Decommissioning: The Inconvenient Truth

A FEW weeks ago I called on authorities to leave UK offshore oil assets in place – after making them safe and clean – and received two days of TV, radio and newspaper coverage.

The argument is a simple one: we can spend billions in taxpayers’ money to decommission these assets, creating in turn a number of short-term jobs – or we can invest that same money in funding clean energy projects that  support long-term jobs up and down the supply chain.

While the responses I received were overwhelmingly supportive, there were detractors who, I’m disappointed to report, stooped to making petty and ill-informed jabs rather than engaging in a constructive discussion.

First-hand experience

To put my views in context, I was technical director of an oil and gas consultancy for almost 20 years. I oversaw company growth from 30 to 350 personnel. I established a decommissioning group and also had a large environmental sciences group.

The company won a contract to determine decommissioning costs for the UK. In parallel the environment group were undertaking environmental impact assessments for decommissioning projects.

I saw the huge decommissioning bill, the uncertainty in the cost estimates and, in particular, the role of the taxpayer. When I discussed the environmental motivation for removal, no one could provide a compelling case – we remove because legislation says so. I formed the view many years ago that the taxpayer was being short changed.

Throughout my career I kept my views to myself. The company was receiving a significant amount of decom work from very supportive clients so why should I mouth off? As a business man, I would be shooting myself in the foot. I only started to express my views as a taxpayer after I retired, when criticism could be leveled at me and not the company.

Ridiculous comment

The most hurtful comment I received after the media exposure was from the chair of the Oil Industry Finance Association (incidentally an organisation and position I could find very little recent information on). He branded me as “ridiculous” and “beggaring belief”. The basis for his swipe was “you wouldn’t do this on land”.

I’d like to ask him to give me a parallel on land which has the same tax framework, economic, environmental and societal impact as offshore decommissioning.

Some critics said I was an academic with no idea of the real world. My CV says something else.

They also said I was recycling old ideas. I agree that I’m not the first to suggest leaving architecture in place but show me someone who has proposed using the savings made to boost clean energy?

Others said you can’t throw away agreed international and national laws. Of course you can’t and I have never suggested that. What I have asked for is a comparative sustainability assessment to provide the evidence to challenge laws that I believe do not serve the nation.

“Leaving in situ will be a hazard to shipping”, said some. It is not a new hazard, most of the architecture has been in place for decades.

“Decommissioning provides hundreds of jobs”, said others.

Yes it does but not across all the ports vying for onshore dismantling and recycling. Furthermore, the jobs are short term; there are not long-term jobs following a decommissioning project. With green energy, the jobs created would be long-term.

Listen to reason

NGOs have criticised me with the mantra “the polluter pays”. If the polluter did pay I would have no case. But it is the taxpayer who pays most, and that includes the people barracking me from within these NGOs.

Environmental groups including the WWF and Greenpeace, have consistently said oil and gas companies should clean up after themselves – a point of principle. On the face of it, this seems a perfectly reasonable position. Clearing up redundant industry architecture and equipment must be the starting point of any societal, environment and economic assessment.

Therefore, reaching the conclusion that the correct solution is to leave this architecture in place would require a special set of circumstances. I contend that those special circumstances present themselves in the case of decommissioning offshore oil and gas assets.

But the money saved would have to be invested in green energy projects. Simply leaving the assets in place and pocketing the savings would be a travesty. It would result in the outrage that industry experienced with Brent Spar. Unlike Brent Spar, the green energy alternative offers WWF, Greenpeace and others a much better option for the environment.

But will NGOs accept that? The Scottish Wildlife Trust has – but are the others willing to widen their narrow view and support a decision that promises longer-term benefits? (http://bit.ly/2BDEBqU)

None of the points indirectly or directly made to me have changed my resolve. The taxpayer is being poorly served by the current decommissioning plans. I ask the UK government again to demonstrate to the taxpayer that, in these days of fiscal austerity, that the current decommissioning plans are good for society, the environment and the economy.

Since I’ve repeatedly asked for this in the past I have little hope of receiving a government response that addresses my points. Reacting to my proposal, a government spokesperson told the BBC:

“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 taxpayers, while minimising the risk to the environment and other users of the sea.”

This response assumes that the international obligations are serving the UK’s taxpayers.

Why doesn’t the government show the taxpayer the environmental benefit of removal? I suggest it can’t and that I’m exposing a very inconvenient truth.