Fracking Beer

The French have their wine, Russians have vodka, and Germans have beer.

Different countries are often characterized by their foods. Belgian chocolates, Swiss cheese—it makes your mouth water. In Germany it’s beer: over 1300 brewers produce some 5000 different beers employing about 25,000 workers—all governed by a 500-year old law, the “Reinheitsgeboot.” It’s a part of their national character.

Recently the Association of German Breweries sent an open letter voicing its concerns that hydro-fracking—the process of unlocking gas or oil deposits from shale by pumping in pressurized water and sand—could endanger purity of the water that Germany’s brewers use.

It’s not irrational. Fracking breaks up the structure of the bedrock and allows oil and gas to migrate towards a well where they can be extracted. It’s reasonable to be concerned that some gas might make its way into the water supply. And if that water is critical to a national icon, watch out.

The controversy shows how compromise and politics have to be part of any new technology. Cheaper energy may be good for business, but not if it threatens their beer.

Douglas R. Tengdin, CFA

Chief Investment Officer

Leave a Reply

Your email address will not be published. Required fields are marked *