There is so much information just about anything today, that you sometimes can’t find it anymore. Then you need to take time, rest and a lot of coffee to look for it. I found some interesting things you might want to know about where our gas comes from, how much it costs, why we have to pay so much for it and more. The answers aren’t always what you hoped for, but they are the truth. For this article I talked with a spokesperson from GasTerra, from Eneco and from Gasunie and I searched great parts of the internet. Via Twitter I received some information from the Groningen activists as well.
I know that what you want, is to see the contracts according to which the gas is sold at what price and conditions. But if I would publish such information, GasTerra and any other gas trading company wouldn’t have any position to negotiate prices anymore. That’s why it is confidential information. Moreover: as soon as the annual accounts will be made, they will be published and then we will know what the prices in 2022 were. In the annual accounts over 2020 and 2021 you can already see the prices in these years. According to a message from the government in The Hague the members of Parliament have received some confidential information about it all, so that they will be able to debate about the gas issue. But why don’t we start at the beginning?
Sorts and origin of gas
First of all there are roughly two sorts of gas: low caloric and high caloric. Low caloric gas is high in nitrogen and burns less well than high caloric gas, that contains less nitrogen (and more gas). Natural gas from Russia and Norway is high caloric, while the Dutch natural gas from Groningen is low caloric. Now if you have a central heating boiler or a gascooker that is built for high caloric gas, you can’t use low caloric gas in it. In the Netherlands, Germany, Belgium and France all installations and devices for family use are built for low caloric gas. Now if the gas comes from Norway, it first needs to be filled up with nitrogen, which is done in special nitrogen generating plants (stikstoffabrieken in Dutch). Problem solved. Businesses most of the time use high caloric gas in these countries. In Belgium, France and Germany they are investing in devices that work on high caloric gas, since that is better for the environment.
Next question is: where does the natural gas come from? We hear about Russia, Norway and Groningen, but aren’t there more gasfields in Europe? Well yes there are, but they are all small. Groningen is the largest gasfield in the world, even if there are more than one gasfields in Russia. There are small gasfields on many places in the North Sea, but also everywhere in Europe and Asia. On this map you can see them. The gas used in the Netherlands comes from England by boat and is called LNG (liquid gas in barrels), from Norway, a rest still comes from Russia and if there is anything left of the Dutch gas, that is also used for ourselves.
Problems with natural gas production
Since Al Gore and Bill Clinton started talking about “global warming”, the world hasn´t been the same. Instead of doing some serious research after the causes for the – definitely changing – climate, politicians in literally all countries in the world started panicking about the end of the world and action needed to be taken right now. The world had to cooperate all together in order to fight the climate change, that was caused by us evil humans, according to the hired scientists, who were all too often paid by governments and other stakeholders. The climate always changes, whatever we do as inhabitants of our wonderful blue planet. Instead of just protecting the environment, nothing else was anymore discussed but CO2 emissions and nitrogen. Agreements in Kyoto and Paris followed, but they were so ambitious that no country could live up to them. Not only that: geo-engineering is done to make the sun shine during summer. This causes heavy rainfall and cold during the winter and who knows what more. We aren’t supposed to talk about it and the information is very hard to acquire.
Natural gas was immediately defined as “bad for the climate” and so the production in the small fields was decreased or totally stopped. Since the 1st of October also the gas production in Groningen, the largest gasfield ever, has almost stopped. In 2021 7 billion cubic meters were produced, this year it will be 4.5 billion and next year only 2.8 billion cubic meters. In 2024 the production in Groningen will be stopped and over. Yes the earthquakes in Groningen are too much to bare, but in the meantime even the most stubborn climate believers have grasped that natural gas is one of the most climate neutral forms of energy. Alas too late, because Europe put sanctions on Russian gas, Norwegian gas is also produced less and less and the Americans are more than ready to bring us LNG, liquid gas by ships, but the prices are soaring. It was a real ill-considered decision to stop gas production so fast and in so many gasfields everywhere in Europe at the same time.
A good substitute isn’t there yet and the EU also protests if you use nuclear power. Wind mills aren’t good for the environment at all, since they last at most 30 years, can’t be repaired most of the time and they contain some metals that are really bad for the environment. Futhermore they are produced by child slavery in Africa and also in China the production is problematic. Same about solar panels. I personally think it would be a lot better to just produce a fraction of the plastic that we produce and use now and to fly less. But people with private jets are growing and they don’t care at all about a clean air for their children.
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Internal EU market: an obligation?
Before I forget: I found the annual accounts of GasTerra, the seller of the Groningen gas. Indeed we did use 40 billion cubic metres of gas in 2021 (not 14 as I found in the statistics). Furthermore the production of the gas (getting it out of the ground) is done by a company called NAM, GasUnie arranges the transport and GasTerra the sales. Since the production in Groningen is decreasing, GasTerra also buys and sells gas from other countries, mostly Norway and England.
