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Oil Rig Decommissioning And The Environment: The Next Challenge

The pattern of reuse and recycle is one we’re well accustomed to now – manufacturers of everything from plastic packaging to television sets have had to speedily develop solutions to ensure that end of life disposal has minimal impact on the environment. But, it’s only in more recent years that we’re beginning to consider the same situation for oil rigs, gas platforms and associated infrastructures.

The offshore oil and gas sector really took off some 50 years ago and as a consequence there are literally thousands of huge bulky structures – including offshore rigs, platforms and pipelines - that are now nearing the end of their current useful life. But, while they were quick to be developed and installed, little consideration was given to their removal. Certainly the associated costs – which Oil and Gas UK predicts could run to £1.5bn a year over the next decade – were not factored in and even less so the environmental impact of removing them.

As of January 2018, the North Sea was home to 184 offshore rigs, while the Golf of Mexico had 175 and the Persian Gulf housed 159. And the biggest oil rigs can dwarf even the tallest skyscrapers – their feet may extend hundreds of feet to the bottom of the seabed, and be supporting multiple platforms full of technical equipment and accommodation for workers. One of the biggest rigs in the world – Berkut - is located off the Russian Pacific coast and is a massive 200,00 tonnes, while the deepest – Stones – sits 9,500 feet underwater.

With figures like this you can begin to understand the scale of the problem when it comes to dismantling these vast structures – and more importantly how you can do it with the environment at the heart of the operation.

The Legislation

According to the Offshore Decommissioning Study Report from IHS Market, in 2015, $2.4billion was spent on decommissioning – but by 2040 the yearly spend it expected to be $13billion, an increase of 540%. These figures highlight just how much for a problem we could be facing in the disposal of an anticipated 2,000 offshore assets between 2021 and 2040.

At present there is no overarching, worldwide consensus on how best to deal with decommissioning. That’s not to say though that gas companies are left to make their own decisions on how to manage the process. The Convention for the Protection of the Marine Environment of the North-East Atlantic (OSPAR) provides guidance for 15 governments and the EU to operate within. It demands that offshore structures are removed and returned to land for recycling or disposal. It does however allow some room for discussion – if a structure is environmentally dangerous to move for example – though the burden is always on the oil industry to prove their case with hard data.

Lessons Learned From The Brent Spar Platform

Back in 1995 gas company Shell no longer needed its Brent Spar platform, a 14,500 tonne platform operating as both an oil storage and tanker loading buoy. It decided the best way to dispose of it was to tow it 160miles west of Scotland and to dump it. In a move that would be unheard of in today’s environmentally focused society the then-Government accepted the proposal. Greenpeace – who already had a long-term campaign against ocean dumping – swiftly took action. Activists occupied the structure for three weeks and a high-profile boycott of Shell service stations was organised, before the oil giant eventually reversed its decision.

Although Greenpeace had been campaigning against ocean dumping since the 1970s this was the perhaps the first time that the issue came to the attention of the general public – who stood behind Greenpeace largely in their support. This single event did much to further the way we treat the ocean and set the precedent for a more responsible approach into the decommissioning of obsolete rigs. In the mid ‘90s there were plans for a number of oil companies to dump installations into the sea – however, since the Brent Spar fiasco no structures have ever been dumped in this way. After being towed to land to be dismantled, Shell made the decision in 1998 to re-use much of the main Brent Spar structure in the construction of new harbour facilities.

Rigs To Reefs

While much of the focus is on the costs involved of decommissioning structures, there is also the issue of marine wildlife and how it is impacted by the removal of these rigs. Some believe that the removal of the rigs can be environmentally hazardous, while others believe that complete removal is the most eco-friendly option. It is expected that the act of decommissioning will come with some environmental harm – due to the disruption of the seabed, the noise involved and the removal process itself, which is energy-intensive in nature and the harmful emissions it is likely to emit.

One idea that has found favour in parts of the world is that of rigs-to-reefs – whereby old platforms are converted into artificial rigs. It turns out that many of these gigantic structures actually make for an excellent habitat beneath the waves. Research into old structures in California even found them to be the most productive habitats for marine life. In the Gulf of Mexico the practice of reefing old platforms has become routine – as of 2016, over 11 per cent of the decommissioned platforms in the US section of the Gulf were transformed into permanent reefs – with the region home to more than 500 rig reefs in total.

The EU takes a more preservationist perspective on it and says sites should be restored to their original condition. EU policy is for all decommissioned rigs to be completely removed, covered in the UK by the Petroleum Act 1998. Certainly the Offshore Petroleum Regulator for Environment and Decommissioning (Opred) says that the rigs-to-reefs concept is not right for British waters – though the principle reason is due to the cost savings not being as considerable as believed.

Some environmentalists argue that these artificial reefs are not an ideal solution though and instead that rigs should be completely removed. The Scottish Wildlife Trust argues that each case must be assessed on a case-by-case basis with consideration given to the most environmentally positive approach. It believes that should that be leaving a structure in place then any financial savings should go to a ‘marine stewardship fund’ rather than line the pockets of the oil companies. This approach would also prevent companies for taking the lazy option of leaving structures in place to avoid paying the millions required to do a full removal.

The Future Of Decommissioning

What is clear is that there needs to be more than just the option of removal or leaving it. One report concludes that there needs to be an expanded range of allowable options for the decommissioning of oil rigs in order to optimize the environmental outcomes.

The public’s appetite for environmentally-friendly options is showing no signs of abating and the sector must respond accordingly. Its next challenge is to manage the process of decommissioning in a cost-effective but eco-friendly manner – or they risk the backlash that Shell experienced in the mid ‘90s.

PwC’s report A Sea Change – the future of North Sea Oil & Gas acknowledges that for the gas industry the elephant in the room is decommissioning. Speaking to 30 senior stakeholders from the value chain the North Sea, it put forward a case for maximizing efficiency from late life assets. It also advocates aligning the process of decommissioning to the journey towards a low carbon future, in order to secure the future of the industry.

 

 

 

David Bignold's picture

Thank David for the Post!

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Matt Chester's picture
Matt Chester on Sep 20, 2019 9:23 pm GMT

Some environmentalists argue that these artificial reefs are not an ideal solution though and instead that rigs should be completely removed. The Scottish Wildlife Trust argues that each case must be assessed on a case-by-case basis with consideration given to the most environmentally positive approach. It believes that should that be leaving a structure in place then any financial savings should go to a ‘marine stewardship fund’ rather than line the pockets of the oil companies. This approach would also prevent companies for taking the lazy option of leaving structures in place to avoid paying the millions required to do a full removal.

This seems like a well-reasoned and pragmatic solution by the Scottish WIldlife Trust. Are there organizations pushing strongly against this, and if so what arguments do they use? 

David Bignold's picture
David Bignold on Oct 14, 2019 7:49 am GMT

Hello Matt, thanks for your response – appreciate the interaction. I think that on an environmental level, The Scottish Wildlife Trust has a robust argument here. The point that focuses on the ‘lining of the pockets of the oil companies’ I cannot comment on as we operate in the decommissioning of these projects for oil and gas companies – we can only guess about their cash flow.

The main counterargument centres around money and feasibility – this Guardian article gives a useful, recent, reference. It mentions how Shell believes that “removing the contentious contaminated sediment inside storage cells would “on balance” be too costly and risky”. I think until something can be done to convince these corporates that spending the money is the best option and that it is indeed possible to deconstruct and remove these rigs safely, the argument will rage on. 

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