The Netherlands seems to be meeting the European agreement made on Tuesday to consume at least 15 percent less gas. In recent months, the appetite for natural gas has already decreased by more than 30 percent. The Netherlands therefore appears to be a shining example for Germany. That is much more dependent on Russian gas, but has so far only managed to save a few percentage points.
In recent months, the Ministry of Economic Affairs and Climate has campaigned for gas savings. But remarkably, it does not know which sectors have saved the most gas in recent times. Gasunie also says it is groping in the dark. “This is not traceable to us,” said a spokesperson.
The Central Bureau of Statistics knows more: the savings come for a large part of the industry, which recently consumed an average of 40 percent less natural gas. The very energy-intensive chemical and petroleum sectors in particular score well; the latter consumed two-thirds less gas in July. Refineries use just under 4 percent of all gas, cutting it down by two-thirds.
Distorted picture
But the numbers are distorted. A large part of the lower gas consumption is due to the fact that two of Europe’s largest refineries – including one of Shell – have been shut down for maintenance in recent months, says Erik Klooster, director of trade association VNPI. As a result, consumption was a fraction of normal. But now that Shell’s refinery is being restarted, gas consumption will also rise again.
Although more is happening: in Pernis, larger quantities of residual gases are now being used to keep the cracking process going. These gases are usually used, among other things, for the production of LPG. Shell also says that more hydrogen (necessary, among other things, to desulphurize diesel and petrol) from heavy fuel oil and asphalt. This saves on natural gas. If Pernis is back in full swing soon, the saving limit of 15 percent will not be endangered. The Netherlands will not fall below 20 percent, Gasunie thinks, provided the winter does not become too severe and new setbacks are not forthcoming. Gas shortages will then not occur.
Nevertheless, the industry is concerned. ‘I don’t believe we can go to sleep peacefully, as The Hague says,’ says Hans Grünfeld, director of VEMW, the association of large energy consumers. Because the decrease in consumption is certainly not only due to efficiency improvements, says Grünfeld. These account for 1 to 3 percent on an annual basis. High prices are a more important cause. ‘It is therefore inevitable that sectors shut down production.’
Glass, cardboard and paper
The energy-intensive packaging industry that produces glass, cardboard and paper, among others, is already running at a slower pace, as are some chemical and fertilizer factories, says Grünfeld, although he does not want to name names. Because these types of companies often operate globally, part of the Dutch production can be absorbed by factories elsewhere.
The outlook is bleak. When Gazprom cut supply via the important Nord Stream 1 connection to 20 percent this week, gas prices rose further. On Wednesday, a level of 227 euros per megawatt hour was briefly reached. At the beginning of June, the price fluctuated around 80 euros. Grünfeld: ‘I’m afraid we haven’t had the worst in terms of prices yet.’
Energy Minister Rob Jetten is currently consulting with 251 large consumers about a shutdown plan, should physical shortages arise and companies are forced to cease production. The plan takes into account ‘chain effects’, companies further down the production line that may supply essential products and must not come to a standstill. The plan will be ready after the summer, but Gasunie does not expect it to need to be used next winter.
Mainly affected households
Many consumers are also looking forward to the winter with fear and trembling. The previous peak of 200 euros shortly after the invasion of Ukraine lasted for a short time, after which prices fell again. Nothing is certain, analysts say. But if supplies from Russia remain as low as they are now or even stall, there is a good chance that trade prices will remain at their current extremely high levels for a long time to come.
According to the Central Planning Bureau, the burden is unevenly distributed and the high energy bill now mainly ends up with households, which saw their purchasing power decrease sharply. Their energy bills are likely to rise sharply again in the near future. This will further reduce the demand for natural gas. The Netherlands will therefore comply with European savings regulations, but at a high price. ‘Security of supply is no longer the essential problem for Northwestern Europe’, observes analyst Jilles van den Beukel of The Hague Center for Strategic Studies. “Affordability is.”
Correction: An earlier version of this article stated that a BP refinery was also shut down. That is not true.
Germany gas shortage ‘still to be averted’
A gas shortage in Germany can still be prevented if industry and consumers manage to save more gas. So says Klaus Müller, the head of the Bundesnetzagentur, the German gas distributor. Germany has been in alert phase 2 of its gas emergency plan for a month. As a result, gas suppliers are allowed to pass on the increased gas prices to consumers. This should lead to less gas consumption. If that is not done enough, or if Russia tightens the gas tap further than hoped, the federal government can move to alert phase 3 and ration the gas. Müller hopes for less consumption, so that the reserves can be replenished in time.