Today, on 30 September 2016 the Minister of Economic Affairs published his final consent decision on the new extraction plan 2016 for the Nederlandse Aardolie Maatschappij B.V. (hereinafter ‘NAM’) for the next five years.
The extraction plan 2016 describes in which way NAM expects to extract natural gas from the Groningen gasfield; the annual volume of natural gas which needs to be extracted; and how negative effects resulting from these gas extractions will be mitigated.
Prior to finalising the extraction plan, stakeholders and other third parties (such as the Groningen and Drenthe provinces, several municipalities as well as the State Supervision of Mines (SSM) and the Technical Committee on soil movement) are requested to advise NAM on the draft extraction plan. On the basis of the Mining Act the Minister needs to formally approve the extraction plan by a consent decision. A draft consent decision was published this summer in order for any party to submit their views.
Gas extraction in the Groningen field area has been a topic of ongoing debate since extraction caused earthquakes. According to the minister the main focus of the final consent decision is a further limitation of safety risks and damages due to earthquakes caused by extraction of natural gas.
Conditions to the extraction of natural gas
Prior to the official publication of the consent decision, the minister already announced the key elements of the decision in his letter to parliament of 23 September 2016. In this letter the minister set out that:
- the maximum extraction volumes of Groningen natural gas will be lowered from 27 bcm per year (which was the original maximum extraction levels set out in the draft consent decision) to 24 bcm per year (as advised by the SSM).
- Only in the event of a colder (than an average) winter and only for that specific period an upward adjustment of the maximum extraction levels to 30 bcm is allowed.
- Extraction of natural gas needs to be done as evenly as possible to reduce the risk of earthquakes and therefore damages to buildings.
During the debate in the Second Chamber of Parliament prior to the publication of the final consent decision to NAM’s extraction plan, some 19 parliamentary motions were put to a vote. The passed motions regarded subjects such as the organisation of independent damages assistance, the increase of periodical inspections and an annual recap on whether or not the extraction level can be adjusted downwards. This particular motion on an annual recap has been taken into account by the minister through a condition included in the consent decision stating that NAM has the obligation to perform an annual review of its measuring and regulation protocol as a result of new insights or if changes of facts or circumstances require an adjustment.
The parliamentary motion on lowering the extraction level to a maximum of 21 bcm/annum and for a maximum period of one year, is rejected, as well as the motion for an inquiry to a phase out of the demand of Groningen gas.
Administrative appeal procedure
From the date of publication of the ministerial consent decision in the State Gazette, a six week period (starting from 30 September and ends on 11 November 2016) is open to interested parties who have submitted their views on the draft consent decision in an earlier stage, to appeal to the Administrative Jurisdiction Division of the Council of State. The minister informed parliament that 5530 views were submitted on the draft consent decision, so an administrative appeal procedure may well be expected.
NAM will have to submit its next extraction plan before 1 October 2020 for future natural gas production as from 2021.