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Going Dutch could help break Europe’s addiction to Russian gas

Putting the Groningen gas field back into production would send less money to the Kremlin but carries political risks.

By Maximilian Hess

Hungary and Germany are the most frequent bugbears for criticism of Europe’s Russia agenda. Berlin has been hesitant to send serious defensive aid to Ukraine and remains Russia’s largest customer for hydrocarbons. Viktor Orbán, the Hungarian prime minister, has publicly resisted sanctions and even singled out Volodymyr Zelensky, the Ukrainian president, as an opponent in his election victory speech at the beginning of April.

Yet when it comes to winning Europe and the West’s geo-economic war with Ukraine, a third European Union member is also a major roadblock, though it receives less attention: the Netherlands.

Put simply, the Netherlands can provide the key tool to mitigating Russia’s natural gas leverage over the EU. Doing so, however, would be politically controversial and risk undermining the prime minister Mark Rutte’s fragile four-party coalition government.

The Netherlands is home to a natural gas resource the exploitation of which could be quickly intensified to help replace Russian supplies, which Moscow is using as leverage to keep its currency convertible and for which the EU has paid the Kremlin at least €23 billion since it invaded Ukraine. The Groningen gas field once produced as much as 88 billion cubic metres (bcm) of natural gas a year but is expected to produce just 7.6bcm this year, and that only after Rutte’s government announced a one-time expansion of output at the beginning of 2022.

In April the government confirmed Groningen’s demise. According to a spokesman the plan is “to permanently close down the field in either 2023 or 2024, meaning that production will be zero and all gas wells will be abandoned and cleaned up”.

[See also: Switching off Russian gas could put the planet on the road to a green economy]

The Dutch trepidation has been caused by virulent local opposition to the Groningen field, which has been found responsible for a series of tremors in the surrounding area. These had prompted complaints for decades.

An estimated 450bcm, or about a year’s supply for the EU, are likely to remain in the ground if Groningen is shut. The infrastructure is there to pump much of this out of the ground; 20bcm were extracted from Groningen in 2016 and the infrastructure remains for further output.

Returning Groningen to 2016 production levels, or ideally even beyond, would mean sending less cash to the Kremlin. It would also strengthen Europe’s ability to reject Putin’s gas-for-roubles demand, which is intended to ensure that the Kremlin can still buy foreign currency in situations where it is earning less from hydrocarbons, for example once Brussels’ enacts its proposed oil embargo.

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Renewed production at Groningen would also have an immediate effect given existing infrastructure. Berlin has requested more Dutch gas, and the company that operates the Groningen field is contractually obliged to supply it. Groningen may not alone be able to completely replace the 155bcm of natural gas the EU imported from Russia in 2021, but at least it can help to close the gap while liquefied natural gas (LNG) import infrastructure is built.

Yet just this January a Dutch economy ministry spokesman bemoaned the fact that “we cannot simply cut the proverbial pipes”. The tremors from the gas field damaged thousands of houses in the north-east of the country, forcing the government to pay out millions of euros in compensation.

The GroenLinks (Green-Left) party is the largest on the Groningen Provincial Council but the region’s electoral preferences are fractured, much like in the wider Netherlands. Despite being in office since 2010 Rutte, now on his fourth cabinet, has never had a parliamentary majority larger than four seats in the 150-seat parliament. His coalition has backed the climate transition and his most frequent partner, the liberal D66 party, has even called for phasing out the use of natural gas in new house construction.

Rutte’s position is further complicated by the fact that his first two governments denied the link between the tremors and Groningen until the Dutch Safety Board concluded in 2015 that ExxonMobil, Shell and the Dutch government “failed to act with due care for citizen safety in Groningen”. Since 2016 Rutte’s governments have imposed consistently lower production limits.

The obstacles to pumping more gas from Groningen are political, not economic. These issues should not be insurmountable, at least not on a European level. Local opposition in Groningen is, of course, understandable — people wish to protect themselves, their community and their homes against the threat of tremors — but the strongest earthquake to hit the area measured just 3.6 on the Richter scale. Small quakes have continued even as extraction has slowed, though only a handful have exceeded 3.0 on the Richter scale.

Earthquakes of that severity are a threat to property, not life. There is certainly a risk that renewing activity will cause more frequent, and potentially more intense, tremors. Replacing Russian gas imports, however, will help to save many Ukrainian lives and mitigate Russia’s threats to Europe. Increasing gas output in Groningen should be a no-brainer.

Further insuring the city’s 200,000 residents and those in the wider area against the geological risk from such activity is feasible. It would be an improvement on the present situation: Groningen’s own gas council warns that it is difficult to buy insurance against the city’s earthquake risk.

The Dutch government operates a compensation scheme for some damages, but if Groningen’s homes and community are going to be put at risk for the benefit of Europe then an EU-funded insurance scheme can socialise this risk across the bloc. Similar structures are used to fund flood insurance in the United States, for example. If Americans can distribute the cost of protecting beach homes and New Orleans, surely Europe can justify distributing the cost of the Kremlin’s bombs and threats to the geopolitical order.

It is, after all, the Dutch who have suffered the most among EU citizens from Putin’s wanton wars: 196 Dutch citizens were killed when Russian forces shot down the Malaysian Airlines flight MH17 over eastern Ukraine in 2014.

Structuring the incentives to restart and expand Groningen will serve as a pan-European solidarity measure. All EU governments, and in turn their citizens, could bear a share of the cost of insuring Groningen’s residents from the dangers of being at the front lines of the economic war with Moscow. This should be more attractive to many EU governments too than the solutions to dealing with Germany’s military squeamishness or forcing EU policy preferences on Orban’s odious, though democratically elected, government.

Europe needs carrots, not just sticks, to deal with its internal issues limiting its ability to counter Moscow. But the battle is existential, and in Groningen’s case an effort to help win it is well worth the risk.

[See also: Net zero is the energy answer to Russian aggression

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