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Dutch parliament reverses burden of proof in gas damage claims

Tue, 28th Apr 2015 16:18

By Toby Sterling

AMSTERDAM, April 28 (Reuters) - The Dutch parliament onTuesday voted to reverse the burden of proof in disputes overdamages to buildings caused by the production of gas atGroningen, Europe's largest natural gas field, a potentiallyexpensive decision.

Estimates of damage to buildings in Groningen by earthquakescaused by gas production range from 6.5 billion euros ($7.1billion) to 30 billion in the coming 30 years.

Under the motion approved by parliament, the company thatoperates the Groningen field, a joint venture including Shell, Exxon and the Dutch government, would have toprovide evidence that disputed damage claims are bogus, ratherthan claimants having to show evidence they are legitimate.

It was not immediately clear how many claims the vote willaffect. Producers have promised to pay all legitimate claims andEconomic Affairs Minister Henk Kamp, who argued againstTuesday's decision, said 92 percent of claims submitted sincethe start of 2015 had been approved.

Gas production at Groningen has become increasinglycontroversial since the Dutch Safety Board found in Februarythat the government failed to adequately consider the threat tocitizens from the small earthquakes it causes.

The plan to reverse the burden of proof was proposed by theLabour party, junior member in the governing coalition led byKamp's Liberal Party. The Liberals opposed the motion butsupport from other parties ensured its passage.

The Dutch government bears 64 percent of claim costs, whilea Shell-Exxon venture called NAM funds the remainder, the sameratios they use to divide profits from production at Groningen.

Gas proceeds made up between 5 and 10 percent of the Dutchgovernment budget in 2003-2014, about two-thirds from Groningen.In 2014 state proceeds from the field were around 9.4 billioneuros.

An estimate commissioned by the province of Groningenpublished last week estimated as many as 212,500 buildings mayhave been damaged by the quakes, with costs of compensation andstrengthening buildings running as high as 30 billion euros overthe coming three decades.

An earlier government review estimated the number of housesneeding repair would be no more than 90,000, with damage costingroughly 6.5 billion euros.($1 = 0.9112 euros) (Editing by David Holmes)

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