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Dutch government acknowledges peak gas
Posted by Rembrandt on June 19, 2008 - 9:55am in The Oil Drum: Europe
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.
[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.
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....
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Rembrandt, thanks for a great post. The Dutch of course are enlightened in so much they do. Investing gas taxes in renewable energy.
And in a deal struck in the Starbucks outside the Dutch Parliament:
Maybe they're so enlightened because of what they can get in a "coffeeshop":-)
In the Netherlands the term coffeeshop has come to mean a place where hashish and marijuana are available.
This should not be taken as condoning the use of addictive drugs. Drinks containing caffeine should be used with care and moderation. Alternatively, stay on the grass!
I have a great deal of admiration for the social policy approaches of the Dutch
in general. At least an attempt to create a platform for discussion is usually
visible.
However it appears that on the subject of Peak Oil .. the people synonymous with
the windmill have momentarily drawn a blank.
I wonder how this admission of scarcity will effect other European country's energy policies along with the price and regulation of the resource, not to mention the EU's stance toward Iran?
You don't know the Netherlands' government at all. No way in hell that they will actually do something about it. They cower to every minority intrest that there is. They've actully nearly canceled a wind farm because of "horizon pollution".
Their plan of action is in the article btw :
"closer relations with natural gas producers"
In other words ... not doing anything about their dependance at all (save a few token projects offshore no doubt).
The netherlands is utterly dependant on power from Belgium (90% orso nuclear) and Germany (also mostly nuclear). They don't have any real home grown generating capacity.
So they'll do what they've always done. Suck up to a bigger fish than they and hope nothing goes wrong. And when it does ... sjah.
But remember that as bad as the Netherlands are, the UK is in
line behind them for energy supplies.
Britain to loose 40% of electricity generation capacity in 6 years ...
On top of that, however, we shall also have to shut down nine more major power stations – six coal-fired, three oil-fired – forced to close” ...
www.carbonrationing.org.uk/fora/threads/britain-to-loose-40-of-electrici...
@TomC
Your response is not based on fact. The Netherlands has 7 coal power plants, 30 gas power plants, 1 nuclear power plant, dozens of onshore windparks and 2 offshore windparks.so THEY HAVE LOTS OF HOME GROWN GENERATING CAPACITY! Only 10%-15% of electricity is imported. The Netherlands is only slighlty dependent on power from Western Europe (mainly france/germany).
Please get your facts straight.
The June 22 meeting in Jeddah, Saudi Arabia to be attended by energy ministers could be a turning point. Maybe those who grovel enough will get a seat in the lifeboat while others have to swim.
Despite this admission I very much doubt that policy makers on local, provincial, or national levels have any idea what peak oil & gas really means. Let alone act decisively and urgently on it.
Sure, there is a lot of talk about clean coal, off-shore wind, and even nuclear and hydrogen, but they fail to inform the general population. The public in turn largely blames oil majors and the government for high energy prices(partly justified because of the high taxes) and believes all we need to do is cut taxes and boycot Shell filling stations. And they demand bigger and more roads so they can drive their future waterpowered cars eternally. Sadly, the government gives in and is expanding car infrastructure like mad.
PaulusP, I don’t know how much you know about Holland, but as a Dutchman I have to say that your comment does not do much justice to the Dutch.
Yes, I agree that many politicians here do not see all the consequences of peak oil. Yes, by using words like “renewable, sustainable, oil-dependency, ecological, environmental” the politicians try to put on their greenest faces, but when push comes to shove, it’s the money that counts. ..And we are cheap, even almost as cheap as the rest of the world.
However, with our “poldermodel” (endless discussion aiming for consensus with every party involved) you can only say we are behind in renewable energy not that we do not talk about it enough or are not aware of it.
Ofcourse we want more roads, everyone who encounters trafficjams demands that. However, of all the transport related taxes (excise taxes on fuel, excise taxes on new cars, taxes for using the road) only 11% gets re-invested in infrastructure. And the taxes we pay is high, very high, as you said yourself. In return, we get trafficjams, with the highest car/km2 ratio, I wouldn’t be surprised if we have the most/longest trafficjams per km motorway. Yes, we are mad, but I think that’s understandable.
