Germany could boost domestic production to ease gas supply crunch

Germany could reduce its reliance on Russian gas imports by increasing its domestic production at fields concentrated in the north of the country, the head of a gas lobby said on Thursday. German gas fields provide about 5% of the total annual consumption, producing some 5.6 Bm³ of natural gas in 2020, down 15% from a year earlier.

"We could for example increase national production by around 20%," Timm Kehler, director general of Zukunft Gas, said in an interview with Reuters.

The German government has unveiled a strategy to wean Europe's biggest economy off Russian oil and gas imports in response to Russia's invasion of Ukraine.

Since the invasion, Germany has suspended certification of the Nord Stream 2 pipeline to bring Russian gas under the Baltic Sea. It has also announced a national gas reserve and plans to build two terminals for liquefied natural gas imports, and wants to put on standby decommissioned coal plants to save gas in power generation.

Production of gas and oil has been declining in Germany, mainly because fracking is banned and nature protection laws make it difficult to seek permission for new drilling.

Kehler said it would take only a few months to secure the funds needed to start drilling at new sites as exploding energy prices make such investments attractive.

"Technically this could be done in a few months, but the approval process takes longer," he said, adding that the share of biogas, which can be upgraded to the quality of natural gas, could also be increased to ease the energy crunch.

Biogas makes up 1% of Germany's yearly gas consumption of some 100 billion cubic metres, which is used mostly for heating.

An analysis of Germany's gas supply by the Independent Commodity Intelligence Services showed that in December 2021 Russian pipeline gas accounted for 32%, Norwegian gas 20% and Dutch 12%, with storage 22% and the rest from other smaller sources including domestic production.

(Writing by Joseph Nasr Editing by Frances Kerry)

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