BLOOMBERG: Gas Drilling Plan in Dutch Wetland Spurs Anti-Government Outcry: “Shell, Europe's second-biggest oil company, and Exxon want to drill in the Wadden Sea to supplement their aging Groningen field.”: Friday 25 November 2005

Nov. 25 (Bloomberg) -- The Netherlands plans to let Royal Dutch Shell Plc and Exxon Mobil Corp. extract gas from Europe's largest marine wetland, sparking protests from environmentalists and lawmakers who say thousands of birds may be killed.

``The Netherlands risks losing its biggest unspoilt piece of nature,'' Diederik Samsom, a member of parliament for the main opposition Labor Party, said in an interview on Nov. 23. ``The effect for humans and animals could be disastrous.''

The Wadden Sea, a 3,800 square-mile expane of wetland off the Dutch coast, is home to seals and a transit stop for 10 million migratory birds. The United Nations marks the field as one of the world's 11 ``particularly sensitive sea areas,'' or marine areas that need protection because of their ecology.

Shell, Europe's second-biggest oil company, and Exxon want to drill in the Wadden Sea to supplement their aging Groningen field. The government estimates it may earn as much as 15 billion euros ($18 billion) in royalties and taxes from the field over 20 years.

The government last year reversed its 1999 decision to bar drilling because of ``robust economic reasons'' and plans to grant Shell, based in The Hague, and Irving, Texas-based Exxon exploitation licenses next year. The licenses will contain as yet unspecified drilling conditions.

Legal Challenge

``Gas exploitation isn't compatible with the protected status of the Wadden Sea and we want guarantees that if it starts to go wrong the companies will stop,'' Hans Revier, director of external affairs at the Wadden Sea Society said in an interview on Nov. 18. The society, based in Harlingen, was founded in 1965 to protect the region and has 45,000 members.

The Wadden Sea society will bring a legal challenge if the licenses fail to include guarantees that drilling will stop in the event of harm to the environment, Revier said. The Dutch Society for the Protection of Birds shares some of Revier's concerns.

``The worry is that if the birds can't reach their food, there are very few other alternative places,'' Hans Peters, a spokesman for the society, said in an interview on Nov. 17.

In the U.S., Republicans want to open up Alaska's Arctic National Wildlife refuge, which may contain 10.4 billion barrels of oil, to reduce U.S. dependence on imports. In Norway, oil producers want the state to open more of the Barents and Norwegian seas, which are fish spawning grounds.

Shell and Exxon, through their Nederlandse Aardolie Maatschappij BV venture, estimate that the Netherlands has enough gas for about 25 years and says its annual output is about 75 percent of total gas production in the country. Their Groningen field, one the five largest gas fields when discovered in 1959 and now 60 percent dry, has 1,000 billion cubic meters of gas.

Important Reserves

``The Wadden Sea reserves are so important because they will allow us to keep Groningen as a swing producer,'' Roelof Platenkamp, chief executive of Assen, Netherlands-based NAM, said in comments provided by his spokesman on Nov. 18.

A swing producer is a gas field that supplies output periodically, as a supplement to another field. Any lawsuits would delay the plan by a year or more, he estimated.

The Netherlands uses about 60 percent of gas proceeds to repay the national debt, projected at 268 billion euros for this year, and the other 40 percent on building projects. The state expects about 7.5 billion euros from gas receipts this year.

`Big Heap of Money'

Gas for January rose to a record 115 pence a therm at the National Balancing Point on Nov. 22. That's $19.70 per million British thermal units at today's exchange rate, 65 percent more than the same-dated futures contract in New York.

``Everyone is thinking about this big, big heap of money,'' Adriaan Dijksen, who conducts nature tours on the Dutch island of Texel, in the Wadden Sea, said in an interview on Nov. 23.

The ministry of economic affairs estimates gas deposits may total 130 billion cubic meters (425 billion feet), enough to supply Amsterdam, Rotterdam, The Hague and Utrecht for 15 years.

Among the concerns of environmentalists are possible subsidence in the seabed and disruption of local tides.

Gas exploitation ``will be done with a hand on the tap, so if something happens to the seabed, we will stop it,'' Pieter Bijman, the vice-governor of the province of Friesland, of which the Wadden Sea coast is a part, said in an interview on Nov. 17.

To contact the reporter on this story:

Dale Crofts in Amsterdam at dcrofts@bloomberg.net 

Click here for ShellNews.net HOME PAGE