitter after the long, hard fights.” The future held “fracking a bit without chemicals.” She conclud- 57 Gasland Germany: state of play Many media understood this prematurely as indefinite prohibition of fracking. National tabloid Bild editorialized, under a headline “We need fracking!,” that progress is blocked by “doubters who do not know how to explain this important future technology to the people. For they know not what they do!” (Anda, 2013). But the proposal still had to pass energy and industry working groups. In the final document, the words “moratorium” and “permanent prohibition” were missing, and the liability clause too. It ran 185 pages, with 13 pages devoted to energy and one half-page to unconventional gas, strangely in the chapter “Exit from nuclear power.” Under a simple headline, “fracking,” it read: concerns may lead to withholding permits. But the text is nonconcrete on legal implementation. Seismicity issues go unmentioned. 2014/2 ISG&OJ broad public participation and clear rules for liability in the future. (Reiche & Vogt, 2013) 2014/2 ISG&OJ Gasland Germany: state of play 58 ed, “the grand coalition puts the case for industry and wants to frack” (Schomann, 2013). What has changed politically is the federal government’s new strength to shepherd bills through the Bundesrat. States will rather not try a blockade. For them, some law changes resolving some issues may not be perfect but “satisficing,” i.e. satisfying and sufficing. To add, the new cabinet may ease a deal. SPD leader Sigmar Gabriel, ex-premier of Lower Saxony and ex-federal environment minister, is economics and energy minister; SPD colleague Barbara Hendricks of NRW has the environment post. Since all key gas states are Social Democrat-led, a federal-state accord will almost be a family affair. 7. Conclusion and outlook In three years, Germany has not found a decision, much less a strategy on unconventional gas placed firmly in energy policy. The failure to produce fairly simple legislation shows federalism is full of speed bumps, veto players and odds for gridlock. Vocal minorities, sectoral lobbying, and emotional campaign advocacy have blocked streamlined decision-making. The fracking debate has partly been populist, but also had a conservative trait. It was a typical German battle about how best to be on the safe side. Cultural clichés posit Germans are risk-averse, skeptics of large-scale technology, and needful of a dose of angst; and that they overcompensate by obsession with methodological study, planning, procedure, risk mitigation, and multiple insurance. Stereotypes have a kernel of truth. Unconventional gas and fracking just happen to suffer the culture. What the new coalition will lay on the table is unclear. But to industrialists’ pessimist views of her third term, Merkel recently said, in English, “the proof of the pudding is in the eating” (dpa, 2013b). Whether that pudding is a prolonged moratorium depends on E&P industry’s strategies, too. If it offers remedies and restraint, accepts robust rules and pays the cost, it has a good chance to shorten times of ambiguity. It must also look soberly at energy policy context. Germany has heavier weights to lift than issues of unconventional gas and fracking. They are a policy sideshow. Currently the government can afford to just sit on its resources and wait. Not so with gas producers; that is the dilemma. Even if they forgot their exploring urge, they still have a problem with conventional wells. Moratoria halt established fracking operations. Law is inconsistent, compromising due process. Moratoria buy time – the question is, for what and for whom. For government, a cynic may say that politics is an art of delaying decisions until they will not matter anymore. For industry, moratoria did not stop the clock on technology advancement. Moratoria reflect hope for a technical solution where politics could not deliver one. Such solutions can work if industry earnestly commits to rebuilding trust and contributes to consensus. Industry‘s learning curve on this has been steep. Germany’s unconventional scene is not dominated by small wildcatters and new-entry investors but led by companies long embedded in the German social market economy setting. They know the slow-moving interest balancing, business responsibility and sustainability expectations that come with it. They know Germans’ intolerance of business to play fast and loose with rules. To call the moratoria’s political bluff by litigation may be easy in court. But one can win battles without winning the campaign. And public concerns and interest group resistance will not just fizzle out. Germany is a slow mover. But it is normally good at creating legal certainty, predictable investment conditions and administrative efficiency. Strict EIAs and public participation have, in other sectors, not been terrible barriers for investment. A new regulatory regime may be costly and cumbersome but still a good deal for industry. It may not quickly find a “Golden Age of Gas” in German lands, but it may discover a perfect global testing ground for “Golden Rules.” A list of references is available at: www.shalejournal.eu/issue2refs