The Dutch government has ordered large Dutch industrial users to phase out the usage of Groningen natural gas by 2022 to reduce low-calorific gas consumption and gas extraction from the field. Instead, they will have to switch to renewable energy sources or use a different type of natural gas (high calorific gas, which has less nitrogen).
By taking this decision, the government also intends to address the issue of earthquakes, which are frequent in the region and have led to several production decreases in the recent years. The government believes that the phase out of Groningen supplies is unavoidable and leaves the transition alternatives up to the concerned companies. They will have to adapt their equipment to cope with the higher calorific gas coming from Germany or other countries.
The gas extraction from the Groningen gas field in Europe was progressively reduced from 42.5 bcm in 2014 to 33 bcm in 2015, 27 bcm in 2016 and 21.6 bcm in 2017. As a result of the last Government announcement to cap it to around 20 bcm/year by 2021, the gas production from the field will have almost halved in 4 years. However, the highest court in the Netherlands rejected the latest production cap plan in November 2017 and ordered a new decision within 12 months on how much gas can be extracted onsite, where drilling operations have triggered minor earthquakes.
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