Dutch gov't, Shell and Exxon ignored Groningen risks for years, inquiry finds

By - Reuters

AMSTERDAM (Reuters) - The Dutch government and energy companies Shell and Exxon Mobil ignored the risks of gas production in Groningen for years, to the detriment of people living in the province, a parliamentary inquiry concluded on Friday.

Prime Minister Mark Rutte and others involved "gravely underestimated" the urgency of the problems in Groningen, said the committee set up to investigate the decades of lucrative gas extraction that caused tremors damaging thousands of houses and buildings in the region.

The massive Groningen field is operated by Shell and Exxon joint venture NAM and was one of Europe's major suppliers of natural gas for decades.

NAM and the Dutch government were set to respond to the report later on Friday.

The government and NAM have previously acknowledged the seismic risks of gas production in the region and promised to compensate victims of the tremors, but they have spent years deciding how to do so.

Groningen gas production has been cut back significantly over the past decade and will be halted in the coming year because of the threat to life and property from the resulting earth tremors. That realisation, however, came too late, the committee said.

"Gas extraction in Groningen was so successful and lucrative for the Dutch government, Shell and Exxon Mobil that they hardly took any notion of the long-term risks and the ever-clearer signs of the detrimental effects for the people in Groningen," the committee said.

"The interests of the people in Groningen were structurally ignored."

The committee estimated gas profits had delivered 363 billion euros ($383.84 billion) to the Dutch treasury since production started in the 1960s, laying the foundation for the Dutch welfare state, while Shell and Exxon's profit was about 66 billion euros.

The committee said the Dutch state and the oil companies must finally make good on their debt to the people of Groningen and that Prime Minister Rutte had failed to live up to "empty promises".

($1 = 0.9457 euros)

(Reporting by Bart Meijer; Editing by David Goodman)