MOSCOW, June 2 (RIA Novosti) – With fracking techniques making natural gas cheaper, German companies have started to move out their operations to the US, Reuters reported on Monday.
“In the energy-intensive sectors, such as chemicals, we are facing substantial challenges that will prevail for a longer time. It isn’t sudden but a creeping process with new investment going more often to the United States and other places abroad, where energy costs are much lower,” said Carsten Rolle, Head of the Department of Energy and Climate Policy at the Federation of German Industries, quoted by the agency.
Following new energy policies of Chancellor Angela Merkel promoting renewable energy, German industrial companies have to pay ones if the highest prices in the world for power.
Meanwhile, prices for fuel in the US significantly went down because of widespread use of environmentally unfriendly fracking techniques for extracting natural gas. For example, Louisiana now has industrial electricity prices of just $0.055 per kilowatt hour, US Energy Information Administration data shows.
Huntsman Corporation calculated that a large, modern petrochemical plant in the US is $125 million cheaper to run per year than in Europe, according to Reuters.
Natural gas is also widely used as an ingredient in chemical industry which also forces other countries to boost their manufacturing's contribution to the US.
"Germany faces a double whammy of rising energy costs in Germany and falling energy costs in the United States,” Daniel Yergin, vice chairman of consultancy HIS, said.
The extraction of shale gas through fracking is a mining technology that involves high-pressure water and chemicals injection into hard-rock formations to create fractures through which oil and gas can be pumped.
The technology's benefits are controversial since the process involves injecting liquids with carcinogenic chemicals, which stay in the ground and can pollute soil and groundwater. The water used in extraction can later be treated, but its subsequent safety has not been proven.
Several cases of the harmful effects of fracking on human and animals' health have been reported lately. Fracking has also allegedly caused nearly 50 earthquakes in Mexico since the beginning of the year.
Fracking has been completely banned in several countries including France and Bulgaria. The US government has launched an inquiry into the health risks of hydraulic fracturing.
