Germany CEOs Lament Lost Innovation Amid Fracking Angst

  • Date: 10/06/14
  • Sheenagh Matthews, Bloomberg

Germany has rejected genetically modified crops, nuclear power and magnetic levitation trains. Now, the country that invented the modern car and X-ray technology is adding fracking to the list of innovations it’s wary of. “If we habitually reject risk, then we’ll run our society into the grave.”

 

Business leaders had lobbied for the extraction method, which injects water and chemicals underground, to lessen Germany’s dependence on Vladimir Putin’s Russia where a third of its natural gas supply is derived. Last week, the government started preparing a law to limit fracking to rare cases, unlike in the U.S. where the practice is widespread.

The restrictions are a setback for executives, who say policymakers bow too easily to concerns in the population that new technologies will harm the environment. Germany, which has the most powerful Green Party in Europe, is missing out on industries worth more than $200 billion globally, or about 6 percent of its gross domestic product, including nuclear power and fracking. Executives argue the risk-aversion hampers the competitiveness of a nation that discovered nuclear fission used to detonate atomic bombs, and has been led by a trained physicist, Angela Merkel, since 2005.

“If we habitually reject risk, then we’ll run our society into the grave,” said Karl-Ludwig Kley, the chief executive officer of the world’s oldest chemical and pharmaceutical company Merck KGaA (MRK), in a May 13 panel discussion in Frankfurt.

Fukushima Accident

Germany is not alone in rejecting extensive fracking, genetically modified crops and nuclear power in the face of widespread political, scientific and popular concern over their environmental impact.

Fracking is banned in France and the U.K. government, while supportive of the practice, has faced opposition from numerous groups such as the Green Party and Greenpeace. Genetically modified crops, widely grown in Asia as well as North and South America, are also spurned by France and Austria. Italy and Greece had already rejected nuclear power before Merkel decided to shut down all German reactors by 2022 following the Fukushima plant accident in Japan three years ago.

“With fracking, there are still too many questions that haven’t been answered yet,” said Volker Bouffier, the prime minister of the federal state of Hesse, which last month backed a decision to uphold the current ban of the practice on concern that chemicals could seep into drinking water. “Every politician has to ask him or herself the question: Can I take responsibility for this?”

Full story