European gas security

News last week that the Dutch Government is to cut production from the Groningen gas field (called the Slochteren gas field by the Dutch) has prompted me to revisit European gas security, a subject I last looked at in 2007.

  • European conventional gas production appears to have peaked at 298 billion cubic meters (bcm) per annum in 2004 and has since fallen by 40 bcm/y (Figure 1). In the same time frame, consumption appears to have plateaued and import growth has slowed.
  • There are likely 5 reasons for the consumption plateau: 1) the recession and ongoing hardship in the € zone periphery, 2) high natural gas prices linked to LNG heading east, 3) increased use of coal that has become cost competitive, 4) growth of renewable electricity and 5) improving energy efficiency.
  • The forecast scenario, that is described in some detail below, sees European conventional gas production falling a further 60 bcm/y by 2020.
  • The reduction in Dutch gas production from Groningen is less important to indigenous European gas supplies than the anticipated near term peak and decline of gas production from Norway.
  • This post considers only conventional gas. The impact of shale gas in Europe is as yet impossible to predict for geological, social and political reasons.

Figure 1 Historical European gas production from 1970 based on data from the 2013 BP statistical review of world energy. The assumptions behind the future scenario are described in some detail below. Other countries include Germany, Italy, Romania and Poland.

Forecast scenario: The Netherlands

The Groningen gas field in The Netherlands is a world class supergiant with recoverable reserves of 2.8 trillion cubic meters. And so when news breaks that production is to be cut I take note. The reasons given by the Dutch parliament is increased incidence of small earth tremors.  The Netherlands have been a small but significant gas exporter within Europe for many years. The move to cut production from 54 bcm/y to 40 bcm/y will effectively end Dutch gas exports and extend the period of Dutch gas independence. This makes perfect sense from a perspective of protecting national interest. The Dutch government have capped production from Groningen for many years and in so doing have prolonged the life of this Tier 1 national asset giving rise to the extended production plateau (Figure 1).

The forecast for The Netherlands includes a staged reduction in production from Groningen from 54 bcm/y in 2013 to 40 bcm/y by 2017. The remaining production in The Netherlands, which is part offshore and part onshore, is declined at 3% per annum.

Forecast scenario: Norway

The Norwegian authorities publish more information on past and future oil and gas production prospects  than any other country. Rune Likvern at the Fractional Flow blog has an unrivalled overview of these statistics. I have used Rune’s latest detailed bottom up forecast for Norwegian gas (Figure 2) in my European scenario. This forecast sees Norway on a current production plateau going into a slow gas production decline.

Figure 2 A comprehensive bottom up analysis of Norwegian gas production based on data published by the Norwegian Petroleum Directorate and compiled by Rune Likvern.

Forecast scenario: UK

The UK forecast is very simply based upon a continuation of the average 7.5% per annum decline of the last 12 years. In the last 2 years, decline has accelerated to 14-20% and I therefore see the vast recent investment stemming those declines back to the medium term average. This is not an entirely satisfactory approach, but I do not have the resources right now to do better.

Forecast scenario: Denmark

Denmark is a tiny North Sea gas producer. Production has been declining since 2008 at an average rate of 6.5% per annum and this is forecast to continue going forwards.

Forecast scenario: Others

The others group comprises onshore gas production in Germany, Italy, Poland and Romania. For the last 13 years production in these countries has declined at a rate of 3.5% per annum that is projected to continue into the future. It is in these countries + the UK that coal bed methane and shale gas production offers the greatest potential for gas production growth.

Forecast scenario: Summary and history matching

The forecast scenario presented in Figure 1 is based upon the assumptions detailed for individual countries above. In 2007 I produced the forecast shown in Figure 3. That forecast has proven to be broadly accurate and is not materially different to the new forecast shown in Figure 1. The new forecast includes decline of Norwegian gas production and has about 25 bcm/y less production in 2020 compared with the 2007 version.

Figure 3 The forecast for European gas production that I produced in 2007 saw a future peak of 300 bcm/y. It has transpired that the peak was actually in 2004 and already past at the time this forecast was made. The data mis-match with Figure 1 is most likely down to data revisions.

Consequences for European energy security

Since Europe began to use natural gas back in the 1970s, demand growth has always outstripped supply growth (Figure 4) resulting in ballooning imports (Figure 5). Imports are now equal to indigenous supply. These imports place strains on the national finances of some countries and expose Europeans to energy risk. Gas imports come from Russia, where most pipelines cross Ukraine; from North Africa where Algeria is the main supplier and Libya is currently off line; and from Qatar where LNG ships need to pass through Hormuz and the Suez Canal.

Despite these substantial risks to energy security, European Union and UK energy policies remain firmly focused on CO2 reduction targets.

Figure 4 The historic gas production stack (Figure 1) compared with gas consumption for the whole of Europe including Turkey, excluding the republics of the former Soviet Union.

Figure 5 After more than 40 years of steady growth European gas consumption is showing signs of plateauing. This is in response to multiple factors, namely 1) the recession and ongoing hardship in the € zone periphery, 2) high natural gas prices linked to LNG Heading East, 3) increased use of coal that has become cost competitive 4) growth of renewable electricity and 5) improving energy efficiency.


The loss of 14 bcm/y  Dutch gas production adds to Europe’s energy supply / energy security woes. Pending decline of Norwegian gas production will make the energy security situation worse. The EU and the UK need an energy policy based around boosting indigenous supplies of affordable, reliable and dispatchable energy. Shale gas may provide part of the solution but the only long term dependable answer is nuclear power.


If you want to find and read more articles on Energy Matters then the easiest access route is through the Top Posts Index.

This entry was posted in Energy and tagged , , , , . Bookmark the permalink.

