The Hague: The Dutch government said on Friday it would slash gas production in Europe`s biggest field by 20 percent over three years after protests by villagers who blame the extraction for causing earthquakes.
"The earthquake problem is a problem for all the Dutch," Economics Minister Henk Kamp told a chaotic press conference in the northern village of Loppersum.
Kamp had travelled to the village, one of those worst affected by the earthquakes, to announce the cabinet`s decision and was repeatedly interrupted by protestors calling for a complete halt to gas production.
Police pushed back protesters but did not make any arrests.
Gas extraction can leave empty spaces underground, raising risks of subsidence.
Local people have demonstrated repeatedly, calling for a reduction of gas extraction after quakes damaged farms, homes and historic buildings in the area.
The relatively low magnitude earthquakes are a described as a "natural" result of huge pockets of air left underground by massive gas extraction.
They became increasingly frequent after the Netherlands more than doubled its gas production since 2000, hitting 50 billion cubic metres annually.
The five gas wells around the village of 11,000 will cut production by 80 percent over the next three years.
"We will go from 15 billion cubic metres a year to three billion cubic metres," Kamp said.
The Netherlands is Europe`s second-biggest producer and makes an annual average of 13 billion euros ($16 billion) from gas.
The northern Groningen gas field, the largest in the European Union, will have its production slashed from 50 billion cubic metres to 40 billion by the end of 2016.
The field provides the Netherlands -- the world`s 10th-biggest gas producer -- with two-thirds of its gas.
Extraction will be reduced around most-affected villages, but could be resumed if necessary.
"If there`s urgent need we need to be able to produce gas quickly," said Kamp.
The government will lose 700 million euros in revenues this year and in 2015 and one billion euros in 2016, Kamp said. The Netherlands is already struggling to save six billion euros to bring its deficit to within EU norms.
The government will also contribute 144 million euros a year over five years to an earthquake compensation fund.
The 1.2-billion euro fund is co-financed by Shell and Exxon which are in charge of gas production.