production of low calorific gas from the Groningen field when the licence holder exercises the extraction permit
Amendment Gas Act and Mining Act in connection with the termination of gas extraction from the Groningen field
With the proposed amendment of the Gas Act and the Mining Act, a further step will be taken in the implementation of a decision of the Dutch cabinet of March 2018 to end gas extraction from the Groningen field as soon as possible from the point of view of safety. In 2018 both laws have already been amended to adapt the system around the extraction of gas from the Groningen field to a system in which no more gas is extracted from the Groningen field than is strictly necessary for security of supply, using all other available means and methods to meet the demand for low calorific gas (Stb. 2018, 371). To this end, the Minister for Economic Affairs and Climate takes an annual decision on the level of gas extraction and the way in which such extraction should be carried out (the operational strategy). The holder of the extraction permit for the Groningen field is then obliged to implement this strategy exactly in this way.
At the time, it was planned that gas extraction from the Groningen field could not be terminated until 2030. It is now clear that an earlier end of the extraction is more likely. The demand for low calorific gas has recently decreased to such an extent that the last phases of extraction from the Groningen field will soon begin. The Gas Act and the Mining Act need to be adapted to these phases.
In the first phase, the field is used in a different way than before. No longer is a volume extracted on an annual basis depending on the temperature. Instead, the Groningen field serves as a reserve in exceptional cases. In order to ensure that the field can be used in this way, a limited number of production sites are kept operational by producing at a minimum level (minimum flow). Only in specific cases can gas extraction be adjusted and above the level of minimum flow if this is necessary for security of supply. To this end, the Gas Act and the
Mining Act are provided with an appropriate framework.
The current system whereby the Minister of Economic Affairs and Climate Policy makes an annual decision on the permitted extraction is retained as a basis. However, this decision may also involve an extension of the decision taken for the last gas year rather than the adoption of a new operational strategy. The changes to the present legislative proposal suggest that extraction is no longer carried out on an annual basis depending on the temperature (the degree-day formula). Appropriate to this new phase, it is currently specifically regulated that and in what exceptional situations the Groningen field will be used above the level of minimum flow. There are two types of situations: If deployment is necessary as a so-called backup for the network operator of the Gasunie Transport Services (GTS) or in case of physical high demand (due to cold) which cannot be covered by the other means.
Then, the moment comes when gas extraction from the Groningen field is no longer necessary to meet the demand for low-caloric gas and thus the extraction from that field comes to an end (phase 2). The Mining Act explicitly states that no more gas will be extracted from the Groningen field, not even because of the minimum flow. That provision (Article 52c as set out in Article V(B) of the bill) may contain a technical requirement. This also puts an end to the system of defining and implementing the operational strategy. The bill also regulates the obligations of the holder of the exploitation permit of the Groningen field after the closure of that field. This involves a specific duty of care and the obligation to monitor the development of seismic safety.
In view of the nature of the proposal (regulation of gas extraction Groningen field by a single licence holder), no mutual recognition provision has been included.