The Groningen gas field in the Netherlands is vast. It's the largest in the European Union, and one of the 10 biggest in the world. Its available reserves of about 450 billion cubic meters are equivalent to all the EU's needs for one year.
It's exactly the kind of precious (if non-renewable) economic resource that would normally be front and center in an energy crisis like the one afflicting the region today. Every molecule of gas counts at a time when Europe is scrambling to cut its ties to Russia — source of about 40% of the EU's gas consumption — by chasing new suppliers, investing in renewables, curbing demand and wringing existing sources dry.
But that's not what's happening. Groningen production is actually being wound down with a view to halting it next year, part of a long-standing pledge to address earthquake risks and environmental damage. (Nederlandse Aardolie Maatschappij BV, a venture of Shell Plc and Exxon Mobil Corp., operates the field and is bound by current production limits. The Dutch state is a co-owner.)
It's one of several European energy paradoxes that deserve to be reconsidered in the wake of Vladimir Putin's invasion of Ukraine.
Without the pressures of war, the shuttering of Groningen might look justified. It was tapped for decades with little care for locals, whose complaints over tremors were ignored for a long time. The cost of continued production became linked to billions of euros in compensation claims and housing repairs. Groningen lost its "social license to operate," a paper by the Hague Centre for Strategic Studies (HCSS) concluded in 2019.
Yet today it also seems irresponsible to ignore the unintended consequences of a phaseout process that began in 2014 and effectively became final in 2018. Replacing 54 billion cubic meters of gas annually (in 2013 terms) meant increasing dependence on Russia. And now that dependence has to be unpicked at high speed and cost, straining European unity, morale and finances.
The pressure is so acute that even some locals have backtracked on their opposition to more drilling. Putin's actions are obviously a motivation, but there is also more possibility of adequately compensating residents today than there used to be. Surging energy prices mean that the value of remaining reserves could be around $450 billion (or $900 billion based on the peak seen earlier this year), analysts say.
For now, though, the language from Prime Minister Mark Rutte's government suggests a wait-and-see approach. There is still plenty of local anger against the field; enough that Groningen continues to be described as a last-resort "emergency" tool by politicians who have little appetite for an energy U-turn. Given enough time to develop alternative sources and infrastructure, from smaller fields to coal-fired plants, replacements exist.
The danger with this approach is that time is exactly what Europe doesn't have. Putin is throttling gas supplies to countries that don't play by his rules — including the Netherlands. The global economy is weakening, with the price of energy a key factor. Groningen is right there: Getting back to producing up to 20 billion cubic meters per year would theoretically be like "flicking a switch," says Rene Peters of energy research organization TNO. "The obstacle is political acceptance."
As Daniel Yergin, author of the classic hydrocarbon history "The Prize," summed it up pithily to the New York Times: "Guess what, this is an emergency."
If war can't entirely change the politics of pumping more fossil fuels in an earthquake-prone region, there should at least be more recognition of the need to plan for the future and to help Europe as a whole. HCSS analyst Jilles van den Beukel suggests tapping Groningen specifically to hit EU-wide targets of 80% of storage capacity due for November. The more gas is stored, the less dependence there is on imported supplies.
There is obviously no easy fix: Nobody with a blank canvas today would willingly choose to intensify fossil-fuel production.
Yet the Groningen debate is one of several signs that suggest a disconnect between ambition and reality. It's dispiriting too to see Germany sticking to its 2011 pledge to quit nuclear energy — a policy decided when Fukushima, not Ukraine, was on everyone's lips. Anne-Sophie Corbeau of Columbia University's Center for European Policy says postponing the decommissioning of nuclear reactors in Germany and restarting those already shut would be costly and complex but would help Europe cut demand for gas.
As Europe's leaders beat a path to countries from Algeria to Azerbaijan to secure more energy supplies, they should remember to look closer to home, too.
Lionel Laurent is a Bloomberg Opinion columnist covering digital currencies, the European Union and France. Previously, he was a reporter for Reuters and Forbes.
Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement.