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Dutch parliament reverses burden of proof in gas damage claims

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AMSTERDAM | BY TOBY STERLING:Tuesday 28 April 2015

Dutch parliament reverses burden of proof in gas damage claims

(Reuters) – The Dutch parliament on Tuesday voted to reverse the burden of proof in disputes over damages to buildings caused by the production of gas at Groningen, Europe’s largest natural gas field, a potentially expensive decision.

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

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

It was not immediately clear how many claims the vote will affect. Producers have promised to pay all legitimate claims and Economic Affairs Minister Henk Kamp, who argued against Tuesday’s decision, said 92 percent of claims submitted since the start of 2015 had been approved.

Gas production at Groningen has become increasingly controversial since the Dutch Safety Board found in February that the government failed to adequately consider the threat to citizens from the small earthquakes it causes.

The plan to reverse the burden of proof was proposed by the Labour party, junior member in the governing coalition led by Kamp’s Liberal Party. The Liberals opposed the motion but support from other parties ensured its passage.

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

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

An estimate commissioned by the province of Groningen published last week estimated as many as 212,500 buildings may have been damaged by the quakes, with costs of compensation and strengthening buildings running as high as 30 billion euros over the coming three decades.

An earlier government review estimated the number of houses needing repair would be no more than 90,000, with damage costing roughly 6.5 billion euros.

($1 = 0.9112 euros)

(Editing by David Holmes)


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