Frequent tremors make the Dutch worry about gas field

Frequent tremors make the Dutch worry about gas field

Frequent tremors make the Dutch worry about gas field

The field accounts for about one-third of the natural gas produced in the European Union.

Deep below the cow pastures and farming villages in Loppersum, the picturesque northeastern corner of the Netherlands lies an extraordinary resource: Europe’s largest source of natural gas, known as the Groningen gas field. Since its discovery in Groningen Province in 1959, the field has powered the economy of the Netherlands and has been a reliable supply of gas for Northern Europe. Five decades and counting is a remarkable run of productivity for a field of fossil fuel.

But as it enters old age, Groningen has grown cranky. A half-century of extraction has reduced the field’s natural pressure in recent years, and seismic shifts from geological settling have set off increasingly frequent earthquakes — more than 120 last year, and at least 40 this year. Though most of the tremors have been small, and resulted in no reported deaths or serious injuries, they have caused widespread damage to buildings, endangered nearby dikes and frightened and angered local residents.

In the light of those problems, the Dutch government is now demanding that the field’s operator, a joint venture of Royal Dutch Shell and Exxon Mobil, curtail production, making the Groningen field much more than a local worry. The field accounts for about one-third of the natural gas produced in the European Union. Any reduction in Groningen’s output might be especially hard for the European economy to bear now that tension in Ukraine is making the receipt of gas from Russia uncertain and as Moscow pivots its energy attention toward China.

“Groningen is one of the few facilities able to swing up in terms of production when demand rises,” said Jonathan Stern, chairman of the gas programme at the Oxford Institute for Energy Studies. He and other analysts say the cuts could influence gas supplies and prices in Europe in the event of a tight market this year. 

People living atop the Groningen field are trying to cope with the on-the-ground consequences. Nienke Pastoor and her husband, Jaap, spent years restoring a 110-year-old farmhouse. But an earthquake in 2012 left cracks in the outer brick walls and inflicted more serious structural damage to the home of Pastoor’s parents across the road, causing them to suspend plans to swap homes so the younger couple would be closer to the family farmland.

The Groningen field was developed with traditional drilling techniques. But the geological problems posed even by a conventional gas field could provide additional fodder for critics of hydraulic fracturing technique, or fracking, which is being used elsewhere to extract gas from shale rock and has been known to cause minor earthquakes in Britain.

As part of a three-year test, the Dutch government has ordered the joint venture that operates the Groningen field, Nederlandse Aardolie Maatschappij, or NAM, to cut production by about 20 per cent from last year’s level. It has also demanded other corrective measures, including reinvesting some of the profit from the field into the local economy. About 150,000 people live above the field, which occupies about 900 square km.

In a delicate balancing act, the government is taking those steps to avoid curbing output even more at Groningen, where production was already expected to start declining steeply in the next decade. The field contributes as much as 12 billion euros, or $16.4 billion, to the national government each year, or more than 4 percent of its revenue. Shell and Exxon do not disclose their profits from Groningen, but the companies are thought to split around €1 billion a year in earnings from the field.

Spoiled trust

Despite the government action, many local people are skeptical that anything will really change. “The main question is, Can you rebuild trust?” said Jacques Wallage, a former member of the Dutch cabinet and a former mayor of Groningen who is co-chairman of an effort to create a dialogue between the gas company and local citizens’ groups. “NAM has spoiled trust over the last 20 to 30 years.”

Jan Willem Jacobs, NAM’s project director for the Groningen field, made clear that the company accepted responsibility for the earthquakes and for fixing the damage they caused. Still, “it is a very unpleasant problem that I would rather not have,” Jacobs said in NAM’s hulking white-stone headquarters in Assen, a town about a half-hour drive south of Groningen.

For much of Groningen’s first 50 years, the field was so prolific that it required little additional drilling after the initial development. The 20 or so production centres scattered about the countryside — arrays of pipes and metal vessels — are partly hidden by trees, and for decades quietly did their work with little direct human intervention, sending the extracted gas into the national pipeline network and points beyond.

Then came the earthquakes, beginning in the early 1990s, with an increase in frequency and intensity ever since. In August 2012, a seismic threshold was crossed when a quake with a magnitude of 3.6, the largest so far, frightened residents and caused widespread damage but no casualties. “At that time, the region awoke to the real danger for this area,” said Albert Rodenboog, the mayor of Loppersum, who has helped coordinate efforts urging the national government and NAM to take action. The gas is trapped in porous sandstone deep beneath the ground.

 When the fuel flows to the surface, the rock contracts like a squeezed sponge. In some places in the Groningen area, this contraction has caused the surface of what is already a low-lying area drained by numerous canals to sink as much as 35 centimeters, or nearly 14 inches. That has caused NAM to invest heavily in new water pumping stations and other water management systems.

After the 2012 quake, scientists at the Royal Netherlands Meteorological Institute raised their estimate of how big an earthquake was possible from the field to a magnitude of 5, or more than 30 times the energy of their previous top-end forecasts.Even that would still be relatively small, compared with the 8.9-magnitude quake that caused the devastating tsunami that hit Japan in March 2011. But the Groningen tremors have been occurring relatively near the earth’s surface, said Bernard Dost, director of the meteorological institute’s seismology division. And because Groningen was not previously subject to earthquakes, he said, buildings in the region were not designed to withstand them.

During the three-year test, NAM will hold overall output to about 80 per cent of what was produced in 2013. Even with the cutback, Groningen will remain a large producer. The new annual production ceiling, at 42.5 billion cubic meters, would still be higher than the 38 billion cubic meters a year that Russia recently agreed to supply to China.But the Dutch government is placing Groningen’s most accessible gas further out of reach. It has ordered the company to sharply curtail production at five sites in the Loppersum area, which has been the epicentre of the quakes. Jacobs, the NAM project director, says those sites are in Groningen’s “sweet spot” — its most prolific zones for gas extraction.

The company and various government authorities have also agreed on a five-year, €1.2 billion package to repair and reinforce homes and other buildings, including more than 20 of the medieval churches in the region that have sustained substantial damage.