Crude Oil and Gas

Crude Oil

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 almost 23 million tonnes as of 1 January 2024. Most of the crude oil reserves are in the North German Basin, primarily in Schleswig-Holstein and Lower Saxony. At the end of 2022, there were 43 oil fields in production.

Economic importance

With a share of around 35% 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 about 79% (2022) and 77% (2023) generally account for a much larger share than renewable forms of energy.¹ In 2022, domestic oil production amounted to around 2% of Germany’s annual consumption and the share 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. Crude oil imports in 2022 rose by about 7 million tonnes compared to the previous year, to about 88 million tonnes and fell to about 77 million tonnes in 2023. These imports in total were valued at €61 billion and came from 30 countries, with 41% of the imported crude oil alone coming from Russia (22.4 million tonnes), the US (12 million tonnes) and Kazakhstan (9 million tonnes) – all figures for 2022.² In 2023, Norway, the US and Kazakhstan delivered the largest volumes. Until mid-2023, Russian crude oil was imported exclusively in the form of linefill (residual quantities in the Druzhba pipeline, about 0.2 million tonnes) and has since no longer played a role in the area of crude oil imports.³ Germany produced slightly less than 2 million tonnes of crude oil in 2022 and about 1.6 million tonnes in 2023.⁴ The country’s share of global oil production amounted to approx. 0.04% in 2022 and 0.03% in 2023. The value of crude oil produced in Germany in 2022 is estimated to be €1025 million, which represents 0.03% of GDP. Crude oil accounted for around 6% of the total value of natural resources produced in Germany in 2022.

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 2022 international comparison of crude oil-producing countries, Germany was in 59th place (1970: 26th place). At the end of 2023, 1,940 persons were employed in oil production in Germany (see also Employment and Social Affairs).⁵

Extraction

In 2022, 43 oil fields were in production in Germany. These fields extract oil by means of some 683 production wells in drilling installations (onshore) and production platforms (offshore). In 2022 and 2023, 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, 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 platform and by oil well facilities on the mainland. This oil field accounted for about half of Germany’s total crude oil production in 2022 and 2023.

Uses

Crude oil is a fossil fuel and mainly used as fuel for vehicles and means of transport and for heating buildings. Over the last few years, oil has accounted for 93% of energy consumption in the transport sector and has been used in the form of gasoline, diesel and aviation fuel.⁶ Oil makes up around 20% of the energy used for heating buildings. Crude oil is also used in the chemical industry in particular, for example in the production of plastics and dyes, foams, detergents, medicines, lubricants and cosmetics.

 

Natural gas​

History

In 1910, natural gas was discovered while drilling for water in Neuengamme, today a district of Hamburg. 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 a 1% 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 (from 12 to about 20 billion m³ (Vn)⁷ raw gas between 1970 and 2005). This was accompanied by a steady expansion of the gas infrastructure. In 2005, domestic natural gas production covered around 25% of German natural gas consumption. Since then, however, production has declined. The sure and probable reserves of natural gas are also declining. These amounted to around 38 billion m³ (Vn) as of 1 January 2023. 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.

Economic importance

Natural gas is still the second most important source of energy in Germany with a share of around 24% of primary energy consumption. In 2022, natural gas production in Germany amounted to around 5.3 billion m³ (Vn) of raw gas, covering only about 5% of domestic natural gas consumption. This decreased by around 16% in 2022 compared to the previous year. In 2022, 1449 TWh of natural gas valued at €74 billion were imported. The most important importing countries in 2022 were Norway (475 TWh), the Netherlands (475 TWh) and Russia (316 TWh). Compared to previous years, the effects of the war in Ukraine have significantly changed German gas import structures. From September 2022, the supply of Russian pipeline gas to Germany was stopped completely. Apart from that, there was a reduction in imports (-13%) compared to the previous year. A considerable proportion of the natural gas imported was re-exported to neighbouring European countries (535 TWh). At the end of 2022, LNG (liquefied natural gas) was imported directly to Germany for the first time using the floating LNG terminal in Wilhelmshaven.⁸ In terms of the economic significance of domestically produced natural gas, Germany ranked number 49⁹ in the comparison of all natural-gas-producing countries in 2022. The country’s share of global natural gas production amounted to just under 0.1% in 2022. The value of the natural gas extracted in 2022 amounted to an estimated €4.2 billion. That is equivalent to about 0.1% of GDP. Natural gas accounted for around 22% of the total value of natural resources produced in Germany in 2022. At the end of 2023, 1,065 persons were employed in the German production of natural gas.¹⁰