The sales are effectuated on the European internal day market and I got confirmed that indeed this is not an obligation, as I have always said. The internal market is an opportunity for people who want to sell their products not only in their own country, but also in other EU countries. Yet on the GasTerra website in the brochures they state it IS required to sell your gas there. Nope! There is something else, which is an agreement of solidarity within the EU: if your country has got gas, but other countries don´t, you should share your gas and so it is with everything in case of scarcity of goods. This is however not the reason why the Netherlands sell all our gas abroad: normally we should be able to keep at least 3/4 of it for ourselves and ‘share’ (sell) the rest to other countries within the EU.
Natural gas sales: prices and contracts
And then there is something else, namely long-term contracts with France, Germany and Belgium for gas from Groningen. These contracts are there, because in these countries the same installations as here are used, for low caloric gas. These countries are however changing their installations towards high caloric gas, because that is more ecologic: it contains less nitrogen and it burns better. Russia has such gas, but apart from the fact that Europe has broken all contacts with Gazprom, the Russian internal market needs more gas for themselves and the country started exporting more gas to China, India and some more Asian countries. So even if we’d want, the natural gas from Russia isn’t endlessly available. Until the beginning of this year, 37% of the total European gas came from Russia. The Netherlands have always used little Russian gas, about 2.3 billion cubic metres.
Now you can buy and sell gas with a long-term business contract or you can sell it at this internal European day market, where prices vary per day. Just like currencies and shares. In a long-term contract the prices are much lower, sometimes up to 90%, than on that day market. But the EU wants to slowly finish the gas use and so they don’t want member states to close new long-term contracts. If you want to have an idea about the day market and its prices, you could take a look here. TTF is the name of the Dutch market.
What I must conclude after a research of two days, is that GasTerra and Gasunie don’t want to open the contracts with Germany, Belgium and France and stop them. In this brochure by GasTerra you can see that gas production in the Netherlands is decreasing per year, so not selling our gas abroad would help us just a little bit and only for about two years. GasTerra will stop existing in 2024, because by that year there won’t be any export of Dutch gas anymore.
More about gas prices
So the selling prices of Dutch gas aren’t public, which is understandable. The only thing we know, is that this gas is sold with long-term contracts in which there are no fixed prices. This means that the prices are being formed at the internal European market or TTF. On the 24th of October, 3 days ago, the price for a megawatt hour of natural gas was €100. So then a kilowatt hour should be 10c. But we don’t know if that is the price the gas was sold for, because we don’t know if GasTerra uses day prices or maybe month prices or something else.
What we do know from the questions Pieter Omtzigt asked Minister Rob Jetten and Under Minister Hans Vijlbrief, is that the Dutch consuments pay about €0.25 per kilowatt hour. In Belgium and Germany they pay about €0.16 cent per kilowatt hour. That is a big difference as you see and this way even GasTerra should suffer heavy losses. I did all my best to find more prices of the Dutch imported and exported gas, but couldn’t find anything more accurate than this. We just haven’t got enough information to know what the prices are. In the link here above you can see how the gas prices tumbled in September and October, because even the climate helps us poor citizens get through the winter, by providing us radiant and warm weather.
Why can’t we just import Russian gas?
GasTerra has an article on its website that explains why this is difficult. Paying in rubles is ‘risky´, they state, because they need to open an account in euros AND an account in rubles at Gazprombank in Russia under Russian law. The transition to this new system went somewhat fast this spring and many gas buying companies in Europe couldn’t react fast enough. Others were stubborn and honestly this is the impression I got from GasTerra and Gasunie as well. Doing business with Russia is just not discussable, because there are EU sanctions as they say and they have the opinion that trading with Russia wouldn’t be appropriate. They don’t think about it any further and that’s it. Exactly like opening the contracts with Germany, Belgium and France. It is a matter of opinion, not of good thought or concern for the Dutch citizens. That makes it bad policy and a reluctant attitude towards the Dutch people. Towards their own profits as well. This is globalism and therefore leftist thought at the expense of the people in the Netherlands.
The sabotage of the Nord Stream pipelines
I found an interesting article on the website of Gasunie – all links are in Dutch today folks, I’m sorry! – about the sabotage of the Nord Stream pipelines of which Gasunie is a co-owner for 9% (only Nord Stream 1). If you read that article, you see the same indifference towards this Russian pipeline. We still received 2.4 bcm (billion cubic metres) of gas through this pipeline and you would expect that Gasunie would have offered to at least help research the sabotage and let us know who did it. Or that it would want to have the pipeline repaired. No such thing however and I really can’t conclude otherwise than that the Dutch government, that is for 50% owner of GasTerra and for 100% of Gasunie, is just reluctant to take any measures to have enough gas for its citizens. The reservoirs are filled for 80% only and any solution that would be working, is not discussable.
In this bizarre document that Gasunie sent me, you see that the Netherlands that use 40 bcm of gas per year, have to diminish towards 35 bcm in a year time, because more gas is just not imported or produced. It’s a fait accompli and we just have to see we get ourselves through the year in 2023. They even edited the document here. I read half of it and really had enough of this slackness by the Dutch government. It’s not that there is no solution to the gas and the whole energy problem, but it’s indifference and reluctance that keeps our government from taking any action.
Since information is difficult to be found in brochures on the internet of which I am not allowed to take screenshots, I have put the main statistics in a short thread on Twitter:
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