Dutch Court Demands New Groningen Decision (Adds NAM Remarks)
A new decision is required on how much gas may be produced from the NAM-operated giant Groningen gas field, the Netherlands highest commercial court ruled November 15.
Production will remain at 21.6bn m3/yr until the relevant minister takes that decision, the court added.
The minister of economic affairs and climate “failed to properly substantiate his previous decision to allow 21.6bn m3 to be extracted per gas year over the next five years,” according to the ruling by the administrative jurisdiction division of the Council of State (Raad van State).
That refers to a May 2017 decision by then economy minister Henk Kamp that 10% be shaved off the annual cap of 24bn m3/yr previously set from October 2016 until September 2021. Eric Wiebes replaced Kamp as minister of economic affairs and climate in the new coalition government last month.
The November 15 ruling says that Kamp’s reasoning should have explained more clearly the risk for people of earthquakes. “Neither has he adequately explained why security of supply has been taken as the lower limit for the volume of gas to be extracted, despite uncertainty about the consequences. Furthermore, he has failed to make clear potential measures to limit the demand for gas. The minister is granted a year to reach a new, better substantiated decision,” said a statement from the court.
Although the court set aside both Kamp’s September 2016 decision (setting 24bn m3/yr as a cap for five years) and his amendment (reducing that to 21.6bn m3/yr), it decided against allowing unlimited production by NAM as that would leave objectors in an even worse position - something the court said would have been "unacceptable."
Around 20 objectors appealed against both Kamp’s decisions, including local activist group Groninger Bodem Beweging (GBB), individual citizens, the Groningen provincial executive, and various municipalities in the Groningen province of northern Netherlands.
So the court has set an 'interim provision' as a temporary measure, enabling NAM to produce in line with the most recent amendment decision, namely at 21.6bn m3/yr, and said this “will remain in force until the minister's new gas extraction decision comes into effect."
A spokesman for the Economic Affairs and Climate ministry told NGW: "It is a firm decision. We are still studying it further. But the main conclusion is clear: within a year a new decision has to be taken. That's what we start working on."
The giant Groningen field is operated by NAM which has a 60% equity interest, while Dutch state petroleum holding EBN holds the other 40% interest.
The Dutch government has for several years now admitted that quakes in the area are induced by gas production. GBB has been active for at least six years in seeking compensation for buildings damaged by subsidence caused by gas production, and campaigning for a reduction or even halt to production from the field.
A jubilant GBB noted on its Twitter site that the ruling had "annulled Kamp's gas recovery decision" and had thrown wide open the debate about energy security of supply.
NAM though said it felt justified by the Council of State's ruling that it is possible to estimate the risks associated with gas extraction based on calculation models: "The ruling also indicates that there is insufficient motivation about why the previously established safety framework has been abandoned. We have not taken the step of appealing against a ministerial decision about production before in our 70-year history. The reason was to get clarity.... Gas production from the Groningen gas field requires clear frameworks that justify the importance of safety."
Mark Smedley