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Oil industry faces economic pressure

In a commentary for the German journal Gebäude Energieberater, the EWG President Hans-Josef Fell provides a political outlook for the oil industry based on the EWG study on Fracking published earlier this year.

He concludes that the oil industry faces a dead-end situation: a low oil price will arrest fossil fuel investment, while a high oil price will accelerate the transition towards renewable energy. In either case, the economic pressure on oil companies increases.

Read the full article (in German) here.

New Energy Watch Group Study: End of Fracking Business

The End of the Fracking Business

A new Energy Watch Group study on the consequences of and current developments in fracking

Berlin, 19 March 2015: A new Energy Watch Group (EWG) study that examines the consequences of fracking in the United States warns strongly against the expansion of shale gas extraction in Germany and Europe. The costs and environmental damage produced by fracking are out of all proportion to the amount of raw materials extracted.

End of the Fracking Boom

Fracking entails enormous environmental destruction, a high consumption of groundwater and large-scale sand mining. What’s more, the indebtedness of companies in the fracking industry is steadily increasing. The drop in petroleum prices since autumn 2014 –a phenomenon related to the financial depreciation of oil and gas reserves – has caused financial problems for many companies. The shale gas industry is not doing well. Mass layoffs and bankruptcies reveal the true story behind the rosy picture of a reliable and long-standing boom in the fossil economy.

Thus far, fracking on a commercially relevant scale has occurred primarily in the United States. In 2005, then-President George W. Bush loosened the environmental regulations for the fracking of crude oil and natural gas. As a result, US gas production has been rising steeply ever since. This has enticed many to believe the fallacy of a supposedly decades-long oil and gas fracking hype.

Expansion in Europe

The study provides an overview of the consequences of a possible expansion of shale gas extraction in Germany, based on the American experience. The apparent success overseas cannot be transferred 1:1 to Europe, where other conditions prevail. No promising shale gas deposits are available here, nor are the infrastructural requirements comparable. In the EU, fracking has very low potential. Nonetheless, politicians – particularly the new EU Commissioner for Energy, Maroš Šefčovič – want to proceed with gas extraction through fracking at all costs. “The US experience shows that short-term success was bought at the price of extensive collateral damage. Last year, New York enacted a ban on fracking. And in Germany, fracking will not be able to play nearly the role it’s played in the US. It’s pure illusion to believe one could repeat the US successes and at the same time minimize the associated environmental effects. France has already imposed a fracking ban, and several other EU countries have instituted a moratorium. Why should Germany take the risks when the energy and climate policy debate requires other measures anyway?” asks Dr. Werner Zittel, the study’s author and head of the Ludwig Bölkow Foundation.

Since December 2014, the proposal for a controversial fracking law has been under discussion. This month, the German Bundestag will begin deliberations on the fracking regulations. This special situation, which calls for a socially responsible decision compatible with climate policy, inspired the Energy Watch Group to prepare a provisional report. “It is completely incomprehensible that a government policy for fracking still dominates from Brussels to London to Berlin, at the expense of environmental protection and against the will of the affected population, while at the same time putting continued pressure on the expansion of renewable energies.”, says Hans-Josef Fell, President of the Energy Watch Group.

The EWG study (in German) can be accessed here.
The English summary of the study can be accessed here.
Here you can read the EWG press release in German.

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Rapid fall in oil prices: causes and effects

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The EWG Chairman Dr. Werner Zittel outlines the causes and effects of the rapid fall in oil prices in an interview to the Austrian newspaper Sonnenzeitung. Read the full interview (in German) here.

Press coverage of the EWG study on WEOs 1994-2014

Frankfurter Rundschau: Internationale Energie-Agentur: Fatale Fehler in der Energiebibel

„Forscher werfen der Internationalen Energieagentur vor, das Potenzial von Ökostrom kleinzurechnen. Die falschen Voraussagen führten auch heute noch zu hohen Investitionen in Kohl, Öl, Gas und Atom.“

Vox: The International Energy Agency consistently underestimates wind and solar power. Why?

