Earthquakes Rattle Production at Europe’s Biggest Gas Field

Europe’s scramble to find alternatives to Russian energy took another hit on Monday as the Dutch government decided to throttle back production at its mammoth Groningen gas field due to concern over earthquakes.

Dutch media reported that the government will cap gas production at the field, Europe’s largest and one of the 10 biggest in the world, at 30 billion cubic meters this year. Dutch Prime Minister Mark Rutte will reportedly officially inform Parliament on Tuesday. That would represent a sharp decline from recent output at the prolific field, which normally supplies more than one-tenth of Europe’s consumption of 460 billion cubic meters of gas. As recently as 2013, Groningen churned out 53 billion cubic meters, illustrating the impact of the government’s decision to ratchet down production there.

The timing is far from ideal: Natural gas production is falling in other traditional European producers, especially the United Kingdom. At the same time, Europe is trying to line up alternatives to Russian energy in the wake of Moscow’s annexation of the Crimean peninsula last year and constant brinkmanship over gas exports to Europe via Ukraine. Efforts to replicate the U.S. shale-gas boom in countries such as the U.K., Poland, and Lithuania have foundered on tricky geology and even trickier politics.

Groningen is particularly important because it acts as a “swing supplier” in the winter months, when gas demand in Northwest Europe is highest. Declining production in the old European workhorse will simply exacerbate Europe’s already sharp reliance on imported energy.

“The question is what the long term plan is. What about next year and the years after that?” said Tim Boersma, an energy expert at the Brookings Institution. “The decline in production of the EU’s last major gas producer effectively results in more imports,” he said, unless demand for gas trails off sharply.

As Groningen throttles back output, that could force Europe to look for more gas either from traditional suppliers such as Russia and Norway, or further afield, to the Caucasus, Central Asia, Iran, or even the United States, in the form of tankers full of liquefied natural gas.

The Groningen production cap is the chronicle of a death foretold. Since 1993, production at the field, jointly operated by Shell and Exxon, had been linked to a growing number of earthquakes. Those intensified after production at the field was increased in 2008, and a relatively strong jolt in 2012 alarmed local residents. The underlying cause is that the gas reservoirs are riven by vertical fault lines; gas production then stresses those existing fractures and leads to hundreds of small earthquakes since the 1980s.

In response to the public outcry — and an estimated 6.5 billion euros in property damage — Dutch authorities earlier this year limited the field’s gas output for the first half of 2015. In February, a report from an independent safety board concluded that the government and the field’s operators had essentially ignored the problem, prompting an apology from the Dutch government right ahead of provincial elections this spring. That assessment, in turn, led to the full-year production cap leaked on Monday, which is more drastic than what the government had initially planned.

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