Shell’s Shocking Share of the Groningen Earthquake Costs
By a Regular Contributor
The Dutch government does not seem to be very pleased with Shell: it’s action to reverse the burden of proof in Groningen cases seems to imply that Shell cannot be trusted…
For each of the 250,000 potential claimants to take Shell to court individually and give Shell the opportunity to drag things out, produce dubious experts, and essentially bankrupt everyone before they can obtain redress would also create a legal nightmare (out of which Shell would probably emerge essentially unscathed)
You can imagine the scenario, when a plaintiff sues because his house has fallen down, and Shell produces experts to say that the house was badly built, or was still habitable, or that no earthquake had occurred under the building in question…
Each plaintiff would need to find enough money (probably more than the repairs for which he has already paid) to fund his legal bills.
As soon as Shell won a case, they would use the successful case to justify refusing all the others… A bit like the Monty Python parrot sketch (Norwegian Blue)
Having said that, when NAM has been involved in accidents in the past, they have actually paid out very quickly. A leak of poisonous gas (H2S) once wiped out a herd of cattle but the farmer’s silence was assured when he accepted an immediate and generous payout. If any humans had been downwind of the leak, they would also have been killed, but fortunately there were none.
One comparison which should be made is the costs to Shell and Exxon of subsidence and earthquakes in Groningen and the well documented costs of BP’s Macondo blowout. Both involve sums estimated at about $40 billion. BP has emerged from Macondo chastened and much reduced in size. When combined with their other recent financial debacles, Shell’s share of the Groningen costs will result in a similar total exposure.