And, no, we don’t blame the big oil. Recently there have been some actions regarding the fuelprices. Shell, Bovag and others were quick to inform the public on a nationwide platform that the fuelprices consist mostly of taxes. I don’t think there are many fuelconsumers left unaware of that. On the other hand we know that the oil has to come from somewhere and that it’s finite, we are down-to-earth-people.
I don’t know where you come from PaulusP, hopefully your government has a better plan.
So unlike other countries who can say "If it starts to run out we'll just drill some more..." (and as a result huge amounts will then flow in from these mythical new fields), the Dutch are saying "we know what's there and this is the decline profile of it..."
What else can they say that is anything other than mass deception/delusion?
Nick.
First of all, I must ask you: Isn't this governmental admission a refreshing, honest and sincere gesture considering we're in a time of much uncertainty/secrecy about oil/nat.gas reserves/production of other countries?
To be stubborn I'm going to answer your rethorical intended question.
I've gone through the report a little bit and it says nothing about the Waddenzee. This is the sea between the Waddeneilanden and the Afsluitdijk. It is also an environmental vulnerable area. So drilling, even for exploration, was forbidden. Recently there has been given a green light..
I agree, it is honest and is to be thanked. My point was that many other governments (and people) simply believe that there are vast lakes of oil just waiting to be tapped / drilled -e.g. ANWAR. Maybe when thing get desperate we will discover the truth -which may be that KSA has done some exploring and there isn't any more oil in their deserts or that all the really juicy deposits have been discovered.
'At the end of the day' its likely that by the time we get to the 'drill everywhere and anywhere' stage even some really big deposits are not going to make more than a half decade or so difference to peak year.
Nick.
'The drill anywhere and everywhere'-stage. That's a funny expression lol. Yes, I don't think many ppl here need to be convinced that it's too late by then. Even if that stage was to start tomorrow.
Thanks for an interesting and inforamtive post.
According to BP Statstical Review 2008 Netherlands produced above 81 Bcm/a in 1976 and 1977, and 64 Bcm/a in 2007 behind UK of 72 Bcm/a and Norways approximately 90 Bcm/a.
Would you Rembrandt (or anyone else) care to elaborate a little on these numbers? Are we to belive BP SR 2008?
Netherlands presently uses 37 Bcm/a of natural gas, which suggests a "gentle decline" towards 2025.
It is interesting to note that Netherlands to a larger extent will integrate their foreign and energy policies.
Energy could also become a test of the team spirit within the European Union as other countries search to secure their supplies without a concerted effort from central EU.
@nrgyman2000
Figures in the BP Statistical review are different because the Dutch themselves use a Slochteren (groningen) field equivalent heating value per cubic feet meter of gas. You cannot therefore not compare BP statistics directly with Dutch figures.
Dutch production initially rose to the heights of 81 Bcm/a when production just started in the 70's. Because of market reasons the gas was kept at a production rate near 70 Bcm/a (production could have been
higher). Since that time production has been relatively stable at 70 Bcm/a, with about half going to domestic consumption and the other half going to exports. These export contracts have been signed and exports will continue, therefore your notion of a gentle decline is incorrect. The decline really depends on the large Slochteren field about which not that much information is available in the public domain.
This forecast by the Dutch government is the first official public long term forecast ever by a government in the history of Dutch natural gas.
For net nat gas exports I agree. The export contracts will run untill they expires.
To summarize what you say is that Dutch nat gas importers are pretty much left to guessing on the devlopment on Dutch nat gas exports (except of course those who have contracts and know the shape of their Dutch supply).
If you want an overview of the historical trends for Dutch Nat Gas production or for the North Sea as a whole you can visit the Energy Export Databrowser that was written up in TOD last week. Since then it's been updated with the 2008 BP Statistical Review and includes the ability to look a groups of countries.
It's clear from the first plot below that Nat Gas production for the entire region peaked a few years ago. The second plot provides a visualization of what Rembrandt describes in words above.
In general I think it's better to look at real, historical numbers for production and consumption as opposed to guesstimates of reserves and future production.
First of all thanks for adding good illustrations to this thread.
You wrote;
Your comment illustrates one of the true challenges about trying to understand future supplies, be it NG or oil. Both NG and oil needs good and sound expectations of future supplies as development of energy infrastructure is long term (10 - 15 years). These expectations will be derived form understanding historical performance of individual fields, estimates of remaining recoverable reserves for these and an effort to extrapolate them into the future.
