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Exploration wells to be allowed with permission from the government

Dutch Minister of Economic Affairs Henk Kamp announced that the government will impose a ban on hydraulic fracturing until 2020. “No commercial exploration or extraction of shale gas will take place in the Netherlands over the next five years,” according to a release from the Dutch government. “Existing licenses for exploration activities relating to shale gas will not be renewed.”

The press release stated that the Dutch cabinet has commissioned studies since 2013 on the effects of hydraulic fracturing, but “the studies have demonstrated that there is great uncertainty regarding the effects of drilling for shale gas.” There have also been no test wells drilled in the Netherlands, so it is not clear how much gas is even in place in the country.

Exploratory wells may be drilled in the next five years, but only at the request of the government, and not at the request of companies. Any exploratory wells will also address the possibilities offered by geothermal energy.

Kamp explained that he plans to present his energy policy going into 2020 at the end of this year. “In that vision, I will address the matter of how a responsible, reliable, and affordable supply of energy to Dutch households and businesses can be guaranteed in the future. I will also address the matter of how fossil fuels could best be used in the transition to sustainable energy supplies,” said Kamp.

The Netherlands play an important role in Europe’s oil and gas industry as the home of Europe’s largest natural gas trading hub in terms of spot volumes, according to information from the Energy Information Administration (EIA). While the Netherlands does not play a major role in liquids production, it is an important transportation and processing hub. The country is also Europe’s second-largest producer of natural gas, following Norway.

According to the International Energy Agency (IEA), the Netherlands is one of the most fossil-fuel and CO2-intensive economies among the IEA’s members. This has prompted the Dutch government to provide more support for renewable energy sources and implement policies to lower greenhouse gas emissions.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.