26 February 2013 22:30 [Source: ICIS news]
LUDWIGSHAFEN, Germany (ICIS)--BASF’s chief executive called on Tuesday for German policymakers to take a “sober” approach to the debate on hydraulic fracturing (fracking), as the company re-emphasised its desire to explore the country’s shale gas potential.
Speaking at a press conference at the German chemical giant’s Ludwigshafen headquarters, CEO Kurt Bock counselled that the debate around shale gas extraction in Germany should not be allowed to become a subject of hysteria for politicians or the public.
He said: “We have repeatedly said that we would like to test what is possible in Germany ... Once the environmental compatibility tests show positive results - and we see no reason why this should not be the case - we need the legal certainty that this method can be used.
“I hope that the discussion will be more sober now. We have to watch out that fracking does not become the next fear topic in the public, as there is no reason for this whatsoever,” Bock added
Bock’s comments coincide with German energy minister Peter Altmaier announcing that the policymakers are to prepare federal rules for hydraulic fracturing, popularly known as fracking, in the country.
Shale gas extraction has been the subject of controversy across Europe, with French President Francois Hollande maintaining a ban on the practice in the country. The UK is preparing to allow fracking to recommence after it was suspended in June 2011 following several small earthquakes in northwest England.
The shale gas boom in the US has fuelled fears in the European chemicals industry that the sector is becoming less competitive compared to North America, due to the disparity in gas prices between the two regions following the advent of widespread hydraulic fracturing in the US.
Bock noted that BASF qualifies as a US competitor itself, with €14.6bn ($19.2bn) of its €78.7bn group sales generated in the region in 2012, but added that not all competitors may be as insulated against US competitiveness as BASF.
He said: “The price in the market is not set by the cheapest producer, but by the marginal producer, and the marginal producer is the one that is still competitive at the given amount of demand in the market.
“In that respect, I can assure you that our production units are well safe-guarded against that kind of US competition. There are other competitors out there that might have a cost issue, but not BASF,“ he added.
($1 = €0.76)
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