Resource dependence and energy risks in the Netherlands since the mid-nineteenth century

Highlights

• Energy risks have had a major impact on Dutch energy policy since the mid-1800s.

• Strategies to cope with these risks as employed are addressed.

• Given the importance of coal, the Dutch State established the State Mines in 1901.

• Diversification, along with domestic natural gas, reduced risks since the 1980s.

• Consensus politics worked for exploitation natural gas, not for current transition.

Abstract

Even though the Netherlands was well-endowed with domestic resources, but has also been dependent on foreign supplies. From 1850 onward, consumption of imported coal grew quickly. At the turn of the century, politicians became uneasy about this growing dependence. In 1901 the state-owned State Mines were established to exploit domestic coal and production gradually grew. In the interwar period the Netherlands became almost self-sufficient in coal. After WWII, it experienced a fast transition to oil dependence. In 1959 natural gas was discovered in Groningen by Shell and Esso, and the government forced them to join forces with the State Mines in the exploitation. The fast introduction of natural gas diminished the role of coal, but dependence on imported oil remained. The oil crisis triggered a reorientation of the energy policy, with emphasis on diversification in terms of resources and supplier countries. The export of natural gas was reconsidered. Shifts in energy resource consumption in the Netherlands in the past 150 years, were closely related to perceptions of risks. The Dutch government was strongly involved in previous energy transitions and will also have an important role to play in the transition to renewable energy.

Introduction

Energy is an essential input in an economy. For a sustainable development, secure supplies of energy are crucial. Although the Netherlands has been particularly well endowed with domestic peat, coal and natural gas, it has also always been dependent on foreign energy supplies and has thus been at risk of experiencing supply shocks. This paper takes a long-term perspective on energy import dependence and supply risks, and on how these (perceived) risks influenced energy policies. After a brief introduction, the paper starts with a quick glance at Dutch energy dependence and self-sufficiency over more than two centuries (Section 2). Subsequently, it delves more into detail, addressing coal and oil – in connection with domestic natural gas – dependencies, respectively (Section 3). Section 4 then draws a link with the strategies to cope with energy risks, as laid out by Högselius and Kaijser (in this issue). The historical analysis of energy import dependence and energy risks of the Dutch energy system and economy is used to draw policy implications for the current situation (Section 5).

In their introduction to the special issue on ‘Past and Prospective Energy Transitions’, Fouquet and Pearson (2012) stressed the necessity of an energy transition towards a low-carbon economy. They rightly observed that “Climate change is likely to be one of the greatest threats to global economic security and social stability in the course of the twenty-first century” (p. 1). However, for sustainable development, energy policies should not only consider negative externalities, such as pollution and CO₂-induced climate change. Especially on a shorter timespan, energy shortages can have detrimental effects on an economy. Resource availability and security are therefore important considerations in energy policy.

The Dutch economy is at the verge of an energy transition. The domestic extraction of natural gas, which has covered roughly half of the Dutch energy consumption since the 1970s, will diminish in the near future.¹ This paper takes a historical approach and argues that energy risks because of import dependence have had a significant impact on Dutch energy policy since the mid-19th century. And that energy dependence and the resulting energy risks present important policy implications with regards to the transition towards a low-carbon energy system. The Netherlands presents an interesting case in this respect because it, in contrast to most European countries, possessed large amounts of domestic resources in the form of peat, coal and natural gas. With the reduced availability of domestic natural gas, Dutch energy policy faces new challenges. However, as will be shown, even a well-endowed country like the Netherlands has had to face energy risks in the past; the strategies to cope with these risks as employed since industrialization will be addressed in this paper.

This paper relies mainly on qualitative research. The article draws on quantitative data on energy resource imports collected by Gales and Hölsgens (2016). However, the main data sources for the current article were digitized parliamentary debates and secondary publications. While import dependence has been an important consideration in the Dutch energy politics, and some authors have addressed it, for example in the context of the emergence of the Dutch State Mines, a long-term analysis of the dependence of the Dutch energy system has been overlooked so far.