Earthquakes force Dutch government to cut gas field production


Let in a little winter air?

The Dutch government has ordered a further tightening of gas production at Groningen, Europe’s largest gas field, in response to a spate of earthquakes that have caused extensive property damage in the Netherlands’ northernmost province.

Output at the field, the world’s 10th largest, will be capped at 30 billion cubic metres (bcm) for the whole of 2015, Economy Minister Henk Kamp told reporters on Tuesday. At the beginning of the year, production of 39.4 bcm was planned.

“The earthquakes are still there, and we will have to reckon with earthquakes in the future,” Kamp later told Reuters. “We can do two things to preserve safety: reduce the production of natural gas and strengthen houses, and we’re doing both.”…

Which tells us something about the size of profits – and how priorities are sorted. Even though Kamp says, “We’ll do whatever is necessary for the safety of the people in Groningen.”

In February, output was cut to 16.5 bcm for the first half of the year after the Dutch Safety Board said gas companies and state regulators had failed to take the threat of earthquakes seriously enough.

In the second half of the year, output will be capped at 13.5 bcm, with stored gas tapped if necessary to make up for any shortfall…

Analyst Oliver Sanderson of Thomson Reuters Point Carbon said reaction to the planned reduction had been relatively muted because it was announced in June, during the summer…

“Last time there was a cold winter, two years ago, Groningen was producing at around 54 bcm,” he said…”Where is Europe going to get 25 bcm?”

He said that with Groningen producing at 30 bcm in a cold winter, the shortfall in Western Europe would have to be met mostly with Russian gas, supplemented with some Norwegian gas and liquefied natural gas imported by tanker.

Try selling that in Brussels,” he said, referring to the political sensitivity of European governments increasing, rather than lessening, their reliance on Russian energy.

Sometimes, circumstances make it a little easier to understand some nations keeping commercial and trade policies separate from the latest political conflicts.

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