With its small fields gas infrastructure as a key asset, Element NL is gearing up for a sustainable future. EnergiePodium interviewed Menno Snel.
Sporting a new name "Element NL" and an ambitious Action Agenda, the Dutch Oil and Gas Exploration and Production Association (NOGEPA) is gearing up for a sustainable future without fossil fuels. According to its Chairman, Menno Snel, increasing the production capacity from the small gas fields and increasing gas storage offer realistic opportunities in the short and medium terms to reduce the dependence of the Netherlands on imported gas and to guarantee the security of supply.
Forget the name NOGEPA. Referring to the exploration and production of oil and gas covered the meaning perfectly in recent decades, but that is something that will become increasingly less relevant in the future. On Monday, 16 May, a new logo was presented in The Hague along with the new name, Element NL, and an ambitious Action Agenda in which the words ‘oil' and ‘gas’ have melted into the background. “With Element NL as their industry association, the twelve affiliated companies are looking towards a sustainable future within the hydrogen economy and in the field of carbon capture and storage (CCS),” says Menno Snel, who was hired as the association's independent chair in the summer of 2021 to give shape and momentum to the transition. “Our members study the potential of gas reserves in our subsoil and under the seabed of the North Sea and are also responsible for bringing the natural gas to the surface after drilling. They understand the geology better than anyone else and have an infrastructure that can be transformed relatively easily for the production, transport and storage of hydrogen. Depleted gas fields also lend themselves very well to the underground storage of CO2. Compared to hydrogen, this will be a temporary solution throughout the coming decades in which we will have to search for other sources of energy, but no less promising as a transition solution."
“If there is one country that seems to be made to play a key role in the hydrogen economy with relatively little additional investment, it is the Netherlands.”
On 16 May, Snel was emphatic that Element NL's members are eager to seize the opportunities offered by the hydrogen economy in particular. “For themselves, but certainly also for the Netherlands, which has everything it needs to become the hydrogen hub of Europe or even the world. The industry, logistics, infrastructure, knowledge, the proximity of wind power locations… If there is one country that – thanks in part to its unique location – seems to be made to play a key role in the hydrogen economy with relatively little additional investment, it is the Netherlands." Snel added that the oil and gas industry must have the time and space to carry out the transition and presented gas as the transition fuel. “But it must be Dutch gas. Our own, Dutch gas beats imported gas in many ways. Not only does it produce lower emissions of methane and CO2, but it also creates a lot of jobs and puts money into the Dutch treasury.”
From the Dutch treasury to the Groningen gas field is only a small step. One of the largest natural gas fields in the world has provided the State with so much revenue in recent decades that the country was able to lay a firm foundation for a prosperous welfare state. However, we all know how the story will end. Because onshore gas production in Groningen has led to severe subsidence and earth tremors, the government came under great political and social pressure and decided to spare the Groningen field. Snel says: “The small gas fields elsewhere in the Netherlands and under the North Sea that Element NL represents are small beer compared to the Groningen field. But I have always said, they are small, but not marginal, because together these gas fields produce substantial volumes of natural gas.”
“We certainly see scope offshore to ramp up gas production, but we do need government support for this.”
According to Snel, the Netherlands has been a net importer of gas since 2014, the year in which our political leaders decided to steadily reduce gas production in Groningen. “As long as the international energy market is functioning well, that doesn't have to be a problem at all. However, the war in Ukraine has made it painfully clear that security of supply can no longer be taken for granted, and that there is a risk that, as a small country, you may become dependent on countries that you would rather not be dependent on for your energy. In this case, Russia.'
On the day that Russia invaded Ukraine on the dawn of Thursday, 24 February, the phones at (then still) NOGEPA's offices did not immediately start ringing, says Snel. “As befits the proactive industry association that we are, we started calling the ministries and the organisations responsible for energy supply in the Netherlands ourselves. Together with our members, we had already mapped out the additional production capacity of the small gas fields and, in the days that followed, we fine-tuned that picture: 80 billion cubic metres. Knowing that Russia delivers 7 to 8 billion cubic metres of gas to the Netherlands every year, you can safely say that this is a quantity that will definitely make a difference.”
However, Snel adds that it takes Element NL's members time to increase their current production capacity. “This is partly attributable to the slow licensing procedures. Especially for offshore fields, we see scope for acceleration, but we need the government to help us with this. With a view to future investments, we also want the government to recognise that small gas fields can contribute both to security of supply and to the energy transition. Of course, reducing gas consumption is a good first step; ultimately, we have to move towards a world without fossil fuels. But certainly from a Dutch perspective, gas until then is the alternative with the greatest positive impact on the treasury, on employment and on climate. Even in comparison to liquefied natural gas (LNG), which we now have to import from the United States. We could produce it here, as shale gas, but we do not because there are still many questions to be answered about its impact on the environment, safety and health.”
“In the long term, it will become clear that small gas fields have paved the way for the hydrogen economy”
More than a week after Russia's invasion of Ukraine, NOGEPA/Element NL published a press release that ‘takes stock of the short, medium and long-term possibilities to ensure that the Netherlands has sufficient energy to meet its needs’. “In the short and medium term, small fields can play an even more important role. In the long term, it will become clear that they have paved the way for the hydrogen economy. As an ‘association for energy from the Dutch subsoil’, Element NL wants to play a key role in this transition by opening itself up to organisations and companies that do not originate from the oil and gas sector, bridging the gap between molecules and electrons.”
Following on from this, on 16 May, Snel invited the government on behalf of Element NL to participate in a ‘Transition Deal’ between the government and the industry with the aim of streamlining the energy transition in general and the hydrogen economy in particular. “Similar to the situation in the UK, for example, where the business sector and government came together in this area a few years ago. We need each other, we need to invest together and, based on a robust regulatory foundation, we need to ensure that the hydrogen economy gets off to a good start. To illustrate this with one relatively simple example: our ambition to electrify all offshore platforms will only become a reality if the government ensures that there are sockets in the North Sea that we can plug into.”
Element NL's Action Agenda
‘We are gradually reducing all our own greenhouse gas emissions to zero’ is the first of thirteen action items in the Action Agenda that Element NL presented on 16 May.
- reduction of greenhouse gases
- electrification of offshore installations
- setting out best practices for CO2 reduction in blue hydrogen projects
- emissions reduction for decommissioning projects
- introduction of producer responsibility
- transparency, monitoring and reporting of own emissions
- CCS platform
- production of blue hydrogen
- expansion of onshore energy hubs
- framework for hydrogen and CCS through system integration
- human capital agenda
- cooperation among knowledge institutions
- operational cooperation with the wind sector