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UPDATE 1-Dutch court upholds Groningen gas output cap meant to ease quake risk

Thu, 05th Jan 2017 14:53

(Updates with details, background)

AMSTERDAM, Jan 5 (Reuters) - A Dutch court on Thursdayupheld a government decision to cap production at the offshoreGroningen gas field, a step aimed at easing the risk ofearthquakes triggered by drawing gas from Europe's biggestfield.

The court was responding to requests for a preliminaryinjunction against the June decision to cap annual output at 24billion cubic metres (bcm) until Oct. 1, 2021. Critics hadsought a deeper cut or halt to production.

Output has been cut several times from 53.9 bcm in 2013 ascriticism mounted that Dutch authorities had failed toadequately assess the risk to citizens from earthquakes causedby production.

The government was formally censured by the country's SafetyBoard after a magnitude 3.6 quake hit the town of Huizinge in2012 - larger than had been deemed possible by NAM, theShell-Exxon joint venture that oversees production.

Small quakes remain frequent in Groningen, and while nophysical injuries have been reported, buildings across theregion have suffered billions of euros in damage because theywere never designed to withstand tremors.

The Council of State, the court which allows challenges togovernment decisions, said it saw no reason to alter thedecision ahead of a broader case against Groningen gas fieldproduction it will consider this spring.

Last year's decision capped production at 24 bcm, down froma previous maximum of 27 bcm. It includes the possibility toexpand output back up to 30 bcm if unusually cold weather wereto jeopardise supplies for households in the Netherlands,Germany and Belgium that depend on Groningen gas for warmth.

At the request of the Dutch parliament, the cap is subjectto annual review by the government in case technical or otherdevelopments make it possible to reduce production more quickly.

Economic Affairs Minister Henk Kamp has said that productionat Groningen is expected to continue winding down as theNetherlands seeks to reduce carbon dioxide emissions and its dependency on fossil fuels.

Germany has said it intends to speed up weaning householdsoff natural gas, and Kamp last month announced plans to ban gasheating from all new housing projects in the Netherlands.

(Reporting by Toby Sterling; editing by Mark Heinrich)

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