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4. DESARROLLO Y ANÁLISIS DE LOS MODELOS DE MERCADO

4.3. Análisis de los modelos y conclusiones obtenidas

4.3.3. Análisis del modelo de duopolio 2

4.3.3.1. Efecto de la fijación de la cantidad por turnos aleatorios

1 7 Rijkswaterstaat and waterschap Noorderzijlvest 1 8 Vopak 1 9 Penta Primair 1

Timeline August, 2012

Earthquake in Huizinge (August 16th, 2012)

January, 2013

 SodM publishes its report over the risk posed by induced earthquakes

 SodM sends a letter to the Minister of Economic Affairs including the results of analysis and advises to reduce gas extraction

 KNMI publishes its own report in response to the earthquake in Huizinge

 25th January: the Minister shares the new findings with the House of

Representatives; refuses to follow SodM’s advice; lays out 14 investigations to get a better insight into interests involved

May, 2013

Establishment of ‘Commissie Duurzame Toekomst Noord-Oost Groningen,’ also knowm as commissie-Meijer.

January, 2014

The Minister of Economic Affairs introduces a new set of measures aimed at limiting the earthquake risk, which includes the decision to decrease gas extraction.

The earthquake that took place in Huizinge on 16th of August with the force of 3.6 on the Richter scale has become the strongest that the Netherlands had ever experienced. Technically, it hasn’t exceeded the threshold of 3.9 on the Richter scale, a maximum magnitude value that was set at the time. Still, with houses trembling, cups ringing and paintings falling off the walls, this earthquake has lasted longer than the ones’ that came before it, causing people to run out on the streets in panic (van Sluis, 2012)48. “The earthquake that took place on Thursday, we have never

experienced anything like that before,” stated the mayor of Loppersum, Albert Roodenboog (van Es, 2012)49.

Despite this quite shocking experience the issue that has become prioritized right after the earthquake took place was compensation of damage claims. It was literally referred to as ‘highest

48 Sluis, B. van. (2012, September 1). De grond beeft. Dagblad van het Noorden. Retrieved from… 49 Es, A. van. (2012, August 18). Zwaarste schok in Groningen. Volkskrant. Retrieved from…

priority at that moment’ (van Sluis, 2012)50. The earthquake did cause a lot of damage51. In the

aftermath of the crisis, NAM has received 1250 damage claims, an outstanding amount

considering the fact that from 2003 up to 2012 NAM has in total received 1166 damage claims (van Sluis, 2012).

The first one to hint at the conflict of interests surrounding gas extraction was Jelle van der Knoop, the chairwoman of the association Groninger Bodembeweging (GBB). She expresses her doubts about the accuracy of the estimations of the severity of the earthquake risk.

Suggesting that in the light of the earthquake in Huizinge, there is a possibility that the Ministry of Economic Affairs, NAM and KNMI underestimate risk52. While GBB as such is not against gas extraction, it stresses that the government and NAM that should care more for the people. Because as for now it seems as if the interests of the state overshadow that of the local residents. In order to ensure a steady supply, the wellbeing of the people living in the area is jeopardized

(van Sluis, 2012)53.

The earthquake in Huizinge not only had a big impact on the province, it has also

attracted the attention of a governmental agency, the State Supervision of Mines. Alarmed by the the fact that the number of heavier earthquakes in Groningen kept growing, SodM has launched its own investigation focusing specifically on the Groningen gas field54. It has also done so

because apparently neither NAM, nor KNMI felt the urgency to investigate the event any further 2015: 52). However, according to Mrs. Renier, the project leader who worked on the case on behalf of the DSB, by taking this initiative SodM has joined the discussion surrounding the earthquake risk in Groningen, which has compromised its position as a supervisory body. SodM’s responsibility is to remain neutral, to assess the activities related to gas extraction, as

50 Sluis, B. van. (2012, September 1). De grond beeft. Dagblad van het Noorden. Retrieved from…

51 Using the EMS scale the DSB has categorized the earthquake as class VI, which entails slight damage. More

specifically, an earthquake of this category is “felt by most indoors and by many outdoors. Many people in buildings are frightened and run outdoors. Small objects fall. Slight damage to many ordinary buildings; for example, fine cracks in plaster and small pieces of plaster fall” (Onderzoeksraad voor Veiligheid,2015: 37).

