German Commodities Sector /

Crude Oil and Gas

Crude Oil

Interesting facts about crude oil

Interesting facts about crude oil
Germany covered about 2% of its crude oil demand with domestic production in 2020.
Interesting facts about crude oil
57% of the total German production in 2020 came from the Heide-Mittelplate I oil field located in the Wadden Sea.
Interesting facts about crude oil
Crude oil is created by the transformation of huge deposits of plankton.
Interesting facts about crude oil
On average, crude oil deposits are found at a depth of around 1.5 km. Technical progress, however, has made it possible to open up oil fields at a depth of 5,000 m and more.
Interesting facts about crude oil
More than 22,000 drilling operations have been carried out since crude oil and natural gas production began in Germany.
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History

Crude oil has been industrially extracted in Germany for more than 150 years. The successful oil well in Wietze near Celle in 1858/59 is generally recognised as being one of the first in the world. Crude oil production in Germany peaked in 1968 with an annual production of around 8 million tonnes. Proven and potential crude oil reserves in Germany were estimated to be around 27 million tonnes as of 1 January 2021. Most of the crude oil reserves are in the North German Basin, primarily in Schleswig-Holstein and Lower Saxony. At the end of 2020, there were 49 oil fields in production.

Economic importance

With a share of around 34% of primary energy consumption, crude oil is by far the most important energy source in Germany. In this context, fossil fuels with a share of 76% generally account for a much larger share than renewable forms of energy. In 2020, domestic oil production amounted to around 2% of Germany’s annual consumption and thus remained the same compared to the previous year. Germany is one of the world’s largest users of mineral oil, making it almost entirely dependent on importing crude oil and crude oil products. Imports of crude oil are, at around 83 million tonnes, slightly lower than in the previous year. These imports in total were valued at €23.1 billion and came from 32 countries (1), with 56% of the imported crude oil alone coming from Russia (28.2 million tonnes), Great Britain (9.6 million tonnes) and the US (9.4 million tonnes). Germany produced slightly less than 2 million tonnes of crude oil in 2020. The country’s share of global oil production amounted to approx. 0.04% in 2020. The value of crude oil produced in Germany in 2020 is estimated to be €528 million, which represents 0.01% of GDP. Crude oil accounted for around 4.5% of the total value of natural resources produced in Germany in 2020. In terms of economic significance, crude oil thus ranked third behind lignite and natural gas in the list of fossil energy resources produced in Germany and in seventh place out of all natural resources extracted nationwide. In a 2020 international comparison of crude oil-producing countries, Germany was in 58th place (1970: 26th place). At the end of 2020, 2,008 persons were employed in oil production in Germany (2).

Extraction

In 2020, 49 oil fields were in production in Germany. These fields extract oil by means of some 743 production wells in drilling installations (onshore) and production platforms (offshore). In 2020, the oilfields of Schleswig-Holstein and Lower Saxony yielded almost 90% of the total German production. The remaining quantity was mainly produced in the Federal States of Rhineland-Palatinate and Bavaria, together with very low production levels in Hamburg, Brandenburg and Mecklenburg-Western Pomerania. The largest German crude oil field is the Heide-Mittelplate I field in the Schleswig-Holstein Wadden Sea (Wattenmeer) National Park. It has been developed since 1987 by a drilling and production island and by oil well facilities on the mainland. This oil field accounted for more than half of Germany’s total crude oil production in 2020.

Uses

Crude oil is a fossil energy source. It is primarily used as a fuel for vehicular transportation and to heat buildings. Over the last few years, oil has accounted for 94% of energy consumption in the transport sector. Besides, oil makes up around 23.4% of the energy used for heating buildings. A particularly heavy user of crude oil is the chemical industry for processes such as the manufacture of plastics, paints, foam, washing detergents, medicines, lubricants and cosmetics.

Natural gas

Interesting facts about natural gas

Interesting facts about natural gas
In contrast to coal and oil, natural gas has only been used as an energy source relatively recently.
Interesting facts about natural gas
Natural gas has been extracted from domestic gas fields for the past 100 years.
Interesting facts about natural gas
5 % of the demand for natural gas in Germany was covered by domestic production in 2020. Approximately 94 % of the German natural gas was extracted in Lower Saxony.
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History

 

In 1910, natural gas was found in Neuengamme (which is a district of Hamburg today) when drilling for water. The industrial production of natural gas started in 1913. However, natural gas production in Germany remained minimal until the end of the 1960s, with only a1 % share of the primary energy consumption in Germany (West). The oil crises of the 1970s focused increased attention on the consumption of energy and the need for the development of energy sources.

