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How did Dutch politicians Squander Billions on Natural Gas?

by on February 10, 2013

In 1959 the drilling started in Slochteren natural gas field. There was some discussion on putting the money into a special fund for future investments. Yet as , Cees Banning described, Dutch politicians have since let 211 billion to go up in smoke.

Instead of investing for the future, 52 billion euros, or almost a quarter of all natural gas revenues, went into financing social security. Only 15 percent was used to improve the national infrastructure of the Netherlands, while 85 percent went to welfare benefits, interest payments on the national debt, and spending on health care, education and public administration.

Natural resources are a one time unexpected income. These windfall gains should have been invested to create a long-term income stream. Instead natural gas has created a Welfare state that the Dutch have got addicted to, but can no longer afford.

Recent Earthquakes due to natural gas extraction have created a political dilemma  Either stop the extraction and lose valuable income which many Dutch take for granted or continue extraction risking further protest from Groningen. If, however, the money was spent more wisely in the first place, there would be no complaints from people at all. They would not  worry about the structural integrity of their houses. Let alone earthquakes. They would already have been reimbursed by the fund and have Japanese houses. Additionally there would be a nice budget to cushion the current crisis.

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From → Extended Society

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