Extraction

Almost 99% of German natural gas was extracted in Lower Saxony in 2022. Other Federal States (Saxony-Anhalt, Thuringia and Bavaria) contributed only marginally to the total production. Natural gas was extracted from 280 production wells on 66 gas fields. Like crude oil, natural gas can be found in underground deposits. Similar to the exploration of crude oil, the exploration of natural gas takes place primarily through seismic surveys and exploration drilling. Natural gas is extracted through a riser pipe inserted into a borehole that is stabilised with cement and steel.

In addition to the development of conventional deposits, non-conventional natural gas deposits could be developed, too. Non-conventional deposits include natural gas deposits in shale, clay, marl and coal seam rock, that can be developed using “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. non-conventional deposits), on the other hand, is generally not permitted in Germany until further notice. This excludes up to four test drillings. However, there must be scientific monitoring.^{11, 12} The German Bundestag has not yet made use of the opportunity to review the ban on fracking on the basis of the report submitted by the Expert Commission on Fracking in 2021.¹³ The topic of fracking continues to be discussed controversially in Germany.

Uses

As a fossil fuel, natural gas is mainly used in industry (36%) and in private households (32%, mainly for heating). In addition, it is used to generate electricity (12%) in the trade, commerce and services sectors (13%) and in district heating/cooling (including combined heat and power plants; 6%). In transport, natural gas plays a very minor role as a fuel. 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 [AGEB 2023], for a detailed source reference see other sources in the endnotes/sources.

² A list of the most important oil-producing countries 2022 can be viewed here: https://www.bafa.de/SharedDocs/Kurzmeldungen/DE/Energie/Rohoel/2021_12_rohloelinfo.html (accessed 21 June 2024).

³ Federal Statistical Office (2023): Oil imports from Russia decreased to 3,500 tonnes in January 2023. URL: https://www.destatis.de/DE/Presse/Pressemitteilungen/2023/03/PD23_098_51.html (accessed 13 June 2024).

⁴ Information on significant exploration projects can be found, for example, here: https://nibis.lbeg.de/DOI/dateien/GB_49_2023_Text_7_web.pdf; Crude oil production in Germany – BVEG, BGR – The BGR – New BGR report on the natural resources situation in Germany (bund.de) (accessed 27 June 2024).

⁵ Federal Employment Agency (2024), for a detailed source reference, see endnotes/sources.

⁶ AG Energiebilanzen e.V. [Working Group on Energy balances] (2023): Evaluation tables for Germany’s energy balance. URL: https://ag-energiebilanzen.de/wp-content/uploads/2023/10/awt_2022_deutsch.pdf (accessed 13 June 2024).

⁷ Standard volume (Vn).

⁸ AG Energiebilanzen e.V. [Working Group on Energy balances] (2023): Energy consumption in Germany in 2022. URL: https://www.destatis.de/DE/Presse/Pressemitteilungen/2023/03/PD23_098_51.html (accessed 13 June 2024).

⁹ Information on significant exploration projects can be found, for example, here: https://nibis.lbeg.de/DOI/dateien/GB_49_2023_Text_7_web.pdf; Crude oil production in Germany – BVEG, BGR – The BGR – New BGR report on the natural resources situation in Germany (bund.de) (accessed 27 June 2024).

¹⁰ Federal Employment Agency (2024), for a detailed source reference, see endnotes/sources.

¹¹ German Federal Ministry for Economic Affairs and Climate Action (2022). URL: https:/http://www.bmwk.de/Redaktion/DE/Artikel/Industrie/fracking.html (accessed 20 July 2024).

¹² Cf. Section 13a (2) and (6) of the Water Resources Act. URL: https://www.gesetze-im-internet.de/whg_2009/__13a.html (accessed 14 June 2024)

¹³ Expert commission on fracking pursuant to Section 13a (6) of the Water Resources Act (2023). URL: http://www.expkom-fracking-whg.de/ (accessed 25 July 2024)