Gas drilling: Municipality gives investors the cold shoulder - company does not give up

Created: 01/12/2022, 06:45

By: Andreas Höger

Dangerous neighbor?

Not far from the geothermal site in the Alte Au, a company wants to tap a gas field under Holzkirchen.

However, the municipality will probably not release a drilling site.

© Thomas Plettenberg

From the initial skepticism, a clear rejection emerges: the market community will probably speak out clearly against the plans of the company Terrain Energy to tap a natural gas field under Holzkirchen.

However, the investor does not give up and is now pursuing a plan B.

Holzkirchen

– Directly below the northern town center of Holzkirchen, at a depth of 4200 meters, there is a lucrative “gas target”, as it is called in technical jargon.

At least 650 million cubic meters of natural gas are suspected there.

A quantity that would at least be enough to supply all of Bavaria with gas for a week in a hard winter - that's how Mayor Christoph Schmid (CSU) had it calculated.

In fact, the company Terrain Energy, which is based in Munich and belongs to the English Evoterra Group, would not exhaust the deposit in a week, but gradually, over a period of ten to 17 years.

Access to this earth treasure is granted by a drilling license issued by the South Bavaria Mining Authority for the large-scale permit field "Egmating", which includes Holzkirchen.

In 2021, this "exploration permit for hydrocarbons" was extended until the end of November 2024.

Marcus Endres, Managing Director of Terrain Energy, made representations to the town hall in 2019.

His plan: get the market community, which thanks to its 70 million euro geothermal project has a lot of know-how to offer in the matter of Holzkirchner underground, on board and realize a natural gas well as a joint venture.

When gas became scarce after the Russian invasion of the Ukraine and prices exploded, the project became unexpectedly explosive – and Endres pushed the pace.

But his offers, including the prospect of a 10 percent share of the profits, aroused little enthusiasm in the town hall.

On the contrary.

"We fear that removing natural gas will change the seismics in such a way that our geothermal energy could be damaged," says Mayor Schmid.

The head of town hall had a 26-page "safety" report from the company checked by geologists he trusted - the company Erdwerk, which accompanied the geothermal project.

"Accordingly, the company's report shows not inconsiderable technical errors," says Schmid.

The Bavarian Ministry of Economic Affairs, which according to Schmid "sits between two chairs", recommended that a third, independent risk assessment be commissioned.

Clear signal to the investor

Schmid, however, does not want to get involved and play with open cards.

Since neither the Ministry of Economic Affairs nor the investor want to be held liable for possible geothermal damage, he will recommend that the municipal council reject the gas project at its meeting on Tuesday, December 6th.

"It's supposed to be a signal: you're not welcome here."

That would be a setback for the company.

The municipality could not only have helped with the "civil dialogue" and public acceptance, but would also have two well-suited natural gas drilling sites in the Alte Au (near the geothermal energy) and at Marschall (new building yard site).

"There are other drilling site options, privately owned and also in other communities," says Managing Director Endres and is combative, "It would have been easier with the community, but we are not dependent on them."

In order to resolve the expert opinion stalemate, Terrain Energy is currently preparing an application for a "commercial permit for the production of hydrocarbons", which will be submitted directly to the Bavarian Ministry of Economic Affairs.

You don't have to name a specific drill site for this, says Endres: "It is important to us that all authorities and supporters of public affairs are now heard." The managing director assumes that there will be no exclusion criteria and that the ministry will, if possible, by April Permission granted for natural gas production near Holzkirchen.

"We have to get started now," says Endres, who emphasizes that his company does not use the controversial fracking technique.

Conventionally produced, domestic gas could help build the bridge to the energy transition.

On the other hand, the entrepreneur knows that the political window for natural gas production in Germany could soon close again.

Terrain Energy has already invested around one million euros in the project.

The seven to ten million euros for the well, says Endres, "are ready".

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