Universiteit Oxford: ‘Publieke opinie in Nederland nu anti-gas’

Consequences for the whole of Europe
In the longer term, however, changes will need to happen and the reduction in Dutch gas availability will be the key catalyst to action. The national market will need to change, but these evolutions will also have consequences for the whole of Europe, especially for those countries in the North-West whose imports of Dutch L-gas and H-gas have historically been crucial elements of their supply. H-gas is available from other sources, essentially from Norway, Russia, North Africa in southern European markets, LNG imports from an even larger range of suppliers, and finally from the spot markets. Whether these countries/markets have enough reserves, production capacity and/or can be commercially attractive to replace 40 bcm of Dutch gas surplus is beyond the scope of this paper, but the question needs to be considered as there can be implications for increasing reliance on fewer suppliers of pipeline gas and rising import dependency.

Germany, Belgium, France
Regarding L-gas markets, large investments to convert L-gas networks, equipment and appliances to be able to use H-gas are needed and anticipated. The Netherlands is taking steps to transition to an H- gas system while importing countries have already started the process, earlier than anticipated: it is well under way in Germany and is gaining momentum in Belgium and France as all three countries will cease to import Dutch L-gas by 2030. It will then be replaced by imported H-gas, although the exact quantity of additional imports required is uncertain as the energy transition to a low carbon economy will drive the decarbonization of the heating sector (the major consumer of L-gas) in most countries in Europe post-2030.

No signs of threat to security of gas supply
As of early 2017, there were no signs that there would be any major threat to security of gas supply in North West Europe as a consequence of the restrictions taken on Groningen gas production, but the rapid change means a big increase in imports from elsewhere with potential security of supply implications (volumes, capacity, prices, and/or dependence). Dutch production surplus (production minus demand) fell from about 40 bcm in 2013 to only about 10 bcm three years later, and by 2030, it will likely have disappeared altogether. In other words, within a five year period, Dutch H-gas exports fall and disappear (by early 2020s) and L-gas exports will be halved by 2025 and will disappear by 2030.

Dramatic evolution for Europe
These are important trends not just for the Netherlands but for the whole European gas market. This is a dramatic evolution for the European supply as a whole that is probably well under-appreciated. Regional production peaked in 2004 at 341 bcm and was down to 257 bcm in 2016 (-84 bcm). This author expects regional production to decline further rapidly: to 212 bcm in 2020 and to 146 bcm in 2030. This scenario accounts for 111 bcm decline between 2016 and 2030, of which 30 bcm come from the Netherlands alone. This scenario was calculated in May 2017, but there is a risk that Groningen production could be reduced even further before 2021. Court actions to completely shut the field’s production down have so far been unsuccessful, but this may not be the case in the future. Additional revisions from the Government are also to be expected, probably on an annual basis, especially if there is further serious seismic activity in the Groningen area.

It is his paper offers some food for thought on the challenges but also the prospects and expectations the Dutch gas industry looking ahead to a 2030 horizon. (…)’