11 Responses to European gas security

  1. Roger Andrews says:


    One of the specific problems posed by diminishing gas supplies is whether the UK, which apparently keeps only two or three weeks’ supply of gas in storage, might physically run out of gas during a period of tight supply. According to this report you came within an ace of running out last March:

    Any comments?

    • Euan Mearns says:

      Roger, from memory the UK was self sufficient in gas until about 2004, so we didn’t need much storage. Demand is higher in winter than summer (see chart from Rune) and so some summer production got tucked away for use in Winter. The economics of this was driven by cheap summer gas being stored to be sold at higher price in winter. But then unexpected for the UK government the party was suddenly over. There was a rush to build LNG terminals. And then the new meme was that we didn’t need gas storage because we had gas stored in LNG tankers. But then again no one expected that our gas storage should be floating off the coast of Korea and Japan. Countries like Germany have massive gas storage. The UK limps along. Last spring we almost ran out of gas. This year should be a bit easier since we have had a very mild winter so far – the Polar Vortex has been scared off by UK MET Hadley. We have a new large HPHT field come on called Jasmine and Elgin and Franklin – the HPHT fields affected by gas leaks last year are kind of back on.

    • Dennis Coyne says:

      I am attempting to post a chart with a Norway natural gas forecast from May 2012 below, the lowest of these scenarios is similar to a forecast by Rune Likvern at about the same time, my forecast is based on Webhubble telescopes shock model and data from Mr. Likvern, the lowest of the three matches Rune’s forecast up to 2020, the other forecasts assume a higher reserve estimate and/or higher extraction rate from proved developed reserves.

      Attempt at image below:

      Link below:


  2. Visitor Q says:

    Hi, Netherlands total production is greater than figures in first chart

    • Euan Mearns says:

      Q, thanks for that. This rings a bell, I’ve sent email to Rembrandt to enquire. I’m simply reporting BP who say 63.9 BCM for 2012. This excludes flared and recycled gas. Your source says 78.2 BCM and so this is a huge discrepancy. The answer may lie in the recycled component. Let me get back to you.

    • Euan Mearns says:

      Here is the reply from Rembrandt:

      Hi euan, mainly due to the difference in caloric value between low caloric slochteren gas and high caloric non slochteren gas. I forgot the conversion factors . Rembrandt

      Since CH4 is CH4 I can only assume that the Slochteren gas contains impurities and that your source is reporting gross production while BP are reporting net CH4 – but I’m unsure about that, if anyone else wants to join in….

  3. BAU says:

    Euan, what I get from some articles here in the Netherlands is that in terms of -planned- production they overproduced in recent years and the cutback is not a lot lower than what it should have been in the first place. Which apart from a real reduction in exports like mentioned above in your article, there is the question of how this will affect the earthquakes (I know, tremors, but for us it’s quakes 😉 )

    It’s an interesting story to follow, with families on TV showing their damaged houses which they are unable to sell, and more activism in the area. The government has left this part to the tremors and low employment and housing issues for too long, they are mad. Also it emplants the message in all Dutch people: gas drilling = earthquakes. (true or not) It’ll probably not change the attitude towards shalegas for the better 🙂

    At the same time in the same northern area we had other gas issues as well. An Aluminum producer recently went bankrupt due to high energy costs, laying off quite some people. This reinforces the idea that the government is just taking the gas and not returning anything to the area. No jobs, no cheap gas, no money. Well, some money now 🙂

    If it was me I’d conserve the crap out of that gas field. But it’s a loooot of income right now which is spent right away..

    • Euan Mearns says:

      BAU – when I first heard about reigning in production on Groningen because of “quakes” I thought this was a government smoke screen and excuse to conserve resources. Groningen is huge, Holland quite flat, and depending upon the rock mechanics, depleting a reservoir can result in land subsidence – no such thing as a free lunch in the energy world.

      One thing I don’t fully understand is how reducing the production rate will solve this problem. It seems like it will only delay it. And so I will stick to my instinct that this is a good excuse to cut production to subsistence levels – that is perfectly sensible – and those folks affected will have to trade quakes for having heat and light and a solvent government. But i don’t know how bad the quakes are. I think the N is a bit above sea level and little risk of sea flooding – right?

      • BAU says:

        One governement minister responsible even said so; “this won’t change the quakes soon.” I don’t see how that can stop either, so there is a symbolic ring to it. Plus they probably wanted to go back to the ‘planned’ values extracted per year anyway.

        I assume like you say there is the feeling we don’t need to extract the whole lot asap and we need to conserve if possible. That’s also why we are buying Rusian gas too I believe.

        But there is some politics as well.. In march we have municipal elections and parties probably want to show they care. But every billion euro not coming out of the ground is a billion short in the budget right now. They’re wishing right now this would have happened in more economicly sound times.. Back in the 90’s they started a Norway-style fund to save the gas money in. That didn’t last long though 😉

        I don’t think there is a lot of worry about flooding risk, at least I haven’t heard. But it’s also the media that loves a “house with big cracks and an unhappy family afraid to put little Timmy is his room for fear of collapsing walls, unable to move with a flatlining housing market etc etc”

        But honestly after 1953 nothing big disaster-wise has happened here, people are a bit spoiled in my opinion. Like you say, we should be happy that we have gas, even with some residual affects.

        Btw, thanks for your blog, it’s great to have a proper European blog with some more indepth European articles, really interesting, a lot of people here are oblivious to the potential problems ahead.

  4. Pat says:

    Hi Euan. It would be great if you could add Twitter ‘Follow’ and ‘Tweet’ buttons to your posts to enable your information to get more easily disseminated.

Comments are closed.