Netherlands to cap gas production

The area around the largest gas field in Europe by Groningen in the Netherlands has once again been hit by an earthquake. This causes the Dutch government to consider lower production once again.

Europe’s largest gas field is located in the Netherlands, in the area around the city of Groningen in the northern part of the country. The big gas resources in the country mean that the Netherlands has become a very important country on the European gas market, and a big part of the country’s electricity production also comes from gas-fired power plants.

The gas resources in the country are however not only a positive thing. Over the years, the area around the Groningen field has several times been hit by earthquakes, which are man-made and caused by the heavy underground activity in the gas field. Monday, Groningen was hit by the most powerful earthquake in more than five years, a quake which measured 3.4 on the Richter scale, a scale which is usually used to measure natural earthquakes. The quakes are a problem for people living in the area, and cause damage on both houses and streets. In relation to the quake Monday, more than 300 damages have been reported to authorities.

The problems for the inhabitants in the area have now led to considerations from the Dutch government, to cut production from the Groningen field further. During the previous years, output has already been limited in an attempt to limit the earthquake risk. The Dutch climate and energy minister has announced, that he in March at the latest will publish a plan to limit production from the field. Meanwhile, the minister says that he will look into the specific reasons behind the earthquake, but does not hesitate to say that the tool to avoid such incidents is reducing production.

Last year, the Dutch government reduced output from the field from 27 to 21.6 billion cubic meters per year, equaling 20 %. The current plan from the government is, that the output should be reduced by a further 1,5 billion cubic meters by 2021, but this ambition could potentially be revised soon.

The Dutch gas production is among the most important in Europe, and a potential noticeable cut in the output from the Groningen field will also affect gas prices on the rest of the continent.