January 5, 2017 / 2:57 PM / 3 years ago

UPDATE 1-Dutch court upholds Groningen gas output cap meant to ease quake risk

(Updates with details, background)

AMSTERDAM, Jan 5 (Reuters) - A Dutch court on Thursday upheld a government decision to cap production at the offshore Groningen gas field, a step aimed at easing the risk of earthquakes triggered by drawing gas from Europe’s biggest field.

The court was responding to requests for a preliminary injunction against the June decision to cap annual output at 24 billion cubic metres (bcm) until Oct. 1, 2021. Critics had sought a deeper cut or halt to production.

Output has been cut several times from 53.9 bcm in 2013 as criticism mounted that Dutch authorities had failed to adequately assess the risk to citizens from earthquakes caused by production.

The government was formally censured by the country’s Safety Board after a magnitude 3.6 quake hit the town of Huizinge in 2012 - larger than had been deemed possible by NAM, the Shell-Exxon joint venture that oversees production.

Small quakes remain frequent in Groningen, and while no physical injuries have been reported, buildings across the region have suffered billions of euros in damage because they were never designed to withstand tremors.

The Council of State, the court which allows challenges to government decisions, said it saw no reason to alter the decision ahead of a broader case against Groningen gas field production it will consider this spring.

Last year’s decision capped production at 24 bcm, down from a previous maximum of 27 bcm. It includes the possibility to expand output back up to 30 bcm if unusually cold weather were to jeopardise supplies for households in the Netherlands, Germany and Belgium that depend on Groningen gas for warmth.

At the request of the Dutch parliament, the cap is subject to annual review by the government in case technical or other developments make it possible to reduce production more quickly.

Economic Affairs Minister Henk Kamp has said that production at Groningen is expected to continue winding down as the Netherlands seeks to reduce carbon dioxide emissions and its dependency on fossil fuels.

Germany has said it intends to speed up weaning households off natural gas, and Kamp last month announced plans to ban gas heating from all new housing projects in the Netherlands.

Reporting by Toby Sterling; editing by Mark Heinrich

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