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A court in the Netherlands has ruled that two of the world’s largest companies, Exxon-Mobil and Shell, caused earthquakes and damage to homes by drilling for natural gas.
The ruling means the two companies will have to compensate thousands of owners for a drop in property values caused by the quakes within the Groningen natural gas field.
Exxon-Mobil and Shell are part of a joint venture called NAM, and actually have acknowledged their responsibility for the quakes and the decline in values. But they have said they should only be required to compensate owners after the home is sold.
“We are going to study the considerations carefully and consider potential further steps,” NAM spokesman Martijn Verwoerd said, according to Reuters. “We recognize the concern of inhabitants and agree … that, in specific cases, falls in value may be caused by earthquakes.”
The companies have used conventional gas drilling, not fracking, although the two methods share many of the same traits.
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Up to 100,000 homes have experienced a decline in value by earthquakes caused by natural production at Groningen – the largest natural gas field in Europe, Dutch News reported. Property owners may have lost up to $1.1 billion in value. There have been more than 30,000 claims of damage to homes.
“NAM is responsible for declines in the value of real estate that lies in the area where earthquakes are caused by gas production, and that damage is eligible for compensation,” Judge Ger Vermeulen ruled.
His decision stemmed from a lawsuit that 900 homeowners and 12 housing cooperatives filed against NAM.
Natural gas has been produced at Groningen since 1959, and the Dutch government ordered production cut after public protests over quakes in 2014.
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The court’s ruling was based on a finding by a government agency called the Dutch Safety Board, which found that both companies and government regulars ignored the danger of earthquakes at Groningen.
The earthquakes caused property values to drop between 5 and 25 percent, Dutch News reported. Claims filed by the property owners could reach billions of dollars, The New York Times reported.
Exxon-Mobil and Shell could appeal the ruling to Holland’s highest court.
Earlier this year, a study by the University of Colorado, the Oklahoma Geological Laboratory and Lawrence Berkley Laboratory found that fracking is causing earthquakes in Oklahoma and other states. As fracking has multiplied in Oklahoma, so have the earthquakes. There were 567 earthquakes in Oklahoma of magnitude 3.0 or higher in 2014, compared to 209 in 2013 and 40 or less each year the previous five years. In fact, Oklahoma now has more earthquakes each year than California.
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