natural gas:

source of wealth

Largest gas reserves

It is July 22nd, 1959. On the land of farmer Boon from Kolham in North Groningen, natural gas is found in an exploratory drilling at 2,600m depth. Later it is discovered that this is part of the biggest gas field in Europe – the Groningen field. The discovery of natural gas in our land created a revolution in Dutch energy management. The belief in nuclear energy as the energy source of the future shifted in public opinion during the ‘60s.

Energy crisis

The energy crisis of 1973 also ensured the realization that the Netherlands was very dependent on foreign oil. The importance of energy coming from our own country became larger. At the same time, the end of coal production from mines in Limburg came into sight. There was also a growing awareness that coal was pollutant. Natural gas is the new clean fuel for our industry and for our electricity production; the majority of our electricity is now generated in gas-fired power plants. Who, if they also use residual heat, can achieve an efficiency rate of 70%.

"The Groningen-field is one of the largest natural gas reserves in the world."

Facts & Figures

"98% of Dutch households are connected to natural gas."

Facts & Figures

Natural gas:

certain about energy

Gas hub

The Netherlands is the largest natural gas producer in the European Union. We also play a leading role in the purchasing and sale of natural gas; the Netherlands acts as a gas hub. A strategic position for the country thanks to our infrastructure for production, transport, storage and transit of natural gas. In 2015 we produced 51 billion m3 and imported 36 billion m3 from Norway, Russia etc. The Russian import has doubled in the last five years. 38 billion m3 is for personal use and 41 billion m3 for export purposes. For example, to Germany, France and Italy. The role of the Netherlands as a European hub is not only good for our economy, but it concerns our energy security.

(billion m3)

in

total 87 billion m3

  • Production the Netherlands
  • Import
  • storage

(billion m3)

out

total 87 billion m3

  • Use the Netherlands
  • Export
  • storage

Gas storage

Underground gas storage is part of this gas hub. By storing gas in depleted gas fields during the summer, we have an additional buffer for cold winters that can easily be put when peaks occur in the demand for natural gas. In the winter, the demand for gas is namely three times as much as in the summer. We have such storages in depleted gas fields in Grijspkerk, Norg and in Bergermeer. The storage in Bergermeer (Alkmaar) is the largest in Europe. Large compressors pump the gas under a pressure of 300 bar into the gas field so that in the winter, like from an ordinary field, it can be pumped out again. Except in empty gas fields, we also store gas in depleted salt caverns such as in the Groningen Zuidwending. Liquefied natural gas (LNG) comes with ships from North Africa and the Middle East and is stored in tanks on the Maasvlakte.

Through our own natural gas production, transit and storage, we are always confident with our natural gas necessary for our energy.

Aardgas: zeker van energie

Natural gas:

Costs and profits

natural gas benefits

A large part of our prosperity we can credit to the production of natural gas. Over the last years, the profits from natural gas have come to around 12 – 14 billion euros per year. That is about 900 euros a year for every Dutch citizen. The profits are so large because the oil and gas industry returns via taxes 50% of its profits to the national government. Through the EBN, the government participates with a 40% share in the exploration and production of oil and natural gas. Through the reduction of natural gas production from the large Groningen-field, the profits from this are expected to fall in the following years to about 4 billion euros.

Employment opportunities

The oil and gas industry is important to our employment; the sector in the Netherlands alone provides around 16,500 jobs. This involves people working on production sites, researchers and engineers. It also involves jobs with the supply companies and for example, the building of infrastructure and offshore platforms.

research

Additionally, the sector is an inspiring catalyst for our (technical) universities and research institutes. It involves a high tech world that is constantly looking for innovations to make the production of oil and gas more efficient and sustainable.

knowledge export

Our knowledge also plays a significant economic factor. The Netherlands has internationally renowned institutes such as Clingendael (CIEP), TNO, Energy Academy, Delta Institute and TU Delft. Our know-how of safe and sustainable production, storage, trading and transport of natural gas is an important Dutch export product.

"Since the 60s, the natural gas profits have provided the Netherlands with more than 265 billion euros."

Facts & Figures

Gas producers

Our natural gas is extracted onshore and offshore by about 15 producers from around 250 different gas fields. To save our large store of natural gas in Slochteren, the government determined that gas from our so-called “small-fields” should be extracted first.

Gasunie: transport

The natural gas produced offshore goes to a gas reception installation in Den Helder after being treated. Such an installation can be found in Uithuizen in Groningen as well. Here, the gas is made suitable for transport to users. The Dutch Gasunie takes care of doing this. Gas from Norway, Denmark and Germany also come via large pipelines to the Dutch mainland.

Regional networks

Through a regional pipeline network, the gas is delivered to the users: households or industry.

GasTerra: Purchasing and sales

GasTerra is the trade organization involved in the purchasing and sales of our natural gas. They also decide how much natural gas needs to be supplied daily based on the expected demand. This of course varies by season because in winter the demand is three times larger than in the summer. With these so-called gas roundabouts, the Netherlands plays a leading role in the distribution of natural gas in Europe.

"At the bottom of the North Sea there is 3,000 km of pipelines for the transportation of natural gas to the shore."

Facts & Figures

"Our main transport network for natural gas is 15,000 km."

Facts & Figures

"The regional network is around 125,000 km long."

Facts & Figures

natural gas:

Exploration & production

Exploration

Our natural gas has formed over hundreds of millions of years from the remains of plants and animals. It is found at 1.5 to 5km depth in tiny millimeter sized pores made of hard layers of sandstone. Geologists trace these gas stores by analyzing the structure of the subsurface. By looking at how soundwaves react in certain ground layers a geologist, just like on a 3D x-ray, can read whether gas can be found in that layer.

