Gas Production and Earthquakes in Groningen; Reflection on Economic and Social Consequences

Abstract

The discovery of the huge Groningen gas field with its unique flexibility characteristics had major consequences for the Dutch society. All houses became connected to the gas network and dependent on the L-gas from the Groningen gas field. The replacement of coal and oil by natural gas for heating raised the comfort of living as it was a cleaner carrier of energy. The capacity to produce in a highly flexible way made it possible to maximize the revenues by selling most of the gas at relatively high prices during (cold) winter times. Consequently, the sales of natural gas to domestic and foreign consumers generated significant revenues for the shareholders and, in particular, the Dutch government.

Until a few years ago, however, there was not much attention for the downsides of the gas depletion of the Groningen field. The Huizinge earthquake of 2012, however, changed this completely. It became increasingly evident that the inhabitants of the Groningen region pay a high price for the gas production.

In this paper, researchers of the University of Groningen reflect on the economic and social consequences of both the gas production and the resulting earthquakes. Attention is paid to the historical role of the Groningen gas field in the European gas market, the importance of the gas revenues for the Dutch economy, the impact of the earthquakes on the regional housing market as well as the social and psychological impact of the earthquakes and how the public authorities dealt with the concerns of the inhabitants of Groningen.