The Netherlands and natural gas

Natural gas is extremely important to the Netherlands. The exploration and exploitation started in the province of Groningen, more than half a century ago. Since then, households and small-scale consumers have become connected to natural gas in a proportion of 98 percent. Half of the natural gas produced in the Netherlands is meant for domestic use, while the other half is exported.

The country is European Union’s only one with a net export balance of gas. Natural gas has provided 160 billion euros in revenues to the Netherlands over the last decades. It is needless to say that it is the cornerstone of the Dutch economy. However, the Dutch position has become less and less a given, after a rapid sequence of strategic and technological changes, within and around natural gas.

To maintain a strong position in natural gas, we have to anticipate future technological and economic developments. We can match the goal of having a large share of renewable energies in the energy mix. For this, the Netherlands begin with its foot in two starting blocks: one is the large scale use of natural gas and the other, a finely-woven gas distribution network. This position is unique in the world.

International perspective

The demand for natural gas increases worldwide. It will have doubled by 2030, according to several estimations. By then, gas will constitute 28 percent of the total energy demand, that is, a 5 percent increase over a twenty years period. It means that the European Union will get even more dependent of gas import from notably Russia, Norway and Algeria, as the demand increases and the European production remains even.

Gas imports are expected to come from the East and the South of the Netherlands. The regions of the Caspian Sea and the Persian Gulf contain two-third of the world’s natural gas reserves. Yet means of transport are necessary to bring gas over transit countries, from the point of production to the point of consumption.

Yet, pipelines and ships transport gas from distances that becomes larger over time. The transport of liquefied natural gas (LNG) becomes a feasible alternative, notably because of its low cost. It gives the suppliers the opportunity to become active on markets which would otherwise be economically inaccessible. Yet, countries in Europe, America and Asia compete on the deployment and configuration of the gas supply chain. It is important that the Netherlands takes a stake.

Three questions for EDGaR

In this context, EDGaR addresses three questions through its research program. What will happen to the gas infrastructure when biogas, hydrogen and syngases will be introduced? This question has to be answered to establish European gas quality standards. Moreover, it paves the way for the implementation of a gas distribution system that can carry gas of various qualities.

How to design energy systems that optimizes the use of gas in combination with renewable sources of energy? Natural gas is an excellent instrument to balance the electricity grid, because, to the difference with electricity, it can be stored. When the sun rays and the winds do not suffice for the production of electricity, energy producers can use gas to balance the grid in a timely fashion.

How does the international gas market, especially in Europe, will work in a near future? Energy companies trade and transport gas through supply chains that runs over several countries. Governments have to set new rules and regulations to facilitate the technical and economic operations. Overall, EDGaR looks at natural gas in an integrated vision, which encompasses the natural sciences, engineering and social sciences.