Domestic production grew with the discovery of large gas deposits on the German-Dutch border and the increasing conversion of town and coke-oven gas to natural gas. This was accompanied by a steady expansion of the gas infrastructure (from 12 to approx. 20 billion m³ (Vn) (3) of raw gas between 1970 and 2005). In 2005, domestic natural gas production covered around 25 % of German natural gas consumption. Since then, however, production has declined. The safe and probable reserves of natural gas are also declining. These amounted to around 43 billion m³ (Vn) as of 1 January 2020. The decline in natural gas reserves and production is mainly due to the increasing depletion of the deposits and the resulting natural decline in extraction. There have been no significant new discoveries in recent years. A legislative process lasting several years was also responsible for the decline in reserves; during this process, the topics discussed included future requirements for the use of fracking technology, which led to new legislation in 2016.

Economic importance

Natural gas is still the second most important source of energy in Germany with a share of around 26% of primary energy consumption. In 2020, natural gas production in Germany amounted to around 5.7 billion m³ (Vn) of raw gas, covering only about 5% of domestic natural gas consumption which decreased by approx. 1.3 % in 2020. In 2020, 1,674 TWh of natural gas valued at €18 billion were imported. The imported gas originated in Russia/CIS (1,121 TWh), Norway (349 TWh), the Netherlands (194 TWh) and Belgium (9.6 TWh). There was a very slight reduction in imports (–1.7 %) compared to the previous year. However, a considerable proportion of the natural gas imported was reexported to neighbouring European countries (814 TWh). In terms of the economic significance of domestically produced natural gas, Germany ranked number 48 in the comparison of all natural-gas-producing countries in 2020. The country’s share of global natural gas production amounted to just under 0.15% in 2020. The value of the natural gas extracted in 2020 amounted to an estimated €0.75 billion. That is equivalent to about 0.02% of GDP. Natural gas accounted for around 7 % of the total value of natural resources produced in Germany in 2020. At the end of 2020, 1,275 persons were employed in the German production of natural gas. (4)

Extraction

Around 94% of German natural gas was extracted in Lower Saxony in 2020. Other Federal States (Saxony-Anhalt, Schleswig-Holstein, Thuringia and Bavaria) contributed only marginally to the total production. 406 production wells extracted natural gas on 73 gas fields. The A6/B4 natural gas field in the “Entenschnabel” (duckbill) – an economic zone in the German Bight (North Sea) – is the only German offshore gas field. 2020 was the last time natural gas production was reported from this field and the natural gas field is now considered depleted. Since 1974, 9.5 billion m³ of raw gas and 813,000 tonnes of natural gas condensate have been produced from this gas field. Like crude oil, natural gas occurs in underground deposits. Similar to the exploration of crude oil, the exploration of natural gas takes place primarily through seismic surveys and exploration drilling. Gas extraction takes place through a borehole stabilised with cement and steel and a riser pipe is then inserted through the hole.

In addition to the development of conventional deposits, the development of non-conventional natural gas deposits is conceivable. Unconventional deposits include natural gas deposits in shale, clay, marl and coal seam rock, the development of which requires the use of “hydraulic fracturing” or “fracking” for short. “Fracking” involves injecting a suspension (water, proppants and additives) and the resulting increase in pressure to create small cracks in the rock containing the natural gas in a controlled manner. This process releases the gas so that it can be brought to the surface through the drilling pipes.

“Fracking” in Germany has been used for many decades in the development of conventional deposits, especially in dense sandstones (mostly at greater depths) and has been tried and tested for many years. However, the use of fracking for the commercial development of shale, clay, marl and coal seam rock (i.e. unconventional deposits) is not permitted in Germany until further notice. (5) The German parliament has not yet made use of the opportunity to review the ban on the basis of the report of the Fracking Expert Commission presented in 2021. The topic of fracking continues to be discussed very controversially in Germany.

Uses

As a fossil fuel, natural gas is mainly used in industry (36%) and in private households (31%, mainly for heating). In addition, it is used to generate electricity (14%) in the trade, commerce and services sectors (12%) and in district heating/cooling (including combined heat and power plants; 7%). In transport, natural gas plays a very minor role as a fuel at 0.2%. Natural gas also other uses – as a reactant in chemical processes (e.g. for ammonia synthesis in the Haber-Bosch process (nitrogen fertiliser), for iron ore reduction in the blast furnace process but particularly in the production of hydrogen through steam reforming.

(1) A list of oil-producing countries can be found here: https://www.bafa.de/SharedDocs/Kurzmeldungen/DE/Energie/Rohoel/2020_12_rohloel- info.html [Accessed on 12 August 2022].

(2) [BfA 2020]: Federal Employment Agency. URL: https://statistik.arbeitsagentur.de/SiteGlobals/Forms/Suche/Einzelheftsuche_Formular.html?gtp=15084_%20list%3D5&topic_f=employment-sozbe-wz-heft [Accessed on 14 November 2022].

(3) Standard volume (Vn).

