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Volatile gas prices are worrying, but there is a solution

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Disturbing news came last week from Jera Co., the world's largest LNG trader, which expects possible price increases in LNG next winter due to rising global demand for the liquefied gas. An increase in gas prices will have direct consequences for energy prices and goods, which will further impact Dutch industries and citizens in the future.

We cannot allow ourselves to be lulled into a false sense of security by the combination of a mild winter and just pay for imported gas. A long-term policy for gas production from our Dutch soil is necessary to reduce dependence on foreign sources. In addition, the sustainability of the government-funded price ceiling is questionable. Especially now that the Dutch government needs to make cutbacks. According to initial reports, it cost no less than 2.7 billion euros in the first three months of 2023, which amounts to 360 euro per household.

Also read: Three lessons from the past year for the gas market in 2023

Fortunately, the Netherlands is in a position to produce natural gas from smaller fields, thereby reducing dependence on foreign sources. However, this does not happen automatically. The Ministry of Economic Affairs & Climate Policy (EZK) has a plan ready for this: the North Sea Gas Production Acceleration Plan, initiated by State Secretary for Mining Hans Vijlbrief. The goal of this plan is to increase the production of North Sea gas and reduce foreign dependence. It is imperative to take the necessary steps and seize the opportunity.

Dutch North Sea natural gas has a CO2 footprint that is more than six times smaller than that of imported gas from the US. Therefore, we can produce natural gas without hijacking scarce resources from countries with less economic possibilities. Furthermore, because the production and transport of LNG emit much more CO2 than locally produced natural gas, the upstream emissions of American LNG are more than six times higher than North Sea gas, as calculated by CE Delft in the report 'Gas Extraction on the North Sea'.

Countries in regions such as South Asia desperately need LNG to meet their daily energy requirements. Bangladesh, for instance, is facing years of blackouts because it cannot afford expensive LNG.

Therefore, we must embrace Dutch natural gas from small fields and start the acceleration plan immediately. This is the only way to limit the import of climate-damaging LNG and to stop penalizing countries with a lower economic status.

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