„That the IEA has historically underestimated wind and solar is beyond dispute. The latest look at the issue comes from Energy Post editor Karel Beckman, who draws on a recent report from the Energy Watch Group (EWG), an independent Berlin-based think tank. The report analyzes the predictive success of previous WEOs.“

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UUTISET: Professors: Finland’s energy decisions made in secret – using dodgy data

„Christian Breyer, LUT’s Professor of Solar Economy, predicts that the cost will drop to less than half of today’s level by 2050. Meanwhile the Berlin-based Energy Watch Group calculates that wind power adoption has been four times higher than IEA predictions.“

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Junge Welt: Es geht auch ohne

„In den Jahren zwischen 1994 und 2014 habe die IEA regelmäßig irreführende Prognosen zu Photovoltaik und Windenergie veröffentlicht. Über den »World Energy Outlook« (WEO) habe die IEA »großen Einfluss auf politische wie ökonomische Entscheidungen, die Regierungen weltweit in Bezug auf Energiepolitik fällen«, heißt es in einer Erklärung.“

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Zeitung für kommunale Wirtschaft: Unverständlich und verantwortungslos

„Eine Studie der Energy Watch Group und der Lappeenranta University of Technology zeigt, dass die Internationale Energieagentur (IEA) die Möglichkeiten von Solar- und Windkraft im letzten Jahrzehnt kontinuierlich untergraben hat. Gleichzeitig habe die IEA den konventionellen Energiequellen in nicht nachvollziehbarer Weise Bedeutung beigemessen.“

Teknisk Ukeblad: Ny rapport: Så grovt har IEA bommet på fornybar-boomen

„IEA har holdt tilbake det det globale energiskiftet i årevis. De feilaktige estimatene har ført til høye investeringer i fossil- og kjernekraftsektoren, og hindret utviklingen av fornybar energi og underminert kampen mot klimaendringene, sier lederen for Energy Watch Group og tidligere medlem av det tyske parlamentet, Hans-Josef Fell, i en pressemelding.“

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Neue Energie: Fehler in der Energiebibel

„Kritische Experten fahren schweres Geschütz gegen die Internationale Energieagentur (IEA) auf: Sie werfen der renommierten, in Paris ansässigen Fachorganisation vor, die Potenziale von Windkraft und Solarenergie systematisch zu niedrig anzusetzen und damit die globale Energiewende zu torpedieren.“

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Solarify: IEA geringschätzte Wind und PV systematisch

„Trotz des exponentiellen Wachstums von Photovoltaik und Windkraft in den letzten Jahrzenten, erwartungsgemäß gleichbleibend exponenziell auch in den kommenden Jahrzehnten, geht die IEA weiterhin von einer linearen Wachstumskurve dieser Technologien aus, d.h. kein Wachstum der jährlichen Installationen.

 EE-News: Energy Watch Group: Irreführende Solar- und Windkraft-Prognosen der IEA

„Die WEO Berichte werden von OECD Regierungen geprüft und genehmigt, von denen einige hoch in konventionelle Energien investiert haben. Die Energy Watch Group ruft Wissenschaft und Zivilgesellschaft deshalb dazu auf, die politische und wirtschaftliche Abhängigkeit der IEA intensiver zu begutachten.“

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Klimaretter: Fehler in der Energiebibel

„Das Netzwerk hat die Zuverlässigkeit der Prognosen im alljährlich von der IEA publizierten World Energy Outlook analysieren lassen, der als Bibel der Energiewelt gilt – und zwar für die Ausgaben 1994 bis 2014. Ergebnis: Obwohl Windkraft und Photovoltaik in den vergangenen Jahrzehnten exponentiell gewachsen seien, gehe die IEA weiterhin von einem linearen Wachstum dieser Technologien aus, also einer gleichbleibenden jährlichen Installation von Neuanlagen.“

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Only rapid expansion of renewables can reverse EU dependency on Russian natural gas

A new analysis by Hans-Josef Fell, EWG President with the scientific support of the EWG Chairman Dr. Werner Zittel proves that due to insufficient resources, a natural gas diversification strategy with other source countries is doomed to fail. You can download the analysis here.

Fossil and nuclear fuels – supply outlook

The short version of the EWG report is available here. The full report can be downloaded here. You can download the press release on the EWG report here.