OREANDA-NEWS. December 18, 2015. Dutch economic affairs minister Henk Kamp must be more than ready for the holiday season after what has been an eventful year for the man in charge of the country’s energy policy.

Public concern over earthquake risk from gas extraction at the giant Groningen field forced him into a succession of policy shifts as he sought to balance safety concerns with maintaining supplies to the country’s households.

This balancing act reaches what could be its climax in the coming days, with the minister due to announce around December 18 his final decision on the Groningen production quota for the 2015/16 gas year (Oct. 1, 2015 through Sept. 30, 2016).

The field is Europe’s largest and has been producing gas since 1963. Kamp first introduced annual Groningen output quotas in January 2014, but these were progressively tightened as public unease grew.

An interim 27 Bcm ceiling is currently in place after the Council of State, the Netherlands’ top administrative court, quashed the minister’s decision in December 2014 to introduce a 39.4 Bcm quota for the 2015 calendar year and a June amendment reducing this quota to 30 Bcm. The court ruling came in response to a raft of appeals from over 40 parties protesting at Kamp’s Groningen policy.

The court-imposed interim quota can be raised to 33 Bcm should gas year 2015/16 turn out to be cold. But these limits only apply until six weeks after Kamp makes his long-awaited 2015/16 Groningen quota decision.

The Council of State has stressed the minister is free to set his own ceiling when he makes his announcement, so, in that sense, the ball is very much back in his court.

He could continue with his previous policy of setting Groningen quotas at levels consistent with security of supply in a cold year rather than adopting the court’s ‘floating quota’ approach that distinguishes between requirements in a cold and an average year.

If he went down that route, the new quota would be 31 Bcm, as this is Dutch gas transmission system operator Gasunie’s latest estimate of the Groningen security of supply level.

But the industry view is that Kamp will retain the 27 Bcm quota in 2015/16.

Any attempt to set a higher quota would leave him vulnerable to new legal challenges given the court’s insistence that 27 Bcm is appropriate for an average temperature year — which this is shaping up to be.

To aid his decision, Kamp commissioned a study to determine the highest level of Groningen output consistent with ensuring the safety of buildings in the area.

It found that the seismic risk from a 33 Bcm quota would be acceptable from 2016-2021 as long as 4,000 buildings were strengthened, which would give Kamp some cover if he decided to opt for a 31 Bcm quota.

However, the minister could decide to completely reverse the current operation of the Dutch gas system and mandate Groningen only be used once other sources of gas have been exploited in any given gas year. This option was explored in another study commissioned by the minister to inform his December decision.

Such a policy would require extensive use of the Netherlands gas quality conversion capacity to ensure sufficient quantities of high-calorific gas (such as gas from Norway or Russia or LNG) can be changed into the Groningen-type low-calorific equivalent that is consumed by Dutch households.

But such a radical change to the gas system would be difficult to implement and may have legal ramifications, since it would require TSO Gasunie to dictate daily production levels.

Because of this, it is unlikely Kamp will go with the second option for the 2015/16 gas year. However, it is possible that some variant of it could form the basis for a medium-long term solution to the Groningen conundrum.

But whatever his decision this month, Kamp is likely to disappoint some people. He will just hope he carries enough of the public with him to make for a slightly less fraught 2016.