In 2007, mineral extraction contributed 17 billion euro (more than 3 percent) to the GDP. In recent years, the proportion has grown. This is due to the sharp increase in gas prices, rather than to production growth. As a result, the unstable demand for Dutch natural gas is becoming increasingly important for economic growth in the Netherlands.
Price increase and production decline
Natural gas prices rose by over 28 percent in 2005 as well as in 2006. As oil and natural gas price are linked, upheaval on the oil market also has an upward effect on natural gas prices. The price increase amply compensates dwindling production. The relatively mild weather in 2005 and 2006 tempered the demand for natural gas and slowed down production.
Natural gas production and prices
Major contribution to economic growth
In 2004, volume growth in the sector mineral extraction was 11 percent, whereas in 2005 a negative growth of 9 percent was recorded. The contribution of mineral extraction to the GDP is substantial but unstable. In recent years, the sector has indeed had a huge effect on economic growth. In 2007, however, mineral extraction hardly grew.
In 2004, mineral extraction contributed 0.2 percent to economic growth. Economic growth in 2004 excluding mineral extraction would have been 2 percent instead of 2.2 percent. Volume growth of the GDP excluding mineral extraction would have been 1.8 percent in 2005 (in fact 1.5 percent) and 3.2 percent (3 percent) in 2006. Last year, the sector mineral extraction hardly contributed to economic growth (3.5 percent) in the Netherlands.
Imminent depletion of natural gas reserves
The bulk of natural gas revenues ends up in the government coffers, but depletion is imminent. Natural gas reserves were estimated at over 1,400 billion cubic metres by the end of 2006. At the current extraction rate of approximately 70 million cubic metres (2006), natural gas reserves will be exhausted within two decades.Maarten van Rossum en Cor Graveland