A court case starts in Groningen on Monday to determine who should pay part of the costs of repairing earthquake damage in the north of the country, in the latest legal dispute between the government and the Nederlandse Aardolie Maatschappij (NAM).
According to the Telegraaf, the state could face billions of euros in extra costs because the number of claims continues to rise and the energy companies behind NAM are challenging the size of the payouts.
The ministry of economic affairs says NAM should contribute to the bill because the earthquakes and damage would not have occurred without gas extraction. NAM, jointly owned by Shell and ExxonMobil, produced gas in Groningen until the field was shut in 2024.
When the cabinet decided in 2018 to end gas extraction because of the damage caused by earthquakes, it made agreements with NAM about compensation for lost income and about the costs of repairs and reinforcement work. The state pays the costs up front and then sends the bill to NAM.
This week the court will consider whether NAM must pay almost €270 million for physical damage claims from 2020 and more than €500 million towards compensation for the fall in house prices in the gas extraction area.
More than 524,000 damage reports have now been filed in the gas extraction region, with numbers increasing sharply in recent years. In addition to physical damage to homes, residents can also claim compensation for stress and anxiety caused by the earthquakes.
NAM says the government’s current approach has led to compensation being paid for damage not linked to gas extraction and warns that the total could run into billions of euros. “This concerns very large sums which will ultimately be paid largely by the taxpayer,” a source involved in the case told the Telegraaf.
The Institute for Mining Damage Groningen (IMG), which handles compensation claims, told the paper it follows the legal framework set by the government and that higher payouts are the result of broader compensation rules introduced after the parliamentary inquiry into the handling of earthquake damage.
The scheme allows residents to claim up to €60,000 for repairs without having to prove the exact cause.
The Dutch state earned more than €360 billion from the exploitation of the Groningen gas field since extraction began in 1963.
Total revenues from the gas region amounted to €428 billion when adjusted for inflation, of which €360 billion went into the government coffers while €66 billion was split between Shell and ExxonMobil.