Drilling for natural gas

If seismic research indicates a ground layer where gas could potentially be found, a drilling would provide certainty. A complicated decision because a drilling costs tens of millions of euros. This is an investment which must outweigh the expected results i.e. the amount of natural gas that can be found there.

Licenses

Many legal permits are needed in order to drill and possibly later to extract natural gas. Before this, all possible implications are mapped in order to minimize the impact on local residents, the landscape and the environment. The State Supervision of Mines (SodM) plays an important role in this.

Impact

Agreements are made with the relevant municipalities concerning the local impact because a drilling can take up to 45 – 75 days. Therefore, a transportation plan is drawn up to reduce the burden on the local residents. The companies, who carry out the drilling, work according to a careful environmental code and code of conduct.

Drilling

After the licensing procedure, the drilling can start. The temporary drilling installation – a rig – is built on an impervious floor. All the process water is drained and purified. With a special drilling head, a hole is drilled into the ground. On every drilling pipe a following one is screwed on. Concrete strengths the borehole and prevents leakages into the subsoil. If the gas-bearing rock layer is reached, the tubes in that layers are perforated. Due to the high pressure at this depth, the gas flows upwards on its own.

Is there gas there?

If it turns out that the gas field is suitable to start production, the drilling rig is dismantled. The field is then prepared and fitted for production. After this, the gas supply from the well is safely controlled by a special valve.

natural gas: drilling

"For a borehole of 5km depth, 547 drilling pipes are necessary."

Facts & Figures

"A drilling can take up to 45 – 75 days."

Facts & Figures

sparing nature

Drilling can also be done at an angle with a steerable horizontal drilling. This can be done for example, to avoid and protect a special nature reserve. This is how natural gas is extracted from under the Waddenzee from the Lauwersoog on land.

Offshore

In an offshore drilling, the drilling rig stands on a floating platform which is brought to the site by tugboats. There, the legs are securely put onto the seabed. If the drilling is successful, the drilling rig leaves again and makes rooms for a production platform.

natural gas: living on a platform

"A drilling in total costs around 15 – 34 million Euros, depending on the type of drilling rig."

Facts & Figures

"A drilling costs between 300,000 – 500,000 Euros a day."

Facts & Figures

natural gas:

Earthquakes?

Earthquakes?

When the licenses were issues for the production of gas in the large Groningen field by Slochteren, the risk of earthquakes was considered to be very small. In reality, this was different. On the 16th of August, 2012 the KNMI registered an earthquake in Loppersum with a magnitude of 3,6 on the Richter scale. Longer and stronger than expected. There have been more tremors since.

producing 50% less

The Cabinet decided to configure a research looking into the effects of the earthquakes and the claims processing, but also into the effects of lower gas production from this field. While in 2013 there was 54 billion cubic meters of natural gas, in 2015/2016 the yield is halved to 27 billion cubic meters. In addition, it has been made easier for residents to recover damages. For the time being research indicates that the earthquakes are related to particular characteristics of the Groningen gas field.

Restoring public support

It is clear that the reputation of the gas sector and the NAM in particular has been damaged. The industry is therefore putting a lot of effort into restoring confidence and acting like a “good neighbor” in the regions where gas is being extracted. It is not only about having energy that is safe, reliable and affordable, but also – accepted. Support for gas production is a prerequisite for the transition to a fully sustainable energy supply.

Subsidence

Gas production can cause subsidence. If after a drilling the gas from the small pores in the sandstone layer has flowed to the surface, the empty pores can “collapse”, causing the soil to sink in. This usually involves a few millimeters per year, with no damage to homes and buildings. In time, subsidence may have implications for water management in an area, so for example, weirs or grounds should be adjusted. These costs will of course be reimbursed.

natural gas:

Fracking

Fracking

Fracking is used to extract gas from dense stone layers where the gas pores are not connected. The natural gas is then ‘locked’. In order to extract/produce gas, water is brought into the gas layer under high pressure so that small cracks are created in between the pores. Hereby, the gas can flow to the surface.

Fracking liquid

This fracking liquid consists of 95% water, 4% sand to keep the cracks open, and 1% chemicals to prevent silting by bacteria and that clay-layer swelling and blocking the pores. Our groundwater (100 – 300 meters deep) cannot come into contact with the fracking liquid, because the pipe to the gas layer (1500 – 3000 meters deep) is reinforced three times by steel and concrete. In addition, a hard layer of clay above the gas layers prevents the fracking water from flowing upwards. Fracking has been taking place all over the world for about 50 years. In the Netherlands it is mainly used to reach the smaller gas fields where it is harder to extract natural gas from. With this so-called “small fields policy” provides the government with the priority to gain gas from small fields in order to save the great stock in Groningen.

Fracking

Nitrogen-injections

If a gas field is ‘empty’, there is still around 15% of gas in there which no longer naturally flows upwards. That is why nitrogen is sometimes introduced so that the gas ‘pushes’ upwards. Nitrogen is found everywhere in the air and is harmless to humans and nature. With these techniques it is possible, for example, to provide six more years of natural gas to all households in Drenthe from the ‘empty’ Drenthe gas field.

How much gas do we need?

We can still produce an estimated 50 years of natural gas in the Netherlands. More than enough for the transition period till 2050, when we will have a fully sustainable and low CO2 energy supply. Next to the large Groningen field, 420 smaller fields have been discovered. Of those, 230 have been taken into production. Four are used for the storage of natural gas. 125 fields have not yet been developed. Of these, 53 will probably be brought into production within five years. With 72 fields it is still uncertain what will be done with them. EBN and TNO strongly favor the active exploration of new fields to ensure the Dutch gas supply remaining independent for a long time and to keep the offshore infrastructure intact. For the production of potential shale gas reserved in the Netherlands, there are no initiatives.

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