The Oil Drum: Europe | Dutch government acknowledges peak gas

Dutch government acknowledges peak gas

Posted by Rembrandt on June 19, 2008 - 9:55am in The Oil Drum: Europe
Topic: Supply/Production
Tags: european gas, gas supply, natural gas, netherlands, peak gas [list all tags]

Today a historic moment took place. The Dutch government acknowledged in its new energy strategy that Dutch natural gas production has passed its peak (file in Dutch here). Stating that the peak occurred in 2007/2008 and the Netherlands will have become a net importer of natural gas by 2025.

Figure 1 - Dutch gas forecast from TNO commissioned by the Dutch ministry of economic affairs. Y-axis in billion cubic meters Groningen Field Equivalent Heating Content. Red are the rapidly depleting small gas fields onshore and in the north sea. Light Blue is the large Slochteren field in the province of Groningen. Dark blue is the yet to be found production from small fields.

[Editor's note: The Netherlands is Europe's second largest gas producer after Norway. When the Dutch Government announces that their gas production will now decline this has major consequences for European energy security, in my opinion.]

The forecast as presented is quite similar to a forecast I made two years ago which can be viewed here in Euan Mearns' excellent European Gas overview. The conclusion I made back then was derived from Dutch gas reserve figures, expected discoveries and the production cap on the Slochteren field. Dutch gas reserves have been declining since the 1980s.

Figure 2 - Dutch gas reserves and cumulative production from 1965 to 2007. Y-axis in billion standard cubic meter of natural gas. Red is cumulative production and blue are remaning reserves.

As a policy response the Dutch government wants to channel more of its income derived from natural gas production to sustainable energy. Currently 7 billion euro's a year flow into the pockets of the Dutch government from gas revenues into a specific investment fund. The fund is currently used for investments in new infrastructure (mainly roads) as well as scientific research. In the future a part should thus also go to energy investments to preserve energy stability for future generations. Sounds nice but I am skeptical since no hard euro's are mentioned.

The Dutch propose a bilateral oil and gas policy

The Dutch Government also has announced that it wants to strengthen relations with oil- and gas producers in the future. According to the report there are sufficient oil and gas reserves out there. For oil even twice as much as has been produced, a highly contested claim. It is not questioned at all whether actual production can meet demand in the near and long term future. The Dutch government simply copies the world energy outlook 2007 from the International Energy Agency on the oil- and gas situation. Namely, there are sufficient reserves but there is a lack of investment to bring these to the market. According to the Dutch government this should be solved by strengthening relations with current and future exporters. Especially bilateral relationships with Saudi-Arabia, Kazakhstan, Russia and Algeria need to be improved. From the rumors I have heard so far, our minister of economic affairs is going on a 'business trip' to Saudi-Arabia this weekend. So much for one voice in European Energy Policy....