Niebel was born in Hamburg on 29 March 1963. After his Fachhochschulreife (college entrance qualification) in 1983, Niebel lived for one year in a Kibbutz in Israel. Later he served for eight years as an airborne infantry officer in the Bundeswehr in Calw. He then studied at the German College of Public Administration in Mannheim and finished his studies in 1993 as Diplom-Verwaltungswirt (similar to a Master of Public Administration degree). From 1993 to 1998, he worked at an employment bureau in Sinsheim, a part of the Federal Employment Office of Heidelberg.
Niebel is married and has three sons.
In 1990, he joined the FDP and was co-founder of the Heidelberg division of the Junge Liberale. Since 2003 Niebel has been a member of the Federal Board of the FDP and of the curatorship of the Friedrich Naumann Foundation. On 5 May 2005, the Federal Board elected him secretary general of the FDP.
Niebel has been a member of the Bundestag since 1998. From 2002 to 2005, he was chairman of the State group of Baden-Württemberg in the parliamentary group of the FDP. Since 1998, he has been the speaker of the parliamentary group on Labor Policy. In addition to this, Niebel has been a member of the group of German-Israeli parliament members since 1998. At the 2009 election, he stood unsuccessfully in the single member constituency of Heidelberg, but was elected from the land list.
From 2000 to 2010, Niebel served as the vice president of the Deutsch-Israelische Gesellschaft (German Israeli Society).
In January 2011, Niebel met with Israeli Deputy Foreign Minister Danny Ayalon and signed a joint Declaration of Intent aimed to increase bilateral cooperation in effort to assist developing nations, agreeing to work towards the rehabilitation of the contaminated Lake Victoria in Kenya, the main source of water for several states and one of the sources of the Nile River. In February of the same year Ayalon and Niebel met again to examine aid to the new Republic of South Sudan.