An urgent request: new decommissioning head must bring fresh-thinking to wrong-headed plans

THE appointment this week of a new head of decommissioning at the UK’s Oil & Gas Authority (OGA) raises hope that a fresh pair of eyes might take a different view on current decommissioning plans, which to my mind are entirely wrong-headed. 

If the new chief – Nils Cohrs – reflects on the benefits to society, the economy and the environment then he should draw the same conclusion that I have: the existing plans are a huge misuse of taxpayers’ money. 

Whilst no one can dispute the requirement to properly plug and abandon wells, asset removal is another issue entirely. I urge Mr Cohrs to put OSPAR removal legislation to one side and assess the implications of the industry’s decommissioning plans bearing in mind that the taxpayer is the largest stakeholder. 

Mr Cohrs please consider this:

Who pays?

The following is a quote from Shell’s website: “Shell and Esso will be paying the decommissioning costs…The tax relief we will get back is not a subsidy or a new cost to the taxpayer – it’s a refund – ie the tax has already been paid by Shell and Esso in previous years.”

This, however, is spin. If decommissioning costs reach  the £60bn (US$78.9bn) that has been estimated, then the treasury (the taxpayer) will be down by around £30bn. If the costs are higher, the treasury will pay more – a huge risk to the taxpayer. The taxpayer does pay.

There is an environmental benefit from removal

There is no environmental benefit from removal. Indeed some of the decommissioning activities will, through seabed disruption, do more environmental harm than good. If the architecture is left in place, it will naturally continue to form a reef providing an environmental positive. Furthermore, removal is a highly energy intensive process resulting in harmful carbon dioxide and other emissions.

The most pressing environmental issue of our time is global warming. If our aim from removal is environmental benefit, surely making the offshore infrastructure clean and safe and using the taxpayers’ money, earmarked for removal, to fund green energy projects would be a much more sensible option.