About gold plated timber, renewables and Gasinstan
In Groningen, a province in the very North of Holland, lies an enormous gas field, formed during some 50,000 years. In the last 50 years we already used 80% of it. Such big swallowing in so little time was too much for Mother Earth, so it resulted in several earthquakes and ground subsidence’s. This caused 11.000 sagging houses, with serious damage.
The owners have been protesting for decades. It seemed unrealistic that they would ever succeed. First, their houses are in the remotest area in the Netherlands, very far from the government in The Hague. Second, the exploration of the gas field is for 50% owned by the State, which brings in a load of money in the States purse. And last but not least, the other 50% is owned by Shell and Exxon, and they have a special place in the hearts of the neo-liberals who run the country last decade.
Now, what happens? If you write this in a book, the reader would not believe it. These remote 11.000 people managed to get it on the national political agenda. And keep it there. For years. Some 7 years ago, the government finally agreed to pay a part of their claims. And, the government agreed to squeeze the gas supply each year a bit more.
So now, Holland needs to buy gas abroad; until now this came from Russia. It is about 15% of the gas Holland uses.
15% Reduction is a piece of cake – not!
Due to the conflict with Putin, Holland can expect a 15% shortage of gas. There are reserves to survive next winter, but from then on, a 15% reduction is necessary. As you know, on ‘Ya’ we reduced our energy use with about 80%. So, 15% should be a piece of cake. And indeed, the Dutch authority on gas, Dutch Association for Sustainable Energy, made a recommendation to reduce the use. A 15% reduction can easily be realized.
Guess what? Not! In Holland it is different. Perhaps the intimacy between our current government and the big energy companies stands in the way; however, the use and exploration of fossil fuels continue to be stimulated. Two examples:
1. While all European countries have subsidies on house insulation, the Dutch government stalled hers till January ’22. The ministry now subsidizes house insulation to a maximum of only 30%, and under special conditions. For example in France, the government simply subsidizes 100% of every house insulation.
2. The Netherlands is a paradise for oil and gas companies. We pamper them. Holland is a tax haven for them, like Guernsey and the Cayman Islands. And, they get grants easily and under sweet conditions. Hence the fossil energy could stay cheaper than the renewable energy. (That is, until the Russians invaded Ukrain and the fossil fuels prices exploded).
So, forget the reduction. Not the boycott, not even the high prices for fossil fuel that result from Putin’s actions seem to be able make the Dutch government taking reduction actions.
So the Ministry of Energy goes for energy from somewhere.
Gas instantly, a tempting Gasinstan contract
this is a great opportunity to switch to more renewable energy, and wind farms can replace gas pretty well. Holland is pretty far behind in her planning on the energy transition. Time to make up the backlog.
But, the process to put a serious wind farm at sea, takes about two to three years of bureaucracy; the government is not able to speed that up. And, we need the energy within one year,. A politician can’t wait longer, he can not leave his voters in the cold.
So, forget the renewables too. Replacing the Russian gas must go faster.
Then, let’s see…. gas from somewhere else? The Dutch government has already sent people to check it out in Azerbeizjan, Uzbekistan and other Gas-in-stan countries. Good for gas instantly.
The great advantage is that, as soon as the contract is signed, it only takes a year for the first delivery. In that year they can build the infrastructure: pump stations, gas tanks, etcetera, perhaps even a harbor extension for the gas tankers.
This requires big investments, so such contracts are always for at least 20 years. And, of course, you agree on the price for the whole period.
But, it can be done in a year. That’s a quick fix, and that’s what counts for any politician.
At any price?
The price tag
We’re talking lots of money here.
Just to give an idea, already in April the Netherlands paid Russia 34 million per day, would be on annual basis more than 12 billion Euros. Meanwhile, the price of gas is about 20 times higher than it was before the Ukrain war.
Before we get dazzled, let us ask one of the world’s independent experts on gas and energy, Mr. R. Krupen. He is climate consultant to the United Nations and a former director of a multinational gas company. The inside knowledge with the outside perspective.
He says that any gas contract is extremely expensive now. No matter which Gasinstan country you deal with. Just the gas over a period of 20 years will cost Holland very very much, he doesnot dare to say.
“Problem is”, says Mr. Krupen, “we only need the gas for one or two extra years, because then the renewables like wind farms can take over. These renewables make much cheaper energy than that expensive gas. And we have to build them anyways, because we are far behind on our energy transition agreements.”
Let us make a defensive number, based on the Russian gas price Holland payed last April. Then, a Gasinstan contract for 20 years would cost us 250 billion Euros.
So, since we are not politically able to reduce 15%, the energy question boils down to this:
Are we actually willing to pay 250 million Euro, to get us through one or two winters?
There is an alternative.
Gold plated timber, renewable energy boost, and pampering fossil fuel companies.
Why don’t we open the valve of the North Holland gas field for one or two winters? This costs nearly nothing and you’re not nailed to any Gas-in-stan regime with a 250 million contract that you don’t want for the remaining 18-19 years.
But, what would the protests be of the people with the sagging houses? They will protest, go to court, and they will win. And, what would the voters think? Like: “you see, them damned politicians never keep their word.”
Again, some price tags. We have 250 million Euros in the pocket if we don’t book a Gasinstan contract.
The 11.000 houses now get a claim from the State. The State is not clear about that, but the grand total must be hundreds of millions.
This money is nothing in relation to the billions of a Gasinstan contract.
So, can we find a bigger number than 11,000 houses? The biggest to be found is from a research that the owners of the sagging houses ordered to do. The University of Groningen made an extensive survey, concluding that the value of 180,000 houses would have dropped in the Groningen area. This is a total value of nearly 1 billion.
Let us buy every owner out, and give away the tenfold of what they estimate. The price will be 10 billion.
Then, every owner can gold plate every piece of timber sustaining his house, and build a copy next to it. This could cover much of the smart and grieves of the many years.
We are unbelievably behind on our energy transition process. We need windfarms, and fast. There are 3,800 MegaWatt on wind farms at sea right now. This has cost the taxpayer 12,5 billion euros. Now, because the improved efficiency, scale factors and experience, it can be 70% cheaper, so 3,5 billion Euros). OK, as long as they build another 3800 MegaWatt in two years, we double it for them. That price is 7 billion.
Now the production. It costs 1 billion per year to get the gas from the Groningen gas field and put it in the infrastructure. It is relatively not much extra work to putting extra gas through the existing system. But the companies who do it are used to be pampered, and spoilt as they are, they require their share. So, they want a double price, 2 billion. Well, we double that. Makes 4 billion per year. We will do that for two years, so we give them 8 billion in total to open the valves for a higher throughput for these 2 years. It is also bounty money, a last premium, a fare well present before we go for the renewables.
All together, instead of contracting ‘Gasinstan’, we open our gas field and we play SantaClaus:
| We give away to | The give away | The price (Euro) |
| All house owners with a (potential) risk of devaluated house (est. 1 billion Euro) | 10 times the prize of their estimated devaluation | 10,000,000,000 |
| Windfarm builders | A double subsidy | 7,000,000,000 |
| The gas production companies (Shell and Exxon) | 2 times their estimated costs | 8,000,000,000 |
| Us | The left over | 225,000,000,000 |
| Total | 250,000,000,000 |
In a soap you would not believe all this, but here it is reality. A golden path to make up our backlog on the energy transition, and to keep our energy much, much cheaper.
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