10 April 2020
On 30 March, Minister of Economic Affairs and Climate Policy Eric Wiebes sent three letters to the House of Representatives about gas. One about hydrogen, one about green gas and an overarching letter on “the role of gas in the energy system of today and tomorrow”. In this third letter, he explained the role that gaseous energy sources currently play and will continue to play in the Dutch energy system in the future.
In his letter, the Minister gave a balanced and integrated presentation of the role of gas in the energy transition and the position of Dutch natural gas within this. NOGEPA is pleased that the government has set out a clear direction for the energy transition. It gives our industry sufficient guidance for the years ahead. The mantra that previously seemed so appealing to politicians and the public – time to go gasless – morphed in the letter into the gradual greenification of the gas system towards 2050. NOGEPA fully supports this approach as it corresponds to the “Ladder of 7” which we have been advocating for many years.
The government sees two main lines of action here:
- Firstly, reducing gas consumption through insulation and other saving measures. Because it is the consumption of fossil fuels that causes CO2 emissions
- Secondly, the gradual replacement of natural gas by other carbon-free gases and the use of CCS
Furthermore, the letter discusses the value of the existing gas infrastructure for the new system and the knowledge available among the members of NOGEPA and elsewhere in the industry.
The Minister states resolutely that the Netherlands will need natural gas for a long time to come. And as long as this remains the case and as long as we have the reserves, the government prefers domestic small-field gas production. These fields have become even more important in the eyes of the government since the closure of the Groningen field. Domestic gas production is better for the climate, generates money rather than costing money, and is good for employment and preservation of knowledge about the subsoil (important for geothermal energy and/or storage of CCS or sustainable gases).
Finally, in his letter, the Minister addresses the issue of strengthening the investment climate for oil and gas production. Investment in new oil and gas production is currently very limited, in contrast to the situation in the United Kingdom and Norway, for example. The consequences of this are clearly described in the report of The Hague Centre for Strategic Studies published in February. In May 2018, the Minister announced an increase in the investment relief for new activities in order to strengthen the investment climate and to help get investments back on track. The signs are that this will be implemented soon. And this is what is needed. Given the current gas prices, it is a matter of urgency. Increasing the investment relief is an essential condition to keep Dutch gas production going and to prevent a situation where investments largely take place in our neighbouring countries. Other ways of improving the investment climate include speeding up licensing procedures and avoiding additional costs, for example, due to overly stringent national environmental measures or a unilateral national CO2 levy.
Gas will continue to be an important part of our energy mix in the coming decades. Not just natural gas, but increasingly also sustainable gases. NOGEPA members have a lot to offer in this transition process. They produce Dutch natural gas in a safe and responsible manner and invest in new projects and production, therefore preventing the Netherlands from having to import gas unnecessarily. This is good for the climate, for the Dutch treasury and for employment.
