[The following article was published in Offshore Industry, issue 3, 2023]
In the Netherlands, twelve companies have a license to explore for or produce natural gas. These companies are united in Element NL, which before 2022 was known as NOGEPA.
The companies study the potential of gas reserves in the Dutch subsoil and under the seabed of the Dutch part of the North Sea and are also responsible for bringing the natural gas to the surface after drilling. Element NL represents their shared interests. We talk with Arendo Schreurs, Director of Element NL about the association and the role of its members in the energy transition.
Looking for a position
“Since 1974,” Mr. Schreurs explains, “the Dutch Association of Oil & Gas Exploring and Producing companies NOGEPA has been supporting the interest of the companies with Dutch licenses. In 2022, we changed the name of the organisation to Element NL, as this better matches our new strategy and goals.” He continues, “Today, our members are looking for a position in the energy transition. Until a few years ago, oil and gas-producing companies stood by the wayside of this development as they considered it something that was not part of their business. Through the years however, they, our members as well, realised that they should step forward to play a role, too. First, they looked for ways to make their own operations more sustainable. This resulted in, for example, considerable methane reductions of more than 50%. Today their efforts are aimed at reducing the CO2 emission of the offshore production facilities, for example by using electricity at the platforms. Apart from this, with the energy transition in mind and the gradual phasing out of fossil fuels, they ask themselves questions such as, should assets be decommissioned right now or can we re-use them? Should their lifetime be extended now that demand for locally produced gas rises again? Should the assets be prepared for other purposes such as for CCS or for storage and transport of green hydrogen?"
All these questions made us realise that we, as their supporting association, too, should be rethinking our role. This resulted in a new strategy with a new action plan. Also, we decided to change our name in Element NL. With this name, we want to express that we are part of a collaborating system. Government, our association, our members, and the entire supply chain are all part of the energy transition and each of us has an important role to play in this. Together, we are working on a CO2-neutral energy system. Our natural gas still is of elementary importance in this. It provides security of supply for households and is a raw material for the industry. During the transition, the Netherlands can therefore rely on safe, clean, and affordable gas production and looking ahead: today, our pipelines carry natural gas, beyond tomorrow mainly new forms of energy.”
Three main themes
According to Mr. Schreurs, the new action plan is roughly based on three main themes. “First of all, we want to aim for the continuing supply of natural gas, however with a footprint smaller than that of importing gas, for example by reducing emissions at offshore facilities. Second, we look at ways to reuse the offshore infrastructure for storing and transporting green energy or CCS, and third, we want to keep the working environment of our industry-relevant for current and future employees. For these three themes, we have set up thirteen action items setting out what we will be doing in the years ahead. The energy transition should be speeded up to provide alternatives for fossil fuels. However, it is also clear that it will take years before renewable sources will be able to produce enough energy to deal with the growing demand. Therefore, everyone should realise that the world still needs fossil fuels in the coming years.
Most important producer
The war in Ukraine shows that being dependent on the import of energy makes us vulnerable. Apart from this, and people sometimes tend to forget this relevant argument, importing energy has a larger ecological footprint compared with producing gas ourselves. On top of this, with the right conditions, local production is also more cost-competitive. In the European Union, the Netherlands is the most important producer of natural gas and we have one of the densest pipeline infrastructures. With the current gas volumes available in our part of the North Sea our members are very capable of speeding up production to supply higher volumes. For this however, the Dutch government should create the right conditions, for example by adjusting the permitting procedures. So far, our efforts resulted in raised awareness by the Dutch government that it should be easier to explore and exploit existing smaller gas fields. These smaller gas fields are typically the fields our members are operating at. Still, the smaller fields are important as they contribute to one-third of the total national demand for gas, and two-thirds of this is produced offshore. The Dutch government has recently announced that the industry will be allowed until 2047 to produce natural gas in the North Sea. This is a very positive development, as this clarity hopefully gives our members a solid base to keep on investing in their much-needed existing and new assets and fields.”
Widening of the scope
Apart from the thirteen action themes to support their members' operations, Element NL also aims to widen their scope. “We were founded as an organisation supporting oil and gas operators. However, we should not limit ourselves to this part of the industry as the entire supply chain is relevant to make our industry future-proof. This is why we are looking for further collaboration with other relevant organisations such as NWEA and IRO as it is better to search for similarities instead of focusing on differences. Also, we recently welcomed two offshore pipeline operators as associated members”, Mr Schreurs elaborates.
Considering further collaboration in the supply chain, Mr Schreurs looks with great interest at the UK North Sea Transition Deal. "A great example of collaboration is the UK North Sea Transition Deal”, he says. “This deal supports and anchors the expert supply chain that has built up around oil and gas in the UK, to both safeguard and create new high-quality jobs. The Deal will transform the sector in preparation for a net zero future and catalyse growth throughout the UK economy. A lot of innovative solutions in the UK have come from the supply chain. We can also learn a lot from the offshore wind industry. More and more participants in today’s offshore wind tenders, give start-ups a role in their tender bids and this could also be the case for oil and gas projects as this could improve the integration of renewable energy solutions with existing or new gas production projects. In the past, gas operators wanted offshore wind farms as far away as possible from their assets because of safety reasons. This opinion now has changed, as they see the advantage of having wind farms nearby. I personally believe in integrated systems in which energy hubs, in whatever shape or size, will play an important role for the efficient transport of energy to the shore of various countries.”
Shaping a new system
“When I joined the association in 2013, the oil & gas industry was not well prepared for the energy transition. In the past decade, all eyes were on renewable energy with a focus on solar and wind energy. At some point, many people, including the Dutch government thought that we could do without fossil fuels. They thought of us as a problem, not as part of the solution that we are. Now, although the Dutch ambitions for offshore wind are high, we know that we still need the oil and gas infrastructure and that we should not aim at destroying an existing system but instead must focus on shaping a new one. In this new system, fossil will be gradually phased out in favour of renewable energy and our industry will meanwhile evolve towards new energy providers.” Mr. Schreurs concludes, “Energy will always be needed and in ever-growing volumes. However, as the production of energy changes, the industry will change as well, and the role of Element NL will also keep on developing. Collaboration with other branches and with the entire supply chain is needed to make this change a success. From a policy perspective, all signs are green as a lot has been achieved. Now the supply chain should be aware of this and act as well.”
The original article can be found here.