Let Sleeping Dogs Lie

Article by Tom Baxter CEng FIChemE

Shouldn't we just leave the UK’s inert oil and gas architecture in place, rather than paying a hefty price for decommissioning?

THE recent issue of the Oil and Gas Authority’s (OGA) estimated cost for UKCS (UK Continental Shelf) decommissioning is a reminder of the role of the UK taxpayer.  The National Audit Office estimates that taxpayers will contribute £24bn (US$31.1bn) to the cost of decommissioning through tax reliefs. A very significant sum. Indeed, a Department for Business, Energy & Industrial Strategy (BEIS) spokesman’s letter to me stated “taxpayers have a keen interest in ensuring that [decommissioning] is delivered in a cost-effective manner."

To prevent loss of containment it is clear that for any decommissioning option, the wells must be properly plugged and abandoned. However, as I’ve reasoned previously, if we could reduce decommissioning cost by scope reduction from not removing and leaving architecture in place the taxpayer would benefit.

So here I am, a taxpayer with a keen interest in the cost of decommissioning.  I’m suggesting we leave inert, oil and gas architecture in place and reduce removal and recycling costs. To do that we have to test the pillars of sustainability: the environment, economy and society.

Good for the environment?

Let’s look for the benefit by asking how does the removal of offshore architecture benefit the environment? There is an ever-growing marine ecologist evidence base that man-made structures in the sea are an environmental positive. A very good review of the topic, “Environmental benefits of leaving offshore infrastructure in the ocean”, by Fowler et al, appears in Frontiers in Ecology and the Environment. Man-made structures provide a hard substrate that is colonised by anemones, hydroids, bryozoans, sponges, mussels, barnacles, and soft and hard corals. They are also breeding grounds and shelter for commercially-important fish and they attract predatory marine mammals. The removal process destroys these thriving marine ecosystems that have built up over decades. Furthermore, the marine traffic used for removal is energy intensive, resulting in increased greenhouse gas emissions.

Using man-made structures as a benefit to marine ecosystems is actively used in the US, known as rigs to reefs. Closer to home, the Scottish Wildlife Trust supports investigation of rigs to reefs.

There is growing evidence that man-made structures in the sea are an environmental positive

Good for society and the economy?

How does decommissioning benefit society? We take something to bits leaving no legacy. What is the benefit of returning the North Sea to sand and silt? There is no ongoing material benefit to society as there would be if we used the treasury to support a manufacturing capability or build a bridge. Furthermore, there are few decommissioning-related jobs, particularly onshore dismantling and recycling, and there are no jobs when the task is complete. For example, the contract to dismantle the Buchan floating production facility off the coast of Shetland employed just 35 personnel. Unlike the example of a profitable manufacturing capability, with long-term employment, that would pay taxes to support our societal needs – health, education, social services – decommissioning is a treasury drain.

I’d rather see the money saved from leaving-in-place invested in projects that support climate management. Other options for the money saved would be pandemic research, UK manufacturing capability, general health and social services, tackling poverty, reskilling, law and order, sustainable fisheries and wildlife protection, to name a few.

So why are we doing it?

If, as it seems, there are few economic, environmental or societal benefits why are we removing offshore architecture? The answer is because marine legislation says so.

Decommissioning programmes are prepared taking into account the BEIS Guidance Notes, incorporating the UK’s obligations under the Oslo and Paris (OSPAR) Decision 98/3 on the Disposal of Disused Offshore Installations.

OSPAR Decision 98/3, which entered into force on 9 February 1999, prohibits the leaving, wholly or in part, of offshore architecture. It mandates that all topsides installations be returned to shore and that subsea structures weighing less than 10,000 t be completely removed. However, due to the difficulty associated with removing larger structures, those built before February 1999 can have the base of the structure exempted from the regulations.

Conflicting legislation

It is interesting to note that oil and gas related legislation is at odds with the UK’s Conservation of Offshore Marine Habitats and Species Regulations 2017 (COMH). The COMH regulations are focussed on preventing activities that could kill or injure protected marine species. The regulation states: “The Regulations also implement assessment obligations for marine industry activities other than offshore oil and gas”. However, the OSPAR regulations make no reference to protection of marine species; eventual removal of offshore architecture is mandated apart from limited exemptions. OSPAR does not allow for architecture to be left in place irrespective of any environmental damage caused by removal or presence of rare species. So in the case of a rare species on a structure, COMH would recognise their presence but OSPAR would mandate removal.

A case in point is the coldwater coral Lophelia pertusa. These corals have been recorded at depths of between 50–130 m on oil and gas structures. Coldwater coral reefs support a high diversity and abundance of associated invertebrates and fishes. The fact that OSPAR would take no recognition of their presence is simply wrong.

A poor use of the public purse

As taxpayers we should be asking the UK Government for the sustainable evidence supporting removal. To spend multiple billions, the evidence should be patently obvious – if it is, I can’t find it.

The Scottish Affairs Committee on the Future of Oil and Gas asked BEIS to review the UK’s rigs to reefs, leave-in-place position. BEIS responded:We are also planning an open dialogue with stakeholders, including other government departments, NGOs, academia and nature conservationists to gather views and evidence around proposals for rigs to reef (re-using offshore oil and gas infrastructure to create artificial reefs that minimise harm to the environment). A project is being set up to review the current evidence on the environmental advantages and disadvantages of the rigs to reef concept, establishing a common evidence base. The project is expected to take six to nine months, at which point the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) will present the recommendations from the project team.”

We are now over 12 months on and, to my knowledge, no OPRED findings have been reported. OPRED’s evidence could be crucial towards providing a basis for a legislation rethink that could deliver significant cost savings for the public purse.

Where is the evidence to justify taxpayers' spend on decommissioning?

Another way

With respect to the oil and gas industry, its representative group Oil and Gas UK (OGUK) is on record as stating that it believes legislation is in the right place.

The views expressed in this article are my personal views developed as a consultancy technical director who established a front-end decommissioning service line that provided support to the industry and DTI/DECC/BEIS. Furthermore, I had a team of environmental scientists undertaking environmental impact assessments for decommissioning programmes and dialogue with them reinforced my view that removal was, in many instances, a poor use of the public purse.

Finally, a frequent pushback on my views is that if we left offshore architecture in place we would end up with the furore that accompanied Brent Spar. What the Treasury can’t do is pocket the savings from leaving in place. If we used the money saved to support climate management investment, I believe the NGOs might see things very differently.

Article by Tom Baxter CEng FIChemE

Retired Senior Lecturer at Aberdeen University, Visiting Professor of Chemical Engineering at Strathclyde University, and retired Technical Director, Genesis Oil and Gas Consultants

Recent Editions

Catch up on the latest news, views and jobs from The Chemical Engineer. Below are the four latest issues. View a wider selection of the archive from within the Magazine section of this site.