• Natural Gas News

    Dutch Quake Reopens Gas Debate

Summary

The strongest earthquake in the Netherlands since 2012 has revived debate of how much gas should be produced from its large Groningen gas field.

by: Mark Smedley

Posted in:

Natural Gas & LNG News, Europe, Corporate, Litigation, Exploration & Production, Political, Ministries, News By Country, Netherlands

Dutch Quake Reopens Gas Debate

The strongest earthquake in the Netherlands since 2012 has revived debate of how much gas should be produced from its large Groningen gas field - currently capped at 21.6bn m3/yr, or 40% of what it produced in 2013.

Eric Wiebes, who became economy and climate (EZK) minister October 2017, said a few hours after the 3.4 magnitude tremor 3pm at Zeerijp January 8“The impact of the earthquakes for the people in Groningen is enormous. People are confronted with damage to their homes; the earthquake once again underlines the need to further reduce gas production -- because safety comes first."

“That is why gas extraction has already been reduced considerably in recent years,” he added: “And we are taking measures to further reduce gas production. The aim is to reduce the demand for Groningen gas [annually] by 3bn m3 in the period up to 2021, compared to 2017. In addition, we are working on scenarios on a further reduction of gas extraction after 2021.” Both NAM, as operator of the Groningen field, and the state regulator for mining (SodM) are investigating the cause of the earthquake, said Wiebes.

Local reports said there had been 316 reports of damage to property after the January 8 quake, but no casualties were reported.  Wiebes is to visit the Groningen region January 10.

A top court in Netherlands ruled November 15 that the cap on Groningen gas production should remain at 21.6bn m³/yr, pending a new decision on the cap by the EZK during 2018.

Until end-September 2016 the cap was 24bn m3/yr, and this cap was due to have continued until September 2021 but was unexpectedly revised downward earlier last year by Wiebes’ predecessor Henk Kamp.

Kamp’s revised 21.6bn m3/yr cap was successfully challenged in the court last year by both NAM (owned by Shell and Exxon) – which said it did not understand the reasons for cutting it from 24bn m3/yr – but also by local groups opposing continued gas extraction. The court ruled that the ministry “failed to properly substantiate his previous decision to allow 21.6bn m³ to be extracted per gas year over the next five years” and ordered it to publish a new one within 12 months, but agreed to maintain the 21.6bn m3/yr cap on an interim basis until then.

In October 2017, political parties forming the new Dutch coalition government had agreed a platform that included reducing the Groningen cap to 20.1bn m3/yr by 2021. Prime minister Mark Rutte, EZK minister Erik Wiebes and his predecessor Henk Kamp belong to the centre-right VVD party, the largest both in the four-party coalition government sworn in on November 2017, and also in the coalition that governed for five years before that.

However the mid-November court ruling that the minister must justify any new cap -- whether higher, lower, or the same as the current 21.6bn m3/yr -- takes precedence over any such political agreement.