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After closing the NAM Groningen gas tap, a trajectory full of obstacles follows

Printed below is an English translation of an article published today by the Dutch Financial Times, Financieele Dagblad.

The whole process was given a new dynamic by the earthquake in Zeerijp on 8 January.

After closing the gas tap a trajectory full of obstacles follows

Louis Hoeks, Carel Grol • Economics & Politics

With seven-mile boots, Eric Wiebes steps through the Groninger gas file, culminating in the Cabinet decision that was made public on Thursday. By 2030, seven decades after the discovery of the first Groningen gas at Slochteren, the gas tap will close. ‘A turning point’, the Minister of Economic Affairs and Climate said correctly. “Historically,” MPs said, also from the opposition. Friend and foe were surprised by it.

The speed with which the VVD minister is operating is impressive. The coalition still agreed to keep gas production at 20 billion cubic meters per year. The whole process was given a new dynamic by the earthquake in Zeerijp on 8 January. Then it became clear that the consensus in the coalition agreement was out of date.

Last month Wiebes decided to reduce the extraction to 12 billion cubic meters per year. Where in a debate he once suggested that ‘we all have to get rid of the gas’, there is now a concrete end date. Wiebes announced when he took up office to listen to the Groningers. On Thursday, the minister acknowledged that these discussions had led to this decision. ‘I fought for the Groningers’, he did not speak without feeling for drama.

Listening ear

Where Wiebes criticized Henk Kamp rather harshly by speaking of ‘governmental failure of non-Dutch proportions’, he was now milder about his predecessor and party member. Under Kamp, gas extraction was reduced by 60%, Wiebes continued to repeat. But where Kamp was accused of operating technocratically, Wiebes was praised from the start for his listening ear.

The favorable economic star makes it easier to completely reduce gas production. Yet, after the euphoria, a trajectory full of traps and clamps follows. Wiebes considers the economic and financial consequences of minor importance. Questions about that referred Wiebes and Prime Minister Rutte to Wopke Hoekstra. The Minister of Finance will provide more clarity on this in his Spring Memorandum, which must have been sent to the House by 1 June at the latest.

The gap that the reduced gas yields have in the budget is limited. But in order to absorb the reduction in the demand for gas, ‘in the government’s words’ strong measures are needed on the supply and demand side’. The costs of this are included in the energy bill.

Nitrogen plant

In order to be able to purchase foreign gas, the network will be adapted and a nitrogen plant will be set up in Zuidbroek, Groningen. Some of that gas is probably from Russia, with which the Netherlands has a difficult relationship. In addition, homes must be made free of natural gas and companies, such as energy-intensive greenhouse horticulture, become less dependent on gas. The reduction of gas production will also have negative consequences for Groningen employment.

Finally, nobody knows for sure whether Shell and ExxonMobil, the owners of the NAM, claim compensation. But Wiebes assured: ‘It is up to me that there is no claim for the gas that is not won.’

Despite their euphoria, the people of Groningen will wonder why this took so long to come. Supervisor State Supervision of Mines already advised in 2013 to reduce gas production in Groningen to 12 billion cubic meters per year. If in the rest of the Netherlands solidarity with the North has subsided, the down-to-earth question will follow what the decisiveness of the minister will cost. Wiebes does not say for nothing: ‘Love goes through the stomach, support through the wallet.’

SOURCE

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