Gold’s 27% advance stands out in mixed year for metals markets
Gold is heading for one of its biggest annual gains this century.
Chancellor Angela Merkel’s Christian Democratic bloc and the Social Democratic Party agreed in November to a temporary ban on exploring unconventional natural gas reserves in Germany until environmental issues are resolved.
As the German government fine-tune new rules to allow miners use the controversial technique of hydraulic fracturing — or fracking — for gas extraction as early as next year, experts are voicing their concerns.
After a two-year moratorium, Environment Minister Barbara Hendricks has said that the country is ready to embrace the shale gas revolution. But she warned that while allowing fracking should reduce Germany’s dependency on Russian energy and boost competitiveness with US manufacturers, authorities will set tough environmental standards.
Fracking has been the subject of a heated debate in the country’s ruling coalition, with many in favour of reducing reliance on Russian energy imports, while others fear the impact of fracking chemicals on a densely populated country.
Francisco Szekely, Director of IMD’s Global Center for Sustainability Leadership, says European countries should think carefully before allowing fracking in their territory.
In his opinion, while fracking offers the benefits of abundant supplies of unconventional oil and gas and lower carbon emissions than other combustibles such as oil and gas, “it is not a sustainable solution due to its large environmental costs and its potential contribution to climate change.”
The sustainability expert adds that to put Europe’s economy and the world’s on a path to sustainability, “governments and companies need to focus on doing real good for society and not just doing less harm, as seems to be the case with fracking.”
Minimum Principles
In January the European Commission adopted “minimum principles” for its members to follow when it comes to fracking. The guidelines, said the commission, aim to influence to some extent the impact of the technique on the environment and the climate.
“Shale gas is raising hopes in some parts of Europe, but is also a source of public concern,” said Environment Commission Janez Potocnik when announcing the guidelines. “The Commission is responding to calls for action with minimum principles that Member States are invited to follow in order to address environmental and health concerns and give operators and investors the predictability they need.”
Hydraulic fracturing involves pumping water and chemicals at high pressure through drill holes to prop open rocks. Some European organizations oppose it due to environmental worries, in particular fears about the possible contamination of drinking water.
“Fracking in Europe would provide short-term economic benefits at best, and what is clear is that developed societies cannot continue consuming as we do now if we want to ensure the sustainability of our world for future generations,” Szekely says.
EU countries in the exploration stages are Denmark, Germany, Poland and Romania. As of yet, there is no commercial production of shale gas in the old continent. But Germany’s sudden urge for shale gas extraction means the situation is about to change.
