Natural gas revenues almost 417 billion euros

Total state revenues from natural gas extraction since 1965 have reached a total of 416.8 billion euros (expressed at 2018 prices). To compare, state revenues over the year 2018 totalled 337 billion euros. Revenues from natural gas have mainly oscillated due to natural gas price fluctuations.

Mining and quarrying contributing nearly 1,000 bn euros in value added

On top of major state revenues from natural gas extraction, the Dutch economy was able to profit from the mining and quarrying sector as such. Mineral extraction primarily consists of natural gas extraction. Since 1969, this industry has generated a value added in the economy of close to one thousand billion euros (expressed at 2018 prices).

Electricity production a major consumer of natural gas

Electricity companies primarily use natural gas as an energy source. The consumption of natural gas towards electricity production rose substantially between 1966 and 1975. Other industries taking full advantage of gas have been manufacturing, particularly fertiliser producers. Gas consumption among households increased at a later stage. The decision by Dutch government to connect as many households as possible to the country’s gas grid led to connections for virtually all households as of the late 1970s. Households mainly use gas for heating (80 percent). The rest of the supply is for hot water provision and cooking.
Between 1975 and 1995, the largest natural gas consumers were the energy sector and households. Increased electricity production led to a further rise in gas consumption by the energy sector until 2010; gas consumption declined gradually among households despite a rise in the number of households. This decline was mainly due to improved home insulation and more energy-efficient gas boilers.

Groningen gas: an estimated four-fifths extracted

The total extractable quantity of natural gas from the Groningen field is currently estimated at 2,740 billion cubic metres (bcm). One-fifth of this quantity is still underground. Initially, the government planned to deploy the entire reserve as quickly as possible in the face of an anticipated rise in nuclear energy production. Up to 1974, almost all gas extraction took place in the Groningen field as a result. In order to build in a buffer which might address the occasional peaks in demand, the government shifted part of the gas production to smaller fields outside Groningen and in the North Sea. However, gas extraction from smaller fields turned out to be much more expensive and elicited only a marginal response from companies. Hence, in 1974 the government introduced a ‘small fields policy’, under which the Dutch gas company Gasunie (now Gasterra) was required to purchase gas from the smaller fields first, leading to reductions in the Groningen gas extraction. In nearly each consecutive year over the period 1988-2007, more gas was extracted from the smaller fields than in Groningen.

Scaling back gas extraction in Groningen

The occurrence of earthquakes in Groningen led to a commitment by central government to reduce gas extraction as of 2015. A particularly severe quake at the beginning of 2018 even led to the decision to completely turn off the gas tap in Groningen by the year 2030. This substantial measure to scale back gas extraction has left a clear mark on total gas extraction in the Netherlands: in 2018, approximately 36.5 bcm was extracted, a reduction by almost half relative to 2014.

Netherlands has become net importer of natural gas

Scaling down of the gas extraction in Groningen has led to a sharp rise in gas imports over the past few years. In 2018, gas imports exceeded exports for the first time. The bulk of natural gas supplies now comes from Norway. In the period 1996–2018, the Netherlands had a natural gas-related trade surplus amounting to approximately 110 billion euros.