(4) [BfA 2020], for a detailed source reference, see final note i.

(5) Bundesministerium für Wirtschaft und Klimaschutz (German Federal Ministry for Economic Affairs and Climate Action) (2022). URL: https://www.bmwk.de/Redaktion/DE/Artikel/Industrie/fracking.html [Accessed on 3 November 2022].

 

 

Crude Oil and Gas

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Glossar

In Federal States in which legislation does not include an excavation law and the State-level Nature Conservation Law does not apply to the extraction of non-energetic, ground-based natural resources in the context of dry excavations, this type of natural resource extraction falls within the scope of the relevant state building regulations.

Legal limitations also exist: State building regulations apply to the excavation of solid rock (limestone, basalt, etc.), for example, in quarries with an area of up to 10 hectares (ha) in which no blasting is carried out. In the event that this area is exceeded, or if water bodies are formed after completion of the extraction operations, the German Federal Immission Control Act (BImSchG) and/or Water Resources Act (WHG) are applicable.
In Bavaria and North Rhine-Westphalia, the above-ground excavation of non-energetic, ground-based natural resources in the context of dry excavations is determined at state level by the existing excavation laws (AbgrG). For the excavation of solid rock (limestone, basalt, etc.) in quarries where blasting does not occur, the AbgrG applies to sites with an area of up to 10 ha. In the event that this area is exceeded, or if water bodies are formed after completion of the extraction operations, the German Federal Immission Control Act (BImSchG) and/or Water Resources Act (WHG) are applicable. In the other Federal States, this type of natural resources extraction is regulated by the respective state building regulations or by the state-level nature conservation laws.

In general, the AbgrG applies to those raw materials the excavation of which is not directly subject to mining law or the mining authorities. These raw materials include (in particular) gravel, sand, clay, loam, limestone, dolomite and other rocks, bog mud and clays. However, the jurisdiction between AbgrG and mining law can vary from case to case in the case of certain raw materials, such as quartz gravels. The requested authority must always verify its own jurisdiction in each case. The AbgrG also encompasses surface area usage and the subsequent rehabilitation of the area.
The German Federal Immission Control Act (BImSchG) is the most important and practice-relevant law in the field of environmental law. It constitutes the basis for the approval of industrial and commercial installations. In the natural resources extraction industry, quarrying companies must have approval to extract stones and earth. Every quarrying area of 10 hectares or more must undergo a full approval procedure, including public participation and UVP (environmental impact assessment). A more simplified approval procedure is used for quarrying areas of less than 10 hectares.

The sphere of responsibility for the legal immission control approval procedure is fully specified in the Immission Control Acts of the Federal States. The Federal States are tasked with the administrative enforcement of the approval procedure. Each individual state’s Environment Ministry – the highest local immission protection authority – usually bears the responsibility for this procedure. Subordinate authorities include regional councils, district authorities and lower-level administrative authorities. Administrative jurisdiction generally lies with the lower-level administrative authorities.
The GDP measures the value of goods and services produced domestically (creation of value) within a given period (quarter, year). The Federal Office of Statistics calculates the GDP as follows: production value minus intermediate consumption = the gross value added; plus taxes on products and minus subsidies = GDP
The gross value added is calculated by deducting intermediate consumption from the production values, so it only includes the value added created during the production process. The gross value added is valued at manufacturing prices, i.e. without the taxes due (product taxes), but including the product subsidies received.

During the transition from gross value added (at manufacturing prices) to GDP, the net taxes (product taxes less product subsidies) are added globally to arrive at an assessment of the GDP at market prices’. Source: Destatis
The planning approval procedure under mining law is used for the approval procedure of a general operating plan for projects which require an environmental impact assessment (§§ 52(2a), in conjunction with 57 a of the BBergG).
There are different definitions and methodological approaches at the international as well as at the national level as to what subsidies are and how they are calculated. According to the definition of the German government’s subsidy report, this report considers federal subsidies for private companies and economic sectors (ie grants as cash payments and tax breaks as special tax exemptions) which are relevant to the budget. Subsidies at the federal level can be viewed via the subsidy reports of the federal states (see Appendix 5 of the German government subsidy report).
In compliance with § 68(1), Water Resources Act (WHG), the excavation of landowners’ natural resources such as gravel, sand, marl, clay, loam, peat and stone in wet extraction operations requires a planning approval procedure. The reason for this is that groundwater is exposed in wet extraction, resulting in above-ground water. The planning approval procedure is implemented by lower-level water authorities.

The procedural steps of the planning approval procedure are governed by the general provisions of §§ 72 to 78 of the Administrative Procedures Act (VerwVfG). Within the meaning of § 68(3), nos. 1 and 2 of the WHG, the plan may only be established or approved if an impairment of the common good is not to be expected and other requirements of the WHG as well as other public-law provisions are fulfilled.