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Energy crisis: Can Germany's oil and gas sector deliver?

Astrid Benölken | Ashutosh Pandey Wietze, northern Germany
April 21, 2022

As Germany looks to ditch Russian oil and gas for good, its domestic energy industry is a key side actor — but can it step up to the plate? We search for clues in the village where Germany's oil sector was born.

An old oil rig at the German Petroleum Museum
At present, Germany relies on imports to meet over 70% of its energy needsImage: Astrid Benölken/DW

In many places, grass has covered the past, literally. Museum director Stephan Lütgert scrapes aside a patch of green with his shoe to reveal a metal pipe; a few steps away, the grass hides a pile of oil sand that has melted into a black, tarlike asphalt blanket. "Our museum stands in the middle of the remains of an oil field," Lütgert says proudly.

Anyone visiting the German Oil Museum, however, will not only find traces of an oil field with horse-head pumps and abandoned drilling rigs, but will also discover — upon closer inspection — that they are at the birthplace of the German oil industry.

First oil bores worldwide

Of all places, it was here, in the otherwise inconspicuous village of Wietze, near Hanover, in Lower Saxony, says Lütgert, that the world's first oil bores were drilled in 1858-59 — even before oil wells were drilled in the United States. Later, the "black gold" brought the small moorland village somewhat of an oil mania.

At present, Germany relies on imports to meet over 70% of its energy needs. The country's domestic production covers just 2% of its crude oil consumption, and 6% of natural gas consumption, a trend pointing downwards amid fast depleting oil and gas fields and the absence of any major recent discoveries.

An infographic showing falling oil and natural gas production in Germany

Things used to be different. At its peak, Wietze alone accounted for 80% of domestic oil production. As Germany wrestles with its energy dependence on Russia in the wake of Moscow's invasion of Ukraine, the museum recalls times when Germany was not independent of energy imports but certainly much more confident when it came to oil.

Since Russia's invasion of Ukraine began, Germany has been reducing its consumption of Russian oil and gas. While Russian oil met a third of Germany's oil needs prior to the war, it has now come down to a quarter. 

If Germany imports even more oil from other countries, a complete break from Russian oil would be possible by the end of the year, the government has said.

Berlin is finding it much more difficult to shun Russian gas. It is true that Germany now obtains only 40% of its gas from Russia instead of about 55% before the war. But a complete shift, the German government says, is not possible until the summer of 2024 — and only if less energy is consumed.

Would it help if Germany were to produce more of its own oil and gas? That was once the case in Wietze.

An archived picture from early 20th century showing oil wells in Wietze
Wietze was called 'little Texas in the moorland' thanks to its massive oil industryImage: Deutsches Erdölmuseum

Wietze's oil rush

It all began quite unspectacularly when Georg Konrad Hunäus came across oil during his test drilling in 1858 in Wietze. Hunäus, a professor at the time, had rather hoped for coal. At that time, oil was used as wagon grease, as a medicine — it only gained in value later, as petroleum in lamps and fuel for engines.

But when, four decades later, another well in Wietze struck oil, the timing was right: An oil rush swept the village.

Museum director Lütgert climbs a 54-meter (178-foot) metal rig at the edge of the museum and gestures expansively at the grassland in front of him and the farmhouses in the distance. "This is where the rigs used to be," he says.

Within a very short time after the discovery, administrative buildings sprouted up in the village, and so did a train station and a refinery. Soon, a network of pumps, pipes and more than 2,000 boreholes covered the meadows; a network of kilometers of railroad tracks crisscrossed the landscape.

It's around this time that the "Wild West," as Lütgert calls it, creeps into the nondescript hamlet. Brawls, knife fights and shootings become all too frequent. But for some old-established farmers with a well-suited plot of land, the oil rush becomes a blessing. Even today, the partly magnificent farmsteads bear witness to the wealth that oil brought to Wietze.

By the beginning of the 20th century, oil companies, lured by larger, more successful oil fields elsewhere, started falling out with Wietze.

"Oil deposits are finite — you get to see that again on a small scale in Wietze," Lütgert says.

After oil stopped gushing out of the wells in Wietze, mining was moved underground for a few more decades, where miners extracted oil sand from the earth in a network of tunnels nearly 100 kilometers (60 miles) long. But by the 1960s, when protective tariffs were abolished, it was no longer economically viable to extract oil in Wietz. Oil from abroad became cheaper.

