Friday 21 February 2020

Groningen gas production to be scaled back, costing state €3.5bn

Ministers on Friday reached agreement on a sharp cutting back in natural gas extraction from below Groningen province, following mounting concern about the risk of earthquakes.

In the area around the village of Loppersum, one of the worst affected areas, gas production will be slashed by 80% for the next three years.

Total production, which reached almost 53 billion cubic metres last year, will be cut back around 20% to 42.5 billion cubic metres this year and in 2015, and reduced again to 40 billion cubic metres in 2016.

This will cost the treasury €2.3bn in lost income over the three-year period, economic affairs minister Henk Kamp said in a briefing for MPs. In addition, ministers have earmarked an extra €1.2bn for Groningen province to strengthen buildings and the infrastructure.

Kamp travelled to Loppersum to outline the decision to locals on Friday afternoon after the cabinet meeting.

Risk

Locals are up in arms about the gas extraction and there have been several demonstrations in recent days.

Prime minister Mark Rutte said at his weekly news conference on Friday the earthquakes had caused emotional as well as material damage. ‘I do understand that people are uneasy,’ he said.

In November, the local cultural heritage service said the earthquakes had damaged 69 out of the 100 listed buildings in the northern part of the province.

Compensation

Gas and oil group NAM said last year it will take steps to prevent damage to vulnerable buildings and is looking at ways to extract gas with less far-reaching effects. It describes the risks as ‘acceptable and manageable’.

NAM received at least 12,000 reports of damage to homes in the region in 2012 and 2013, Kamp said on Friday.

NAM, owned 50/50 by Shell and ExxonMobil, produces 75% of all gas extracted on Dutch territory and around half the oil.

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