Less Russian gas, more Groningen gas? | ministries

Blog entry | 26-09-2022 | Ministry of Economic Affairs and Climate

Why stop gas extraction in Groningen?

In order to reduce the risk of earthquakes and to make Groningen safer again, the government decided in 2018 to phase out gas extraction as soon as possible. Gas extraction in Groningen has a long past. Gas was discovered in 1959 and for a long time this Groningen gas was central to the Dutch energy supply. In 2012 – after the heaviest earthquake ever measured in Groningen – it became clear that gas extraction is not without costs. This earthquake caused a lot of damage to buildings. It is expected that about 13,000 homes do not yet meet the safety standards: there may be an increased risk of collapsing in the event of a major earthquake. The intention is to completely stop gas extraction from the Groningen field by 2023, at the latest by 2024. In the meantime, the government continues to compensate for the damage and strengthen the homes of people in the North.

How do we weigh the pros and cons of gas extraction in Groningen in times of crisis?

Extracting more gas in Groningen has no effect on the international gas market and the price of gas, but the risks and uncertainty for people in the extraction area are increasing. That is what the State Supervision of Mines (SodM) says. Gas extraction from the Groningen field has yielded economic benefits for many years. The disadvantages only became fully visible later on. For people in the earthquake zone, the disadvantages are not in proportion to the advantages: recurring damage, a feeling of insecurity, frequent earthquakes, stress and decreasing house values.

Why are the disadvantages of gas extraction in Groningen so great?

Gas extraction from the Groningen field causes earthquakes and therefore poses a safety risk for the people living in this area. Many homes in the area do not yet meet the safety standard and need to be reinforced. The earthquakes in Groningen cause more damage than you would expect based on the magnitude of the quake. This is due to the fractures in the Groningen subsurface, the type of subsurface and because the earthquakes occur relatively close to the surface. The quakes cause damage to the houses and lead to a decrease in the value of the houses in the earthquake area. The earthquakes and the often long-term settlement of the consequences also lead to immaterial damage to residents in Groningen, such as damage to health, long-term uncertainty and earthquake stress. SodM states that gas extraction in Groningen cannot be continued in a safe manner.

Why are the benefits of gas extraction in Groningen limited?

The amount of gas that is traded worldwide is so great that extracting more gas from Groningen will have no effect on the gas price. The fact that the so-called low-calorific gas from Groningen differs from the gas on the international market also plays a role in ensuring gas supply. That is high-calorific gas. Dutch households are geared to low-calorific gas. For the vast majority of European residents, companies and industries, Groningen gas is not usable. Their equipment and installations are set up for high-calorific gas. Low-calorific gas and high-calorific gas are not interchangeable. We do, however, convert high-calorific gas into low-calorific gas in nitrogen factories to make it suitable for Dutch households. The Netherlands now supplies both low-calorific and high-calorific gas (from the small fields) abroad. Nearly all the capacity of the gas transport network for high-calorific fuel is currently being used, says Gasunie (GTS). We cannot therefore serve the international market directly with additional use of gas from Groningen. In the short term, this could only ensure that the demand from the Netherlands for high-calorific gas decreases. For this reason, increasing gas production in Groningen has only a very limited effect on the European gas market.

Are there situations in which the Netherlands continues to extract gas in Groningen?

The possible use of Groningen gas is only discussed if the safety of people is at risk because, for example, we no longer have gas to heat or cook hospitals. Only if there really is no other way. There are still fears that Russia will completely shut off the gas tap to Europe for a longer period of time. Even if this happens, Gasunie does not yet expect a gas shortage in the Netherlands in the coming winter. This does depend on, for example, the temperature and the availability of liquefied gas from other countries. The Netherlands therefore continues to prepare for the situation in which a gas shortage does arise. We are doing what we can to ensure that there is enough gas for the coming winter; we import liquid gas from abroad, among other things, and we focus on energy savings. Stopping gas extraction in Groningen as soon as possible is the only way to restore safety in the area and to remove uncertainty for the people in Groningen in the long run.