DECOMISSIONING

Decommissioning North Sea platforms: should we let sleeping giants lie?

With massive decommissioning costs on the horizon in the UK North Sea, University of Aberdeen academic Tom Baxter has argued that there is no reason to completely remove offshore oil platforms. Given the costs involved, Chris Lo asks whether it would make sense to leave some decommissioned assets in the sea.

For the UK, the prospect of offshore decommissioning in the North Sea has become something of an ominous cloud on the horizon. As the UK Continental Shelf (UKCS) continues to mature, growing numbers of the roughly 470 oil installations, 10,000km of pipeline and 5,000 wells are approaching the end of their productive lives.

Under the Convention for the Protection of the Marine Environment of the North-East Atlantic (the OSPAR Convention), these assets will need to be dismantled and removed from their production sites for onshore disposal or repurposing. The cost and complexity of carrying out this work is one of the oil and gas industry’s largest ongoing challenges.

“It’s a massive engineering task,” says Professor Tom Baxter, senior lecturer in chemical engineering at the University of Aberdeen.

And in the UK, it’s not just the private sector that’s on the hook. Under the country’s offshore tax framework, the Treasury allows companies to reclaim taxes paid in previous years to help cover decommissioning costs. A Wood Mackenzie analysis found that UK taxpayers will likely fund around £24bn of the £53bn expected to be spent by the industry on decommissioning in the coming decades, raising concerns that as production continues to decline, the decommissioning bill could lead to the North Sea becoming a drain on public finances, rather than a contributor.

Current international rules – enforced in the UK by the Petroleum Act 1998 – broadly require the complete removal of offshore assets, with some scope for exemptions for infrastructure that may prove dangerous to remove. Given the massive costs that are still to come and the fact that an estimated 90% of offshore installations are set for complete removal from the sea, there is an obvious question: is this the right way to go about making the UK’s retired offshore infrastructure safe?

“The mantra we use is that the polluter pays – well, the polluter isn’t paying, it’s the taxpayer.”

Is there an alternative to full removal of North Sea platforms?

Total removal isn’t the only decommissioning method in use; on the US Gulf Coast, hundreds of disused oil platforms have been brought into shallow water and used as artificial reefs, which can support an array of marine life.

For several years, Baxter and some other academics have argued that a similar idea to these ‘rigs-to-reefs’ schemes could be replicated in the UK North Sea, with one major change – instead of being brought into shallower waters, the offshore infrastructure would be made safe and simply left where it lies.

“My proposal is to make it clean and safe, and then leave it,” says Baxter. “In the States, they move the reefs to shallow water. I’m not proposing to do that – it would cost you just about as much to do that as to actually take it ashore. So I’m looking at the big saving, which is to leave the infrastructure out there.”

Baxter argues that this plan would significantly reduce costs to UK public finances. Plugging and abandoning work on any wells, which represents around half of the total cost of decommissioning, would still be essential. Could a significant chunk of the other half in savings be better spent elsewhere?

“The mantra we use is that the polluter pays – well, the polluter isn’t paying, it’s the taxpayer,” Baxter says. “And as a taxpayer, I want to know what value I’m getting for this. We can do much more for the environment by suddenly commuting those saved costs over to green energy. What does a clean seabed offer UK plc? What does it offer society? Green energy is giving you jobs for life. Decommissioning jobs are dead – once the task is complete, there is no follow-on activity. You haven’t created something that will serve society for years to come, or built a factory or a bridge.”

“the tenor I’m picking up is there’s no real positive [to decommissioning] but there could be a negative in the disruption to the seabed.”

Protecting the environment: the pros and cons of full decommissioning

The potential for billions in public savings makes for an enticing prospect, but clearly the industry’s – and society’s – responsibility to minimise harm to the marine environment is a primary consideration. Many environmental groups scorn any suggestion of an alternative to full removal.

