(Adds reaction from government, companies)
By Anthony Deutsch
AMSTERDAM, Feb 18 (Reuters) - Royal Dutch Shell,Exxon Mobil Corp and the Dutch government ignored thedanger of earthquakes caused by gas extraction at the massiveGroningen gas field for decades, the Dutch Safety Board said onWednesday.
Its critical report is one of several recommendations to thegovernment of Liberal Party Prime Minister Mark Rutte in comingmonths about production levels at the Groningen field. The issuehas become a political flashpoint ahead of local elections.
The correlation between gas extraction and earthquakes wasclear in 1993, but "the risks to residents were not recognised"until 2013, the report said.
The board's year-long inquiry concluded that the EconomyMinistry, State Supervision of Mines and NAM, the Shell-ExxonMobil joint venture which operates the gas field, workedcollectively to maximise production.
"The parties concerned considered the safety risk to thepopulation to be negligible and thus disregarded theuncertainties surrounding this risk assessment," it said. They"failed to act with due care for citizen safety in Groningen."
The Dutch government has ordered production to be reducedfrom the field, the largest in the European Union, to 16.5billion cubic metres (bcm) in the first half of 2015. It isconsidering permanently cutting output to below a cap of 39.4bcm for 2015.
Economy Minister Henk Kamp said on Wednesday alternativemethods of extraction were being studied with the aim ofreducing earthquakes.
Production could be as low as an annual 35 bcm if studiesindicate that a higher level is unsafe and if the Netherlandscan still fill delivery contracts, he has said.
Opposition parties, which are expected to strip control ofthe Senate from Rutte's ruling coalition after March 18elections, have pushed for an annual cap of 30 bcm.
NAM said it would increase safety by funding constructionimprovements at 8,000 houses and inspecting another 15,000homes. It will also launch an independent inquiry.
"The uncertainty about earthquakes is larger than wasassumed in the past," NAM head Gerald Schotman said in astatement. "We understand the residents' feelings of anxiety andinsecurity."
Gas extraction has resulted in increasingly strong earthtremors, some measuring as much as 3.6 on the Richter scale.
The cost of damage repairs, structural improvements tobuildings, and compensation for home value decreases has beenestimated at 6.5 billion euros. Around 35,000 homes are said tobe affected, parliament heard last week.
Dutch gas exports in 2012 totalled nearly 57.3 bcm, oraround 12 percent of Europe's gas demand, about 75 percent of itfrom the Groningen field.
The field is operated by government-owned Gasunie and outputjointly exploited by the government, Royal Dutch Shell and ExxonMobil through NAM (Nederlandse Aardolie Maatschappij).
Trader GasTerra said it will have to buy gas on the openmarket to meet contractual obligations following the orderedproduction cut at Groningen. (Editing by David Evans)
