FFI Perspectives

The Stranding Begins, in the Netherlands

The Groningen field, a 350-square-mile natural gas field in northern Netherlands, has its output cut by 20% by the Dutch government. According to this New York Times article, the field, which accounts for one third of the natural gas produced in the EU, is causing earthquakes of increasing intensity as the gas is extracted. The field is operated by a joint venture between ExxonMobil and Royal Dutch Shell, the fourth- and eighth-ranked companies, respectively, in the Carbon Underground 200.

The 20% production cut is part of the Dutch government’s three-year pilot program to curtail damage caused by continued extraction. If a permanent plan is adopted, it may well force ExxonMobil and Royal Dutch Shell to leave the fossil fuel in the ground, stranding the assets. 20% of output is estimated to be about $270 million per year of field’s earnings split between the two companies. Local community organizations would like to see the production cap doubled.

The Groningen field has been producing natural gas since 1959.

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