In the northern part of the Netherlands, close to the city of Groningen, Europe’s largest gas field is located, where the Dutch have been extracting natural gas since 1963. Production in the field is currently around 12 billion cubic meters per year, and the number has historically been even higher. For different reasons however, the country has had to limit production.
Production from the field has attracted negative headlines, partly because of the earthquakes in the surrounding areas, which the underground activity has caused. Most recently, in May this year, an earthquake of 3.4 at the Richter scale was measured, and it caused damage on houses in the nearby villages. Meanwhile, the rising debate of climate change and green switch has added to the pressure on the Dutch government, to shut down production from the field.
Last year, it was decided, that production from the field should end in 2030, but now there is a new position from the Dutch government. The field will now be closed down as soon as mid-2022, and until then, production will be lower than the current level of 12 billion cubic meters per year. The Dutch will however not rule out the possibility, that the field can be used post-2022, in extreme events such as a very cold winter.
When news of the early shutdown of the field broke Tuesday, the European gas prices rose sharply. Since the news came out at the same time as the report of nuclear power issues in France, it is however difficult to say which news contributed the most to the rising prices. It is however a fact, that the distant contracts on the European gas markets have increased by 5-7 % during the last week.