Europe's Biggest Natural Gas Producer Is Running Out Of Fuel

(Bloomberg) -- The European Union’s biggest natural gas producer is running out of reserves.

The Netherlands, the region’s biggest trading hub for the fuel, has used up almost 80 percent of its natural gas reserves, Dutch statistics office CBS said on Friday. Production fell 38 percent over the previous two years and is set to fall further as the government limits extraction because of earthquakes in Groningen, the province that houses the EU’s largest gas deposit, it said.

The nation of about 17 million people is struggling to contain tremors linked to gas production by a joint venture of Exxon Mobil Corp. and Royal Dutch Shell Plc that has damaged thousands of homes. The government budget has been hit by the caps on extraction and declining wholesale prices, with gas accounting for just 3 percent of state income in 2015, down from 9 percent two years earlier, the CBS said.

QuickTake Q&A: Earth-Shaking Woes at Europe’s Biggest Gas Field

“The production ceiling put in place for Groningen has had a definite impact on gas production during the last years,” CBS said. “Considering the Groningen field accounts for almost three-quarters of the remaining reserves, Dutch natural gas production will likely fall further, despite a small increase in production from the remaining fields, most of which are in the North Sea.”

The Netherlands produced 3.85 trillion cubic meters (136 trillion cubic feet) of gas since the discovery of the Groningen deposit in 1959, more than total global production last year, and has 940 billion cubic meters of reserves, CBS said. Output fell to 52 billion cubic meters last year, the lowest level since the early 1970s, from 84 billion in 2013.

Groningen gas production was capped at 27 billion cubic meters in the gas year that started Oct. 1, 2015. Parliament on Thursday approved a government proposal to lower the cap to 24 billion cubic meters a year for five years. 

State income from gas fell to 5.3 billion euros ($6 billion) in 2015, down from 15.4 billion euros in 2013, the CBS said.

To contact the reporter on this story: Rob Verdonck in Warsaw at rverdonck@bloomberg.net To contact the editors responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net Andrew Reierson, Alaric Nightingale

Copyright 2016 Bloomberg News.

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Cyril Widdershoven | Sep. 16, 2016
The total issue of Groningen is more than this, additionally the title is potentially wrong. The Dutch are not running out of fuel, if normal practice and investment support would be in place. However, political infighting, NGO and Groningen lobby groups have taken over the discussion, leaving NO room for an economic assessment and strategy to the current gas extraction position. Taking into account proven and possible reserves, which in the North Sea are much higher than currently taken into account, the life time of Dutch gas would be far beyond 2030. The main reason for current PRODUCTION decline is politics and a political unwillingness to confront economics but permitting political lobby (leftwing) and pressure groups to use Groningen and marginal field operations as an option to put in place too expensive wind-energy. Maybe a real assessment of this would be feasible an necessary.


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