If extraction of shale gas will one day take place in the Netherlands, it must be accompanied with compensatory measures for the region concerned, Minister Kamp said.
The Netherlands has been a large producer and consumer of natural gas following the development of the Groningen Gas field in the 1960s, the largest of its kind in Western Europe. A lack of natural gas has historically been a key driver behind shale gas development, and, given the abundance of resource in the Netherlands, there has unsurprisingly been no extraction of shale gas to date. Given that current forecasts predict a significant decline in gas revenues over the next decades, there is a greater potential relevance for shale gas in the future.
According to the U.S. Energy Information Administration, the Netherlands has approximately 17 trillion cubic feet of technically recoverable shale gas reserves. In 2009 EBN ("Energie Beheer Nederland") mentioned that the stocks could even rise to 500 trillion cubic feet. However, currently the stocks are estimated around 500 billion cubic feet.
Dutch political sentiment has historically been largely pro-shale gas. The Dutch Energy Council (the Dutch government's senior advisor on energy matters) also voiced its support for shale gas in February 2011. The first setback came in 2011, when the Dutch District Court of Den Bosch ruled that the local authority Boxtel, who had granted a company permission to conduct test drilling, did so unlawfully. That has sounded a cautious note for the exploration and production of shale gas.
Concerns have been raised by Dutch environmental groups, civilians as well as enterprises such as brewing groups and water companies that drinking water could be contaminated, earthquakes could be triggered and methane could be released as a result of hydraulic fracturing ("fracking"). The Netherlands has traditionally had access to clean drinking water, the supply of which is of prime importance to these companies.
In addition to the environmental concerns, the economic viability of shale gas extraction in the Netherlands has also been questioned. The initial estimate is that the Dutch shales lay much deeper than those in the U.S.A., at approximately three to four kilometres below the surface. Other factors impacting the viability of shale gas production in the Netherlands include its dense population and infrastructure as well as the presence of natural reserves.
Ministry of Economic Affairs Report August 2013
In August 2013 the Dutch Ministry of Economic Affairs published a report on the potential risks and side effects of shale gas extraction. The report takes the view that the environmental risks associated with extraction are manageable, so long as the correct guidelines are in place. One example is the risk of water contamination; which the report concluded could be managed by regulating the storage of chemical waste, arguing that stronger regulation would prevent methane escaping via water systems. The report, which also concluded that the risk of earthquakes would be minimal, has been heavily criticised by the public.
NCEA Advice September 2013
Following the publication of its report in August 2013, the Minister of Economic Affairs requested advice from the Netherlands Commission for Environmental Assessment (NCEA) on the scope and quality of the findings. The opinion was published on 19 September 2013 and the NCEA recommended a mandatory (local) environmental impact assessment for each individual shale gas project. Moreover, the NCEA advised, among other recommendations, that fracking should be avoided in certain areas, such as those where faults in the earth's crust are present.
Announcement Minister November 2013
Following from the NCEA's report, the Minister announced on 13 November 2013 that the actions set out below will be taken:
- A strategic environmental assessment (structure vision) The Minister commissioned a strategic environmental assessment, in which a long term spatial planning strategy is to be developed. The purpose of this approach is to gain insight into the most suitable locations in the Netherlands for extraction of shale gas. The social costs and benefits, as well as the energy transition will also be incorporated in the structure vision. The Minister aims to have the vision ready by the end of 2014, or beginning of 2015.
- Adjustment of the Dutch mining act The Minister intends to adjust the Dutch Mining Act so that fracking will be explicitly identifiable in the Act. The process of adjusting the Act has already been put in motion. According to the Minister, the amended law will be in force per 1 July 2014. Moreover, the Minister also looks into the possibilities to introduce structure visions as an evaluation framework as part of the Mining Act.
- Innovative technologies to reduce risks During the development of the above two points, the Minister will consider and discuss possibilities to reduce the identified risks, that is, by the development and/or use of new technologies before taking a formal decision. This research is expected to be ready mid-2014.
- Compensatory measures The Minister intends to develop a model which offers sufficient compensatory measures for the region where extraction of shale gas might take place in the future. The Minister finds it of great importance that society is fully involved in the whole process. What kind of measures should be offered is not made clear yet by the Minister. The model will be published together with the structure vision mentioned under the first bullet.
At present all drilling is on hold and no new licenses for the extraction of shale gas are issued until a formal decision has been made. Therefore, no extraction of shale gas is expected in the Netherlands in the near future. It is worth noting, however, that the Minister has issued permits for exploratory drilling of geothermal resources, even though the producers of geothermal energy also use the controversial fracking method. However, the fracking method used for geothermal energy is said to be less intrusive and is applied on a smaller scale.
If shale gas production is approved, there will be other implications. Following the advice of the NCEA, the Minister decided that a local environmental impact assessment is needed for each shale gas project. If the results are negative, that is, the extraction of shale gas in that specific area cannot be conducted in a safe and responsible manner, the application will be rejected. Moreover, the municipality in question will have to issue a declaration of cooperation, formally agreeing to the extraction of shale gas. So far, 33 of 400 local authorities declared that they are opposed to shale gas extraction. If one of these municipalities refuses to issue the declaration, it is, however, possible for the Dutch government to overrule the municipality through the so-called Rijkscoördinatieregeling, which gives the state the power to push through vital infrastructural projects.
On 26 October 2012, the European Commission adopted a proposal for a new Environmental Impact Assessment Directive that would amend the current directive (Directive 2011/92/EU). In its first reading of the proposal the Committee on the Environment, Public Health and Food Safety of the European Parliament proposed to amend the proposal in such way to include environmental impact studies for non-conventional hydrocarbon exploration and extraction projects, such as shale gas, regardless of the amount extracted. The current directive only requires such studies for gas projects where the amount extracted exceeds 500 000 cubic metres/day. As a consequence, shale gas projects fall normally outside the scope of the Directive.
The suggested amendment of the Committee on the Environment, Public Health and Food Safety has been adopted by the European Parliament on 9 October 2013. This means that exploration and hydraulic fracturing extraction activities for non-conventional hydrocarbons (shale gas and oil, ‘tight gas, ’coal bed methane‘), regardless of the amount extracted is included in the list of made subject to environmental impact assessment. The matter has now been sent back to the Committee for re-consideration (second reading). The vote was put back to a later session.
As mentioned above, the Netherlands is already planning to make an environmental impact assessment mandatory for each project, regardless of the amount extracted.