52 She notes that NAM has already revised the maximum magnitude value several times over the course of years,

asking then how accurate are the current estimations, and if another adjustment of the value should be expected.

53 Sluis, B. van. (2012, September 1). De grond beeft. Dagblad van het Noorden. Retrieved from…

54 Previously, the investigations over induced earthquake had never focused on one specific field, but in general on

well as to evaluate how knowledge about the nature of the induced earthquakes is developed without trying to contribute to it itself.

SodM has published the results of its report in January, 2013, where it has stressed that the annual number and magnitude of earthquakes in the area has increased. Importantly, SodM has concluded that the maximum magnitude value couldn’t be determined based on the

seismological data available at the time. SodM has, however, insisted that the risk posed by the induced earthquakes has been underestimated. There is a possibility of much more severe earthquakes that would exceed the 3.9 threshold. It has also suggested that there is a connection between the earthquakes’ rate and the speed of gas extraction55.

After an intense discussion KNMI and NAM agreed with SodM that as of now it is impossible to determine the maximum magnitude value. However, they had trouble accepting SodM’s suggestion concerning the link between the earthquakes and the speed of production, as well as statistical models used to estimate it (Onderzoeksraad voor Veiligheid, 2015: 52-53). Still, SodM ended up publishing the report including conclusions that other parties, specifically KNMI and NAM, didn’t agree with.

In January 2013 KNMI published its own report. It recognized a.) that the number of earthquakes has increased and that this phenomenon seemed to correlate with increased

production56; and b.) acknowledged that the maximum magnitude value can’t be determined. In its report KNMI compared the induced earthquakes in the Netherlands to that abroad and based on the gathered information, it seemed that the maximum magnitude could reach 4.2-4.8 on the Richter scale. Thus, KNMI has concluded that the maximum value can’t exceed the threshold of 5 on the Richter scale (Onderzoeksraad voor Veiligheid, 2015: 53).

Also in January that year SodM has sent a letter to the Minister of Economic Affairs classifying the risk posed by earthquakes as ‘high’ (Staatstoezicht op de Mijnen, 2013). While knowing that at this point there is no way of telling how severe induced earthquakes can get, it chose to cite KNMI suggesting that the maximum value would be between 4 and 5. Based on its

55 Meaning higher volumes of gas extraction are accompanied by more frequent and more severe earthquakes 56 Correlation doesn’t imply causation. In reality there was no evidence that a decrease in production would lead to

theory that the speed of gas extraction is linked to the earthquakes rate, SodM advised the Minister to decrease gas extraction in order to lower the chance of heavier earthquakes.

On 25th of January, 2013 Minister Kamp shared new information concerning the risk induce earthquakes can pose with the House of Representatives. He has refused, however, to implement measures to mitigate earthquake risk, for instance, by reducing gas extraction as SodM had suggested. Instead he had stressed that not enough is known about the nature of the induced earthquakes to initiate any changes in gas production (Onderzoeksraad voor Veiligheid, 2015: 54). Therefore, he decided to lay out 14 investigations covering a broad range of topics concerning induced earthquakes to gather more information about the risk they pose, the quality of the risk (whether it is acceptable or not) and what measures can be implemented to limit its effects (See Table 25).

Seismologist Ronald van Balen from the Vrije Universiteit in Amsterdam explained Minister’s refusal to reduce gas extraction the following way (Lindhout, 2013)57. The gas from

the Groningen gas field is easy to extract, it is cheap and of good quality. It is vital source of energy for domestic market, as well as highly profitable export product. If the export of gas were to stop, the country would lose 2.2 billion per year. Thus, as Mr. Van Balen explains, the

decision to continue gas extraction is a political one. Although it entails a risk, it is a calculated one, he stresses, because at this point no one can claim with certainty that a heavy earthquake will take place.

Others were much less forgiving in their criticism of Minister’s decision, and of NAM that is held responsible for damage inflicted by the earthquakes. Local authorities openly express their indignation with the situation. Mayor of Eemsmond Marijke van Beek points out that Groningers are not someone to be easily moved by an earthquake. But now an independent study (report by SodM) warns that there is a chance for heavier earthquakes. It has caused unrest. Residents are worried about their safety. Resistance against gas extraction grows, adds the mayor of Pekela, Mr. Meindert Schollema (van Es, 2013).