Germany depends on oil and gas imports

At the height of the oil boom in Wietze in 1909, 113,000 metric tons (124,560 short tons) of crude oil were produced there — ridiculously small quantities when one considers Germany's hunger for crude oil today. In 2020, Germany consumed just under 95 million tons of crude oil, according to the German association for natural gas, petroleum and geothermal energy, only a fraction of which was produced in the country. In terms of natural gas, Germany consumed 87 billion cubic meters of gas, of which 94% was imported.

"We have always been import-dependent, at least since the postwar period," says Andreas Seeliger, professor of energy economics at the Niederrhein University of Applied Sciences.

No other country in Europe consumes more oil and gas, most of which comes from Russia.

With Germany transitioning away from Russian oil and gas, local oil and gas producers stress the gap cannot be completely bridged with domestic production in a country like Germany with limited natural resources.

"No one is expecting the indigenous production alone to replace the gap that may open up; however, every barrel counts, and every molecule counts," says Robert Frimpong, managing director of Wintershall Dea Germany, the largest oil producer in the country — which, incidentally, was also involved in the now shelved Nordstream 2 pipeline project.

A horse head pump as an exhibit in the German oil museum
The remnants of Wietze's rich oil history can be found in the German oil museumImage: Astrid Benölken/DW

Boosting domestic oil and gas production

The most promising way to boost domestic oil and gas production in the short term is not to develop new gas and oil fields in Germany, but to optimize the fields that already exist, Frimpong says.

"When it comes to pure exploration, looking for new fields, we see less potential within Germany; however, others may not rule that out," he said.

Wintershall Dea Germany operates various oil and gas production sites, including the largest offshore drilling and production platform, Mittelplate in the Wadden Sea. The Mittelplate is by far the most productive oil field in Germany, accounting for more than half of Germany's annual domestic oil production.

Wintershall Dea plans to expand the southern part of Mittelplate.

"If the approval procedures go through quickly, oil production could start as early as 2025," Frimpong says.

Mittelplatte drilling rig
Wintershall Dea plans to expand the southern part of MittelplateImage: C. Kaiser/blickwinkel/Imago Images

Resources in Germany: Fracking for future?

Longer lifetimes for nuclear power plants, the construction of the first liquefied natural gas terminals, a delayed coal phase-out: Russia's invasion of Ukraine has brought back into debate much of what had long been considered off the table in terms of energy policy. Now murmurs around hydraulic fracturing, or simply fracking, are also getting louder. 

"Unconventional" fracking in shale, clay or coal seam rock has been banned in Germany since 2017 because of the potential for long-term environmental damage and groundwater contamination.

In April, Bavaria's state premier, Markus Söder, proposed that the possibilities for unconventional fracking in Germany be reviewed once again. German Economy Minister Robert Habeck, however, has repeatedly rejected fracking as an option.

According to BVEG, the German association for natural gas, petroleum and geothermal energy, up to 2.3 trillion cubic meters (610 trillion gallons) of natural gas can be tapped from German shale rock, and 450 billion cubic meters from coal beds through fracking.

By optimistic estimates, energy industry researcher Seeliger believes that shale gas, for example, could completely replace gas imports for a decade — but only in the long term and not as early as next winter. Fracked German gas and oil, Seeliger says, would strengthen supply security, gas transport costs would be lower, and Germany would already have an ace up its sleeve in price negotiations due to its theoretical availability.

An infographic showing how fracking works

Technically possible, politically unthinkable

Seeliger says the time for such arguments is over: A majority of Germans are clearly against fracking, at least in their backyard.

"Realistically, we can get a few billion cubic meters out through unconventional fracking," Seeliger says, "but I don't think anyone wants to touch that hot potato."

Wintershall Dea's Frimpong shares a similar view. "It's technically feasible, but we see that the current political and public discourse is not in favor of it."

So, because Germany's indigenous fossil fuel resources and renewables do not yet satiate its hunger for energy, there is only one thing that could help at the moment, Seeliger says: to obtain natural gas and crude oil from as many different sources as possible — something Germany is already doing.

Even in Wietze, there are still shale deposits that could probably be extracted with fracking. "If you're really desperate, we might still be an option," says Lütgert. "But that can't be the goal."

From the years when Wietze was Germany's oil hub, one lesson above all has stuck: how fleeting the rush for raw materials is. The oil produced in Wietze has long since been processed, burned, disappeared; the wild times are over, and the shafts of yesteryear have filled in.

"People who have moved here in recent years have no idea what happened here," Lütgert says.

Is a boycott of Russian gas feasible?

Edited by: Srinivas Mazumdaru, Nicole Goebel

Ashutosh Pandey
Ashutosh Pandey Business editor with a focus on international trade, financial markets and the energy sector.@ashutoshpande85