Speech by the Deputy Prime Minister and Minister of Economic Affairs, Agriculture and Innovation of the Netherlands, Maxime Verhagen, Dutch gas mission seminar, Tel Aviv, 6 June 2012
Ambassador Veldkamp, ladies and gentlemen,
Good morning and welcome to today’s seminar! It feels good to be back in Israel. I was here several times as member of parliament and as foreign minister. And this is my second trip to Israel in my capacity as Deputy Prime Minister and Minister of Economic Affairs, Agriculture and Innovation. Our two countries have been firm partners ever since the founding of the State of Israel. The outgoing Dutch government has made it a priority to invest in stronger relations with Israel.
My aim is to strengthen our political relations and to promote trade, investment and technological cooperation. In particular in the areas of agri-food and water, high-tech and ICT, logistics and energy. Which of course includes today’s subject: gas. The Netherlands has a lot to offer Israel in the field of gas: top universities and research institutes, a long tradition of international cooperation and world-class expertise. Dutch companies offer the latest techniques. For drilling at exceptional depths. For offshore installation. For designing and building ships, platforms, terminals, tools and applications. And for developing technologies to treat, transport and store natural gas.
You’ll find much of that expertise in this room today. Take Fugro, which offers advanced services, including geotechnical surveying, to the oil and gas industry around the globe. Or DHV, renowned for its studies on the health & safety and environmental aspects of large offshore projects and gas storage. Or KIWA, which is involved in designing the regulations for gas transmission and distribution in Israel.
The making of the Dutch gas hub
The Netherlands has been a leading country in the field of gas for more than fifty years. We became a major gas producer overnight, following the discovery of the Slochteren gas field in 1959. Suddenly, we had a new source of wealth and prosperity. Resources we had to learn to use in the interest of our economy and our people. We developed a state-of-the-art gas infrastructure. We connected virtually every household to the gas grid. And many energy-intensive companies, too. We also built connections with our neighbouring countries. And we founded the Northwest European gas market.
In recent years, we have further increased our capacity for trading, transporting and storing gas. And we’ve intensified our energy relations with gas-exporting countries like Norway and Russia. We have become the gas hub of Northwest Europe. We are now a major player in the global gas market. Enhancing security of gas supply for Northwest Europe for decades to come. And contributing to a more sustainable energy system.
We see gas both as a transition fuel to a more sustainable energy system and as an integral part of the energy mix of the future. Why? First, because the world has enough gas to meet our needs for the next 120 to 250 years. Second, because gas is flexible. It’s easy to switch a gas-fired power station on and off. Not so with wind or solar energy. So in a future with more renewable energy, gas is the ideal back-up fuel. Last but not least, gas is the cleanest of all fossil fuels. A gas-fired power plant emits far less CO2 than a coal-fired plant. So we can cut carbon emissions simply by increasing the share of gas in the energy mix. Gas is becoming more cost-effective than coal.
First, because the cost of carbon is rising. Second, because new technologies are making gas cleaner and more efficient, and therefore cheaper. No wonder the International Energy Agency is predicting a ‘golden age of gas’! The Netherlands wants to see a 40 per cent reduction in carbon emissions within the European Union by 2035. Gas needs to be part of a common European strategy. Many countries are already increasing the share of gas in their energy mix. Including in Northwest Europe. Yet gas production in the region is declining. So we will need to import more gas in the foreseeable future. This presents opportunities for the Netherlands and Israel.
The increasing demand for gas calls for innovation. Game-changing innovation. In a world in transition, new technologies enable us to explore innovative options. Like shale gas. Nuclear fission. Bio fuels. Deep-water drilling. So fostering innovation is at the heart of our government policy. Because true innovation, fresh ideas and sustainable solutions come not from government but from society. That is why I asked entrepreneurs and researchers what they needed in order to become more competitive and more innovative.
Their technological proposals and innovative ideas form the pillars of a contract I signed with the energy sector last April. In this contract, companies, researchers and the government commit to boosting research and innovation. To fostering international technical cooperation. And to informing foreign parties about the specific knowledge and expertise that the Netherlands has to offer in the area of gas. To stimulate innovation, we also need to educate more young people. For instance, at the Energy Delta Institute, an international energy business school with a primary focus on natural gas. And at the recently founded Energy Academy Europe in the north of the Netherlands, which is enhancing our leading position in the field of energy and the energy transition.
Shell, with its major research centre in Amsterdam, has a key role in developing new technologies to convert natural gas into clean fuels, lubricants and gas-to-liquid products. It is a major player in liquid natural gas (LNG) production worldwide. It is also a pioneer in the area of floating LNG. Our research institute TNO has a new LNG Test and Technology Centre. And with the new Gate Terminal for LNG in Rotterdam, built by Dutch firms Gasunie and Vopak, the Netherlands is now connected to the global LNG market. So we are truly the LNG hub for Northwest Europe.
The Netherlands, like Israel, has always been an open country. Open to new challenges. Open to new opportunities in the world. Open to newcomers on our own shores. That’s what has made us successful, right up to the present day. Some eight thousand (8,000) foreign companies from all over the world have set up offices in the Netherlands. Including major energy companies. Like InterGen from the United States, BP from the UK, Petrobras from Brazil and Gazprom from Russia. And, of course, Delek and Israel Chemicals. These companies value our strategic location in Europe, our attractive fiscal and business climate, and an environment conducive to cooperation and innovation.
Our current efforts to cut public spending in no way affect our constant efforts to improve our investment climate. We have introduced new fiscal benefits for companies that invest in research and development. We are cutting red tape. We have made it easier to hire highly qualified expats. Finally, we’re assisting foreign companies in setting up shop in the Netherlands. Including Teva Pharmaceuticals and Better Place.
Let me conclude. For over fifty years, the Netherlands has consistently pursued a strategy to make optimal use of our gas resources. Today, we are the gas hub for Northwest Europe and an important player in the global energy market, benefiting people around the world. Innovation, cooperation and openness are key to the success of our companies and researchers. I am convinced that Israeli companies, research institutes and the government can benefit greatly from Dutch expertise and experience in the field of gas. Expertise and experience we are ready to share with our Israeli counterparts.
So let’s join forces in the ‘golden age of gas’!
I wish you an energising seminar.
(www.rijksoverheid.nl / 07.06.2012)
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