Bloomberg View: Europe's Petrostates Fall Into the Oil Trap

Countries with vast natural resource income have a choice: Spend the money or save it for later. As the Netherlands and Norway are discovering, both have their disadvantages.

The Dutch Court of Audit has just released a damning report on the government's management of income from the Netherlands' natural gas fields over the past half century. It calculates that if the government had accumulated the revenues in a special fund, the roughly 265 billion in gas proceeds would have swelled to 350 billion euros ($442 billion at the current exchange rate) by January 2014.

Instead, the money largely disappeared into the Dutch treasury. The only traceable "gas money" was 26 billion euros used to finance some transport and environmental projects, including a railroad connecting Holland to the European high-speed network. If Holland had created a fund, the investment income alone would have been enough to cover half the cost of the projects, the audit court calculated.
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