Government reports on the future of the oil and gas industry
AS someone who provided written evidence to the House of Commons Scottish Affairs Committee, The Future of the Oil and Gas Industry, I attended the launch of the final report at an Oil and Gas Technology Centre session on 4 February.
My written evidence related to decommissioning and the societal, environment and economic impact of leaving offshore architecture clean, in-place and re-purposed as a benefit to the marine environment. I also proposed that the money saved by doing so should be used to support UK decarbonising initiatives. I took the stance of a taxpayer, the largest stakeholder in decommissioning, and provided my evidence as to why this option should be investigated: an option which current regulation largely precludes.
I was pleased to see some of my evidence was used together with a reference to my articles on this subject. However the report used a quote of mine that was out of context. Relating to Economic Benefit, the report cited my colleague, Richard Neilson as saying "any reduction the Scottish sector could achieve in the cost of well plug and abandonment support would deliver particular benefits."
With well plug and abandon (P&A) being around 50% of decommissioning costs this is a true assertion. That quote was then followed by: "Other commentators were less positive, arguing that while decommissioning creates opportunities in the short term, there is a natural limit to the contribution it can make to the economy in the longer term. Tom Baxter, Aberdeen University argues that: While it’s true you create short-term employment and that the employees and service companies will pay taxes, you don’t build any factories or provide new infrastructure to serve society and the economy. Also, much of the removal money will go to the heavy-lift companies –the UK has none."
My position has nothing to do with P&A and the benefits of developing more cost efficient techniques to be used for future projects in the UK and globally. The quote is completely out of context and infers I disagree with Neilson. My view is that decommissioning per se provides the UK taxpayer with very little benefit.
I was also unhappy with the context of another quote under Rigs to Reefs. Wendy Kennedy of Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) stated: "We have visited, and in the Gulf of Mexico if you want to leave something in place you do not leave it where it is. You have to clean it all up, take away the topsides, cut it, move it to the reefing site that is close to shore, because then it is useful for fishing and things, and then you have to pay money to the local state to maintain that fishing site. In the UK, by the time you have plugged and abandoned the wells, taken off the topside, cut it and started moving it to shore, frankly you are just as well carrying on and decommissioning and having it cleaned up onshore."
Again a true statement when taken in isolation, but the concept of rigs to reefs as proposed by the Scottish Wildlife Trust (SWT) and myself is to leave in place. Shallow water placement, as undertaken by the US, is not a viable concept for the North Sea. It costs as much to move to shallow water as it does to take onshore and recycle, hence there are no significant cost savings. Furthermore, the benefits from recreational diving and fishing that rigs to reefs offers in the US are not mirrored in the UK. So why use this quote as it infers SWT and myself are proposing shallow water placement? What the rigs to reefs approach, as used in the US, does demonstrate is that man-made structures in the marine environment can be a positive.
If I put my lecturer’s hat on I would mark the Decommissioning section of the report with a ‘could do better’.
Although unlikely to happen, I would like the Select Affairs Committee to reissue the report with the aforementioned corrections included. Since I view the taxpayer as a key client for this report, it would be the next revision – client comments incorporated.
On a more positive note, the report does recommend that re-purposing should be further investigated.