“The rules already allow for companies to seek permission to leave some material behind, where moving it would result in unacceptable risk to staff or the environment and we support that principle,” said WWF head of UK and EU marine policy Lyndsey Dodds in January. “Given the very generous tax breaks and incentives the oil industry has received over the years, the idea that it might be allowed to wriggle out of its internationally agreed obligations to clean up its mess is unacceptable.”

But with the knowledge that colonies of marine life can build up around subsea structures – often protected by the fishing exclusion zones that surround oil platforms – is there an environmental as well as a financial case to be made for leaving steel in the sea?

“At one time I had a group of about 20 environmentalists work for me, and the tenor I’m picking up is there’s no real positive [to decommissioning] but there could be a negative in the disruption to the seabed,” Baxter says. “No one that I know has said that steel in water is a problem. Dirty steel or other components perhaps, but just steel? And that’s 95% of what’s out there. All I’ve been repeatedly asking for is the government to tell us what the environmental motivation for removal is. Because no environmental scientist can give me one, other than paraphrasing that we follow legislation.”

Responding to a question about the environmental case for the removal of decommissioned offshore infrastructure, the Department of Business, Energy & Industrial Strategy (BEIS) sent this response: “Offshore oil and gas operators must decommission installations and pipelines at the end of a field’s economic life. This is done in accordance with UK and international obligations and is delivered in a safe, efficient and cost-effective manner for tax payers, while minimising the risk to the environment and other users of the sea.”

BEIS added that it works with industry to find flexible decommissioning solutions, and that it is only fair for those that have profited from hydrocarbons production to meet the cost of decommissioning.

“Certainly more data on the potential long-term effects of offshore infrastructure on the North Sea’s ecosystem is needed.”

Addressing the need for more data and discussion

Baxter argues that there needs to be a broader discussion, and much more data, to inform decision-makers on the best way to proceed with decommissioning the UK’s offshore infrastructure.

This debate is nothing new: Shell sparked outrage when it proposed to leave the Brent Spar oil storage buoy in Atlantic waters in 1995, prompting an energetic campaign from Greenpeace and a hasty climb-down from the company. This set the tone for a full removal study, which later came in the form of OSPAR Decision 98/3, which mandates full removal wherever possible.

“It was a bit of a knee-jerk,” Baxter argues. “I guess people have been frightened to challenge it, because it would be seen as looking to pollute the sea. I’ve been accused of talking about just dumping – I’m not talking about dumping anything, we’d be leaving something there that’s been there for the last three decades.”

But even in the aftermath of the Brent Spar controversy, scientists were highlighting the potential for better environmental outcomes by not removing. Biologists brought in to advise on the disposal of Brent Spar after it was decommissioned discovered large colonies of healthy coral on the structure, including endangered species.

“In certain circumstances, it may be more sensible to leave the footings of large structures in place,” said marine biologist Niall Bell in 1999. “Such an option would preserve existing colonies and might allow Lophelia to spread in the North Sea.”

At the time, Greenpeace campaigner Simon Reddy responded to the suggestion in strong terms. “If I was to dump a car in a wood, moss would grow on it, and if I was lucky a bird may even nest in it,” he argued. “But this is not justification to fill our forests with disused cars.”

But if subsea assets could potentially be left in place, at no cost (or even a benefit) to the environment, while saving the UK taxpayers billions to be spent elsewhere, can we afford to dismiss the idea out of hand? Certainly more data on the potential long-term effects of offshore infrastructure on the North Sea’s ecosystem is needed, both from industry groups such as the INSITE project, and from universities and public bodies.

“My suggestion’s biggest enemy is that it doesn’t feel right,” Baxter says. “That’s a difficult argument; it’s almost counter-intuitive. So you have to bring the evidence to show to society, to show to the NGOs, that actually leaving in place is better for the environment, for society, and for the economy. But I think it’s absolutely essential that this conversation is had. When there’s fiscal austerity and it looks as if we’re going to spend £25bn unnecessarily, that to me just seems wrong.”