By our editors and
Money has always played the leading role in the Groningen gas extraction dossier. That became clear again this week during the hearings of the parliamentary committee of inquiry in The Hague. For decades, oil companies Shell and ExxonMobil, through their subsidiary NAM, made money from the lucrative natural gas under the Groningen clay. Even after major earthquakes disrupted the region from 2012, the oil companies wanted to ‘maximize’ production from the Groningen gas field. Gas was also an important source of income for the State. The administrators of The Hague found it difficult to part with it.
Safety arguments alone were not enough to turn off the gas tap. It was the high costs of repairing and strengthening houses that were the deciding factor. Both the State and the oil companies wanted to reduce these rising costs as much as possible.
After the earthquake of Zeerijp in 2018, with a magnitude of 3.4, one of the strongest in the region, the State Supervision of Mines recommended for the first time that gas extraction should stop in the future “because of the safety of the people of Groningen”. That was “a game changer,” said top official Sandor Gaastra of the Ministry of Economic Affairs and Climate during his interrogation this week.
But that security argument was not enough to convince the entire Council of Ministers, the committee of inquiry concluded from emails between Gaastra and his then minister Eric Wiebes (VVD). The minister needed financial arguments to convince his colleagues, because stopping gas production meant that they would have to make cutbacks.
NRC previously revealed that the Rutte III cabinet only wanted to agree to turning off the gas tap if far fewer houses in Groningen were to be reinforced.
Also read: How Wiebes lost the confidence of the Groningers
On March 29, 2018, the time had come. The cabinet took the historic decision to stop gas extraction in Groningen before 2030. During the interrogations this week, it appeared that Shell and ExxonMobil – both 50 percent shareholders of NAM – reacted very differently to this.
Shell Nederland, in the person of president-director Marjan van Loon, radiated compassion for the region. She expressed regret for what has been done to the Groningers. To many people’s surprise, she stated that Shell was the first to come up with the idea of phasing out gas production completely. “We have actively put the route to zero on the table ourselves.” Shell did not make this proposal completely selflessly. The company was concerned about the liability of subsidiary NAM. The Public Prosecution Service investigated the gas company: had the gas extraction put the lives of residents at risk?
Shell wanted to get rid of its responsibility for gas extraction. From then on, the government had to determine whether gas would still be extracted, and if so how much. “We have said: everything is negotiable, but you have to make that decision.”
crown jewel
Van Loon swore to the committee of inquiry that Shell has now completely abandoned its desire to earn money from Groningen. Regaining the lost ‘social support in Groningen’ is now a priority. “It’s not about the money for us, it’s about solving the problems in Groningen.”
The committee of inquiry was skeptical. Hadn’t NAM lobbied to downsize the reinforcement operation and hadn’t Shell supported it? Yes, said Van Loon, but that was from a safety point of view, not because of the costs. Only unsafe houses had to be reinforced, then things could be done faster.
Nevertheless, it became apparent that finances still play a role in the background. Shell wants NAM to remain “financially robust” so that it can pay for the damage and reinforcement. This is important because Shell has given itself a guarantee.
For the American oil company ExxonMobil, financial motives have always been paramount. It made no secret of that. The company, headquartered in Texas, is less connected to the Netherlands than Shell. Groningen gas was the company’s “crown jewel” for many years, said former commercial director Filip Schittecatte. As long as the gas extraction did not cause ‘acutely unsafe’ situations, Exxon strived for ‘value maximization’. A visit to the earthquake zone did not change his mind. He thought it was “very unfortunate” that precious gas will remain in the ground.
A version of this article also appeared in the newspaper of October 8, 2022