Friday, February 9, 2018

Global Shale Law Compendium: Shale Governance in the Netherlands

Written by Chloe Marie – Research Fellow

The Global Shale Law Compendium series addresses legal developments and other issues related to the governance of shale oil and gas activities in various countries and regions of the world. In this article, we will highlight governance actions taken by the Netherlands to develop policies specific to shale gas development. 

The Groningen Gas Field located in the north of the Netherlands was first discovered in 1959 and is home to the largest reserves of natural gas in Europe. In recent years, due to the depletion of natural gas reserves in this Field, the Dutch government has demonstrated some level of interest in developing the country’s potential shale gas reserves. Following a lengthy process of study and investigation, however, the government has decided to forego development at this time.

In 2009, the Dutch Ministry of Economic Affairs – responsible for issuing well drilling permits – awarded a certain number of permits in order to carry out shale gas exploration in the provinces of Brabant and Flevoland. The Dutch government, however, encountered resistance from opposing political parties, several NGOs, and the general public who were concerned over the impacts of shale gas development on the environment and public safety. In 2011, amid rising tensions surrounding such development, the Dutch Ministry of Economic Affairs decided to interrupt shale gas exploration and commission a group of industry experts in order to investigate the environmental risks and impacts associated with shale gas development in the Netherlands.

In August 2013, Dutch Minister of Economic Affairs Henk Kamp released the results of the investigation in a letter to the Parliament and declared that “risks from fracking to produce shale gas can be overcome.” Furthermore, the Minister specified that “possible consequences and risks to nature, humans and the environment are manageable and can be addressed within existing legal frameworks.”

Following the release of this report, the Dutch Ministry of Economic Affairs asked for additional advice from the Netherlands Commission for Environmental Assessment (NCEA) for the purpose of evaluating the objectivity and quality of the report findings. In September 2013, the NCEA suggested the need to prepare an Environmental Impact Assessment (EIA) for each shale gas project, but pointed out that “it is not possible to declare shale gas exploration ‘safe’ and merely continue permitting specific projects.” Consequently, the NCEA strongly advised the Dutch government to develop a Structure Vision for shale gas exploration, which included the preparation of an EIA plan in order to assess whether shale gas development in the Netherlands would be environmentally sound and economically beneficial, to which the government agreed.

On September 18, 2013, the Dutch Ministry of Economic Affairs informed the Dutch Parliament that a Structure Vision would be developed in cooperation with the Dutch Ministry of Infrastructure and the Environment. As a first step, the Dutch government declared that it would conduct the EIA plan detailing the impacts of shale gas extraction and production in the Netherlands on the environment. The results of the EIA plan were to be identified later in the Structure Vision.

On September 9, 2014, the NCEA issued its Recommendations on the scope and detail of the environmental impact assessment relating to the Structure Vision and urged the government to provide “insight into the balance between the economic and environmental aspects at regional, national and where relevant international level,” among other things.  In October 2014, the Dutch Minister of Economic Affairs released the definitive Memorandum on the Scope and Detail for the Environmental Impact Assessment (EIA) for shale gas.

The Dutch government indicated that the EIA plan and draft of the Structure Vision was to be released within the year of 2015. Shortly thereafter, however, in a News Release dated July 10, 2015, the Dutch Ministry of Economic Affairs declared that “no commercial exploration or extraction of shale gas will take place in the Netherlands over the next five years.”

Interestingly, the Dutch Ministry of Economic Affairs expressed in the 2015 Energy Report that the government “do[es] not yet know whether the commercial exploitation of shale gas will be needed in the longer term” before highlighting that such need “will depend, among others, on the pace and the direction of the transition, and the use of natural gas will in any case be reduced as much as possible by means of implementing energy conservation measures and replacing it with renewable sources.” In addition, the Dutch Ministry of Economic Affairs pointed out that “many years of research will be required to facilitate a judicious decision-making process for licensing the commercial exploitation of shale gas, particularly in light of the potential risks and the social unrest caused by the shale gas debate.”

The years of study, carried out as part of the Structure Vision development, together with the implementation of the five-year moratorium, demonstrate that the Netherlands has the potential for shale gas development. In the short term, however, development will not occur while prospects for development over the long term also remain uncertain.

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