Groningen economy shrinks by 13% following shutdown of gas field

Photo: Wikipedia

Groningen’s economy contracted by 13% in the last year, mainly as a result of the decision to end gas production in the earthquake-hit province, the statistics agency CBS said on Wednesday.

Leaving out the figures for the gas sector, the province shrank by just 1%, in line with other regions that recorded an increase or decrease of 1%, or flatlined, in the second quarter of 2023.

The government, oil producers and the infrastructure operator GasUnie all agree that the Groningen gas field should be shut down next year because of the risk of continued damage from earthquakes triggered by gas production.

Production has been scaled down to a minimum of 2.8 billion cubic metres a year since last October. The government decided in June to keep the gas fields open for another year because of the uncertainty in the markets caused by Russia’s invasion of Ukraine.

The CBS said last week that the Dutch economy as a whole contracted by 0.3% when compared to a year ago. It was the second quarterly drop in a row, meaning the Netherlands is officially in recession.

The main brake on the economy was the high cost of energy, which particularly hit industrial regions such as Zeeuws-Vlaanderen, which contracted by 7%, even though the province of Zeeland as a whole recorded 1% growth.

It was a similar story in the IJmond area of Noord-Holland, including the industrial port of IJmuiden, which shrank by 6%. Nearby Haarlemmermeer grew by 2%, mainly thanks to the recovery of Schiphol airport after the coronavirus pandemic.

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