July 6, 2022

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Mijnraad's advice: preparing Groningen to reopen the gas field |  Financial issues

Mijnraad’s advice: preparing Groningen to reopen the gas field | Financial issues

Although Climate Minister Rob Getten (D66) and D66 Secretary of State Hans Velbreev (Mining) have so far confirmed that the Groningen field will remain ‘in experimental light’ this year, and will be permanently closed in 2023 or 2024, experts advise due to the great uncertainty In the gas market because of the war Ukraine is different. The fact that Mijnraad – which consists, for example, of professors from several universities – has now issued a warning for the second time in a few months is astonishing, because the Cabinet is uttering soothing words about the security of supply. Experts note that there is not enough certainty, as have employer clubs VNO-NCW and MKB-Nederland, which recently expressed their concerns.

The Mining Council argues in favor of filling storage facilities much more quickly to prevent shortages in the winter, precisely because Russia has partially turned off the gas tap for Europe. Gas supply security is under great and uncertain pressure in a number of future scenarios. So the thinking and willingness for government intervention is justified,” warns Stav Dibla, Chairman of the Mining Council. He sees “every reason to strive for a one hundred percent fill level.” This should serve as a “strategic stock” of about twenty percent more.” Against the costs of disruption. potentially social – particularly in the most extreme scenarios – Mijnraad believes these costs are worth it.”

Compensation for the residents of Groningen

According to them, recent government plans with emergency measures are insufficient to prevent winter in the cold. For example, the Netherlands is committed to providing additional supplies of liquefied gas (LNG). It is not certain whether attracting LNG imports can replace all Russian gas. In it, experts call on Groningen to prepare for the reopening. “In Mijnraad’s eyes, using the Groningen field to fill storage and as an emergency measure is a realistic option to consider and prepare for.”

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According to experts, it should also become clear how much production is required in different scenarios to fill gas storage to the maximum. “And the amount of gas that can be extracted from the Groningen field is within established safety standards.” There should also be good compensation for the Groningers.

Normally, only the Minister of Economic Affairs and Climate Policy is empowered to make decisions in this regard. Since this Cabinet term, the Secretary of State has also been responsible for dealing with the earthquake problem. Mijnraad concludes that there is a danger in this. “In the gas crisis that has now arisen, this means that the security of supply, the use of gas storage and the Groningen field, and the consequences for the economy have not been collected together in one portfolio, with the risk that the relationship between these topics is in a balanced way.”

strong words

Climate Minister Rob Getten and Foreign Minister Hans Velbreev say they are “considering the advice. We will include it in our follow-up actions to ensure the security of supply.” Last week, Villebrew said in stark terms that he did not want Groningen to open any further, unless hospitals or schools were left out in the cold. “Producing additional gas in Groningen is not safe,” Filbrev stated.

However, Mijnraad’s latest advice also identifies scenarios that affect not only Groningen but also anticipate any mandatory closure of large consumers (eg industry) and small and medium businesses. According to Mijnraad, this also causes significant economic damage and even “social disruption”. They are asking Cabinet to “also prepare ourselves for the most extreme and difficult to imagine scenarios”, as is also the case, for example, with flood risk management. The advice said that the Netherlands should now “in a short period of time consider possible strategies and measures to prepare for a possible gas crisis due to further losses of Russian gas”.

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