We can of course develop various supply scenarios based on data from authoratitive sources, but still these will only be educated guesses, in other words if we are not fully flying blind, at least we are partly flying blind into the future of energy supplies.
Rembrandt,
Does the Dutch government present any forecast on future Dutch natural gas demand/consumption?
No, it is very difficult to predict because there are a lot of technologies being implemented that can significant lower gas consumption. Two of the most important ones are 1) energy neutral greenhouses with heat/cold exchange (greenhouses consume 10% of dutch gas consumption) and 2) special home heating units which combine gas consumption with electricity production due to an in-build stirling engine (will be launched commercially at the end of this year). This new home heating unit leads to a 20%-30% efficiency increase versus the most efficient home gas heating system available on the market today.
I find it hard to believe that the government has not developed any forecasts on future Dutch nat gas (and other energy) consumption . They would need such a tool to (among a lot of other things) assist developing supply strategies.
Certainly higher energy prices will act as a motivation to increase the efficiencies of energy use.
What could happen and which might become a paradox is that the recent run up in energy and food prices (throw in possible interest increases (for those with mortgages), tightening of credit) could render the investment in these improved processes unaffordable for many households and industries.
@nrgyman2000
Hard to believe it may be, but there is no such forecast
Rembrandt, you write:
In fact the report virtually plagiarises the ‘philosophy’ of the WEO 2007.
(page 29)
This is followed by the reproduction of a figure taken from the IEA’s ‘World Energy Outlook 2007’ showing trends in global energy demand by fuel from 1980 to 2030: more coal, more oil, more gas, more biomass, more everything.
So, peak oil awareness: Netherland -- nul points
Indeed as far as renewables are concerned the report is internally inconsistent. We have the gospel according to the IEA (notably: maximum growth in demand for conventional energy plus minimal growth in demand for wind and solar energy) combined with the contradictory gospel according to the ‘Renewables’ school: we’ll just fire ahead and invest profits from gas in renewable energy to make up for gas depletion.
So which is it? Do renewables matter or don’t they? From this report it seems as though renewables matter only in the sense that the authors feel obliged to placate the eco-lobby with a bit of lip service. Déjà vu all over again.
Look at the slick hype about the ‘North Sea as an Energy Source’ –stuff about 6000 MW wind energy just out there waiting to be picked up, possibly a lot more. Fine. But where renewables are concerned the devil is in the details: how much is it going to cost? And vague statements such as “the Netherlands has a substantial potential for sustainable biomass from forests, nature [!!!], landscape, urban greenery and the timber industry” (page 42) don’t provide much enlightenment either. They must be joking. Note too the weasel-word ‘substantial’ -- or possibly substantial as in '0.001%'.
As you write:
So am I.
@Carolus Obscurus
Renewables do not have a central focus in the Dutch energy policy. They are seen as important and claimed to be important but in reality not that much is done. The 6000 megawatt offshore wind will be difficult to achieve since in the current planning we will have only 750 megawatts or so by 2011. So we need to build 5250 megawatts between 2011 and 2020 to attain the 6000 megawatt target. Which in combination with the 4000 megawatts of planned onshore wind by 2020 is about 15% of current dutch electricity consumption.
We don't have a sound PV solar stimulation policy, your remarks about biomass are a bit too sarcastic ;-), there is quite some potential (few percent or so of energy supply). Most needs to be important.
As to peak oil policy, there is none.
[quote]As to peak oil policy, there is none.[/quote]
@Rembrandt:
Funny, you'd expect with a secretary of treasury and vice president formerly an executive with Shell there should be a little more of a policy..
Yes, I'm Dutch - pleased to see this admission of finity.
I am seriously worried that the dutch will simply assume that sufficient imports of gas will be available in 2025,
with improved efficiency we might not need as much as we use now, but the new situation will still be a fundamental change to the entire dutch ecnomy.
Much of the Dutch heating system totally relies on gas,
and with so little time to prepare and refit millions of homes (and the entire greenhouse production system which probably generates about 10% of dutch GNP through exports)
there is a real danger that when we run out, we will not be able to replace such high-quality energy.
Even the concept of the dutch energy island, which generates power from sea-level differentials,
assumes gas security by integrating LNG terminals for gas delivery, but how can anyone be sure
such deliveries will take place?