RE: Dutch gas sector (cont.)8 Aug 2021 18:19
Commentary from fd.nl (Gronigen is an onshore field)
With the closing of the gas tap in Groningen, a widely supported decision to prevent further earthquake damage, the cabinet deliberately decided a few years ago that the Netherlands will become more dependent on foreign countries.
After all, the disappearance of the largest gas production location in Europe cannot be compensated for by the small gas fields in the Netherlands. The demand for natural gas will remain high in the Netherlands in the coming years, also because gas will serve as a back-up for periods when weather-dependent renewable energy fails. Less supply, if demand for gas remains the same or even increases, automatically means that more gas has to come to the Netherlands from other countries.
That shouldn't be a problem. There is a sufficient supply of natural gas worldwide. The government therefore sees no reason to take additional measures to guarantee security of supply in the future. The market is doing its job.
That has indeed always been the case in the past, but that is by no means a guarantee for the future. The dynamics on the gas market is changing. Whereas until about ten years ago natural gas only flowed through pipelines, the Netherlands can now also buy natural gas in liquid form on board ships in Qatar, Algeria or Russia. This is good for diversification, but if shortages threaten, the Netherlands will have to compete on the international spot market with countries such as China, India and Japan, which also need large quantities of gas.
This increasing international demand, combined with a cold spring, has pushed up prices on gas markets. High prices are one thing, dependence on large suppliers abroad (read: Russia), who are reluctant to fill Dutch gas storage facilities in times of high prices, is another.
These circumstances require a more proactive government policy to guarantee security of supply. A holy belief in the market no longer fits in this context. It is not without reason that the Dutch Mining Council, an independent advisory body of the Ministry of Economic Affairs, recommends paying more attention to security of supply when making decisions about annual gas extraction in Groningen. The Mijnraad advises to phase out gas extraction from the Groningen field as planned, but not to end it irreversibly.
That is a difficult message for Groningen residents who long for peace in the ground after years of tremors and damage, but it does provide a necessary backstop to guarantee security of supply in the future.
Lees het volledige artikel: https://fd.nl/opinie/1407329/houd-optie-op-gas-uit-groningenveld-open-shh1caCLAmwp
Sign In
Follow the stocks
