The Netherlands has been a large producer and consumer of natural gas since the development of the Groningen Gas field in the 1960s, the largest natural gas field in Western Europe. A key driver behind shale gas development therefore did not apply to the Netherlands and to date there has not been any extraction of shale gas in the Netherlands. However, shale gas might have greater relevance in the future as current forecasts show that gas revenues are expected to decline significantly as the gas fields dwindle over the coming decades, and because the Dutch Minister of Economic Affairs has cut the output from the Groningen Gas Field as a result of a number of earthquakes.
Currently, both the U.S. Energy Information Agency (EIA) and The Netherlands Organisation for Applied Scientific Research (TNO) have reported resource estimates for shale gas in the Netherlands. The TNO estimates that the Netherlands currently holds 200 – 500 bcm of shale gas resources. There are however, questions over the economic viability of shale gas production in the Netherlands as Dutch shale is believed to lie much deeper than that in the U.S.A., approximately three to four kilometres below the surface. In addition, shale gas production is not always possible in the Netherlands due to its high population density and the presence of protected natural areas. In March 2014, Triple E Consulting published a report in which it estimated that the total investments per well in the Netherlands would amount on average to 14 -15 million Euros.
Exploration and production of shale gas has faced public resistance in the Netherlands. Although Dutch political sentiment has historically been largely pro-shale gas, initial resistance arose in 2011 when the Dutch District Court of Den Bosch ruled that the local authority of Boxtel, which had granted a company permission to conduct test drilling, had done so unlawfully. This appears to have raised the public profile of perceived risks in the extraction of shale gas. Many fear that drinking water will be contaminated due to fracking, earthquakes will be triggered, and methane will be released. This perception does not apply solely to civilians or environmental groups but also to affected enterprises such as brewing groups and water companies. The Netherlands has very high standard of drinking water and the continuing supply of fresh, clean water is of primary importance to such companies.
Examining the environmental impacts
In August 2013, the Dutch Ministry of Economic Affairs published a report, about the risks and effects of shale gas extraction. The conclusions were largely positive recognising that there was little danger of water contamination as long as a strong regulatory framework was in place to ensure the careful storage of chemical waste and to prevent methane escaping into the water system. Following the publication of the report, the Minister of Economic Affairs requested the advice of the Netherlands Commission for Environmental Assessment (NCEA). This advice was published on 19 September 2013 and recommended a mandatory environmental impact assessment for each shale gas project. Moreover, the NCEA advises, among other recommendations, that fracking should be avoided in certain areas, such as those where tectonic faults are present.
With the report and NCEA's advice in mind, the Minister of Economic Affairs decided to carry out a strategic environmental assessment (Structural Vision), to develop a long term spatial planning strategy. This Structural Vision does not solely cover shale gas, but extends to an examination of subsoil in its entirety to allow a comprehensive assessment. An environmental impact assessment will be prepared by Arcadis and will form the basis of the Structural Vision. On 28 May 2014, a Draft Memorandum on the scope and detail of environmental research into shale gas was published. This Draft Memorandum set out the focus of investigation and which areas will be covered by the environmental impact assessment. The environmental impact assessment and a draft Structural Vision are expected to be published in early 2015. In the meantime, the Minister of Economic Affairs will consider ways to reduce identified specific risks, for example by adjusting the Mining Act, encouraging the development and use of new technologies, and implementing compensatory measures for regions where shale gas extraction might take place.
If production of shale gas is approved at a governmental level, there is still another hurdle to overcome. The Minister of Economic Affairs has stated that, following the advice of the NCEA, a local environmental impact assessment is needed for each shale gas project. If the results of that assessment suggest that the extraction of shale gas in a specific area cannot be conducted in a safe manner, the application will be rejected. Moreover, the relevant municipality needs to issue a declaration of cooperation for the extraction of shale gas. So far, 170 of 400 local authorities have declared that they are opposed to shale gas extraction1. It is, however, possible for the Dutch government to overrule individual municipalities through the so-called Rijkscoördinatieregeling, which gives the state the power to push through vital infrastructure projects.
At present the situation is that all drilling is on hold and no new licences for the extraction of shale gas are to be given until a formal government decision is made. Therefore, no extraction of shale gas is expected to take place in the Netherlands in the short term.