Dutch court hearing pits Big Oil against Groningen locals

THE HAGUE (Reuters) - Angry Dutch residents living near the huge Groningen gas field demanded a total halt to production, accusing oil companies of causing house-damaging earth tremors and the government of lying at a hearing in the Netherlands’ highest court on Thursday.

Two days of proceedings at the Council of State is considering appeals against a government plan to curb production at the massive field by an additional 10 percent from Oct. 1.

Residents want extraction at the field, which once supplied 10 percent of the European Union’s gas needs, to be stopped altogether due to minor earthquakes that have damaged thousands of homes and buildings.

Gas production company NAM, a joint venture between oil majors Royal Dutch Shell and Exxon Mobil, has accepted responsibility for damage caused by the quakes, for which it is paying more than 1 billion euros ($1.14 billion).

However, opponents accused NAM and the Dutch Ministry of Economic Affairs, which sets production levels, of underestimating the dangers.

“We have consistently been lied to,” lawyer Nette Kruzenga, representing a group of Groningen residents, told the court. “The NAM is only interested in maximizing production, and the government is ignoring its task to protect people.”

The Dutch government has lowered production at Groningen several times over the past three years due to small earthquakes triggered by gas extraction. The latest cap, announced in May, would lower output to 21.6 billion cubic metres (bcm) per year, down from 53.9 bcm in 2013.

NAM said it was appealing against the cut because the decision ignored earlier agreed safety norms. The 50-50 Exxon-Shell joint venture has said it had been put in an impossible position having been told it could continue production, vital to supply millions of Dutch homes with gas for heating and cooking, but without guarantees it is meeting safety standards.

“We are on the same side as others in this case,” NAM Director Gerald Schotman said in court. “This may seem contradictory, but we have a common interest: clarity about safety.”

The Ministry of Economic Affairs said production in Groningen was necessary for the gas supply in the Netherlands and parts of Germany, Belgium and France and that the earlier cuts had already diminished risks.

But a relatively large number of light tremors last winter prompted more cuts.

“This decision was carefully prepared and well motivated,” government lawyer Hans Besselink said. “It does justice to all parties involved.”

It could take several months for a decision to be announced.