57Lindhout, S. (2013, January 28). Bij een schok met kracht 5 gaat het huis heen en weer. Volkskrant. Retrieved

PvdA party members, like Jan Vos criticize Kamp for neglecting the interests of the local residents, jeopardizing their safety in favor of economic benefits58. Queen’s Commissioner of Groningen Max van den Berg also from PvdA holds NAM responsible for the damage inflicted by gas extraction and demands a compensation of 1 billion euros59.

Local organizations also join the conversation. For instance, Groningen Bodembeweging association stresses that because of the earthquakes the house prices have fallen, depriving the residents an ability to sell their house and leave the place. “People are scared,” stated GBB secretary Hilda Groeneveld from GBB. “As a province we feel ourselves abandoned” (van Es, 2013)60.

Also, in Mei 2013 provincial government of Groningen established a ‘Commissie Duurzame Toekomst Noord-Oost Groningen’ headed by Mr. Meijer, which became known as commissie-Meijer. Its main responsibility was to provide independent advice concerning the future of the area where gas production took place. In November 2013, in an interview with Volkskrant, the Chairman Wim Meijer has pointed out that the local residents don’t feel safe anymore. There are a lot of concern s about the future of the province. People feel neglected. They want for their voices to be heard. Because of this concerns the public support for gas extraction has significantly dropt61. As a result it has published a report advising for a long term structured measures, where NAM would be responsible for compensation of increased risk of heavier earthquakes, as well as ‘imago-schade’ that gas exploitation has caused over the period of 20 years (Onderzoeksraad voor Veiligheid, 2015: 54).

Only in January 2014 Minister Kamp has notified the House of Representatives about his intention to implement new measures to limit the risks posed by the induced earthquakes in the area by reducing the production on five locations near Loppersum up to 80 %. The decision was made after one of the investigations that the Minister launched in 2013 has reached a conclusion

58 PvdA: Kamp vergeet bewoners bij gasboringen. (2013, January 26). Volkskrant.

59 Van Es, A. (2013, February 4). Van den Bergs ‘miljard van NAM’ stuit op kritiek bij eigen PvdA. Volkskrant.

Retrieved from https://www.volkskrant.nl/archief/van-den-bergs-miljard-van-nam-stuit-op-kritiek-bij-eigen- pvda~a3387831/

60 Es, A. van. (2013, January 29). Iedereen trekt hier weg, het is niet best: Reportage Gaswinning in Groningen.

Volkskrant. Retrieved from...

61 NAM moet huizen Groningen bevingsproof maken. (2013, November 1). Volkskrant. Retrieved from

that the reduction of gas production ‘might have a favorable effect on the maximum magnitude’ (Onderzoeksraad voor Veiligheid, 2015: 72).

This accord is implemented for the period of 2014-2016. In this period new investigations must take place and then the production plan adjusted accordingly. Also the decision to provide 1.2 billion euro for ‘improvement measures,’ like strengthening/reinforcing infrastructure, as well as improving economical perspective and quality of life in the region. Local interests represented by the residents, local companies, local administration played an active role in negotiation as was suggested by commissie-Meijer.

From underreaction to overreaction

Prior to the earthquake in Huizinge the earthquake risk as such remained ‘under the radar’. Not enough attention was paid to it not only by the media, but also by the decision- makers involved. The lack of knowledge accumulated about the phenomenon limited the understanding of the nature of the induced earthquakes. However, the chain of the events triggered by the earthquake in Huizinge, investigation by SodM, its advice to the Minister, and the refusal of the latter follow the recommendations has changed the relationship between the two coalitions from cooperative to adversary. When the change in the subsystem has occurred it has caused a shift from underreacting to overreacting to new information over the earthquake risk.

In January, 2013 SodM has labeled the risk posed by earthquakes as ‘high,’ stressing that it can only be limited by reduction of gas extraction. While this strong message and advice to take action has attracted the attention to the problem and perhaps triggered the long awaited change, SodM hasn’t exactly thought through how big of an impact its message would have on the people living in the province (Onderzoeksraad voor Veiligheid, 2015: 85). As Mrs. Renier has pointed out, the statements that were made took a life of its own.

