‘Green’ decommissioning would save taxpayer money and is better for the environment

Sir,

The appointment of a new head of decommissioning at the Oil and Gas Authority (OGA) raises hope that a fresh pair of eyes might question current decommissioning plans.

If Mr Cohrs reflects on the benefits to society, the economy and the environment, will he come to the same conclusion as I have: the 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.

I urge Mr Cohrs to put the 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.

 

Who pays the wages of ‘spin’

The following is a quote from Shell: ‘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 – i.e. the tax has already been paid by Shell and Esso in previous years.’

That is spin: if decommissioning costs come in around the £60 billion estimate, the Treasury (the taxpayer) will be down by around £30 billion. If the costs are higher the treasury will pay more – a huge risk to the taxpayer. The taxpayer does the paying.

A Brent Delta platform decommissioning vessel moves in for the 24,000 tonne lift earlier this year.
A Brent Delta platform decommissioning vessel moves in for the 24,000 tonne lift earlier this year.

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.

 

‘There will be a green NGO backlash if installations are not removed’

Go read what the Scottish Wildlife Trust and Forum for the Future are saying. Both are supportive of leave in place.

 

‘Removal will provide an onshore jobs bonanza’

Headlines like this have been used numerous times in consumer media. Onshore activities account for around 2% of the overall decommissioning costs. The jobs are transient: once the task is complete there is no follow-on activity. There will not be a jobs bonanza.

However, the green energy option will provide many more sustainable jobs in design, fabrication and construction. The green energy stations will also provide continuous operations and maintenance jobs during their 30-40 year life.

 

Decommissioning is not good for the economy

How can a decommissioning industry that produces nothing and uses billions of taxpayers’ money be good for the economy? The investment has no legacy – we take something to bits, we have not built a factory or provided 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.

On the other hand, green energy will be UK based and unlike decommissioning it will pay taxes providing for health, education, tackling poverty etc. Furthermore, unlike decommissioning, green energy will be providing society and the economy with an essential commodity – power for industry, electric transport and heat for homes. What does returning a fraction of a percent of the North Sea seabed acreage provide the economy or society?

 

The OGA is maximising economic recovery

How can the current plans for decommissioning be maximizing economic recovery? An OGA objective of reducing removal costs by 30% is a good aim. But why remove in the first place when we can do so much more to maximize the economic benefit to the nation by using the money in green energy?

And a final thought. The OGA Decommissioning Task Force has no member from the largest stakeholder – the taxpayer. I wonder why that is.

 

Tom Baxter

Senior Lecturer

Chemical Engineering, School of Engineering, Fraser Noble Building

King’s College, Aberdeen AB24 3UE, Scotland

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed