Netherlands Imposes Strict Cap on Groningen Gas Field

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The Dutch government has moved to minimise the occurrence of earthquakes caused by gas production at the Groningen gas field by imposing a strict extraction quota for the next five years.

Dutch Prime Minister Mark Rutte announced that production levels will be capped at 24 billion cubic metres (bcm) per year, effectively halving the output capacity from 2012. Additional extraction of a maximum 6bcm per year will be "allowed in severe winters, and only if strictly necessary" the government stated. The quota will stay in place until 2012 but an assessment will be carried out every year.

The government is reacting to findings by the State Supervision of Mines authority which maintained that more needed to be done to protect the people from earthquakes triggered by gas exploitation at Groningen, which once supplied 10% of Europe's gas. The Assen region experienced its first tremors in 1986 and there have been more than 1,000 recorded since then, measuring up to 3.6 on the Richter scale.

Discovered in 1959, Groningen is Europe's largest natural gas field and the tenth largest in the world. In its first decade, it was producing more than 100bcm of gas a year but this has fallen steadily to around 45-50bcm in recent years.

Economy Minister Henk Kamp said: "In any decision by the government regarding the gas extraction from the Groningen field, the safety of the people of Groningen is of paramount importance. The government's approach in recent years has focused on limiting safety risks and damage for the people of Groningen to the greatest extent possible. The number of earthquakes and their severity have already decreased significantly. This decision means that we are reducing the gas extraction volume to 24 billion cubic metres: half the volume of 2012. In addition, damage settlement procedures will be improved, buildings will be reinforced and the measures taken to strengthen the region will be continued. In this way the government aims to restore confidence among the people of Groningen."

The Groningen field is operated by NAM (Assen, Netherlands), which is owned jointly by Royal Dutch Shell plc (NYSE:RDS-A) (The Hague, Netherlands) and Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas).

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