When SodM has published its report it has specified that at that point the maximum magnitude couldn’t be determined, because there was not enough information. The maximum magnitude values of 4-5 on the Richter scale that SodM has mentioned in its letter to the Minister was borrowed from a report by KNMI (Onderzoeksraad voor Veiligheid, 2015: 53). It was more of a theoretical assumption, than an accurate estimation. The maximum magnitude of 5

on the Richter scale was used by SodM to make a point that an earthquake heavier than 3.9 (the previous maximum) can occur. However, it has stuck

The media in its coverage of 2013 repeatedly refers to SodM’s report, its evaluation of the risk, but also repeatedly mentions the ‘new’ maximum magnitude value of 5 on the Richter scale, without specifying that it is not an absolute value, but a theoretical assumption. According to DSB (2015) while media has plaid an important role in attracting attention to the issue, with the way it has covered the event has only contributed to fueling fear and insecurity among the local population (p. 86).

This overreaction has plaid to the advantage of the actors trying to politicize the

earthquake risk, and in their attempt to blame the Minister for violation of crucial public values, they have only further exaggerated it.

Politicization of the earthquake risk

Several factors are used to measure politicization of the earthquake risk in Groningen: media attention, blame, violation of crucial public values, and catharsis.

Increase in media attention that was triggered by the earthquake in Huizinge, and later by the SodM’s report were first indicators that this is where the politicization has started. With Minister’s refusal to follow SodM’s advice starts the confrontation between two coalitions. Perhaps because actors representing state and industry interests are so overwhelmingly powerful, there opponents realized that the only way to push for policy change was by politicizing the earthquake risk.

Their goal was for SodM’s advice voiced in January, 2013 to be implemented. For that to happen they needed massive public support. What had already played out to their advantage was the way media has framed the issue. Media’s overreaction to new findings surrounding the severity of the risk discussed above has already started to generate resentment towards gas extraction. That has formed a base local authorities, private local organization, as well as politicians could build upon. Thus, actors representing local interests started to develop narratives that were aimed to blame the Minister of Economic Affairs and NAM. The logic of their criticism was as follows. The risk is high. The only way to limit it is by reducing gas extraction. Refusal to do so means that local interests are being ignored in favor of that of the state that jeopardizes safety of the people, which represents a violation of a crucial public value.

By framing the issue this way allowed them to rally for public support, generate resentment towards gas extraction in the province and outrage with Minister’s refusal to take ‘real’ measure to reduce the risk. In January, 2014 they have achieved their goal. The decision was made to reduce gas extraction. It wasn’t the end of the story. The measure didn’t yield the expected results (dramatic drop in frequency and magnitude of the earthquakes), so actors representing local interests felt the need to push for further reduction.

The debate about how much gas extraction can or should be decreased continues all the way to 2017. However, the point is that the decision made in January, 2014 has started the process. Around that time media attention starts to subside (See Graph 5). That became a clue that the goal the politicization of the earthquake risk was used to achieve was reached. That’s why the decision to reduce gas extraction for the first time in 2014 is seen as catharsis.

There is one nuance related to media attention. As is visible from the Graph 5 there is a difference in media attention between the regional and two national newspapers. If for

Volkskrant and NRC subsides already in 2014, for DvhN the attention keeps rising, and reaches its peak in 2015 (See Graph 5). Media analysis of DvhN coverage of the period from February, 2014 up till January, 2017 shows that, in fact, the attention has shifted away from the risk, making damage inflicted by the earthquakes and financial compensations central topics. That’s why it doesn’t contradict the conclusions reached about politicization and its catharsis outlined above.

Role of experts and Use of knowledge in an adversary subsystem Role of experts

Table 23

Expert-based information and role of scientists in policy subsystem types 62

The role of scientists in an adversarial subsystem is characterized by experts serving as principal allies or opponents, and lack of analytical compatibility between experts who may disagree on theory data, and/or methods (See Table 23). So, which scientific institutions have plaid a key role in the period of the earthquake in Huizinge till January, 2014, when the Minister has decided to decrease gas production?

There is a number of institutions, like Arup, Deltares, GTS, Ecofys and few other companies that have launched investigations on behalf of the Ministry of Economic Affairs