UK taxpayer being short-changed on decom plans

Much of the money will go to overseas heavy lift, marine vessel and well plug and abandonment companies.
Much of the money will go to overseas heavy lift, marine vessel and well plug and abandonment companies.
Tom Baxter
Opinion by Tom Baxter

The recent government call for evidence provides an opportunity to restate my case for a review of the current legislative framework associated with decommissioning.

The motivation for the review is my position as a taxpayer: the largest stakeholder in decommissioning.

Some industry commentators and academics have been critical of my position by stating that decommissioning is not a cost to the taxpayer.

However, the recent National Audit Office report and Parliament’s Public Cost of Decommissioning Oil and Gas Infrastructure inquiry quite clearly states that it is.

This is important, as the cost to the taxpayer is key to my position in challenging legislation.

Legislation is put in place to protect society, the economy and the environment – the pillars of sustainability. My contention is that current legislation, particularly OSPAR 98/3, pushes the UK taxpayer to support decommissioning activities that produce little or no benefit.

Presumably we are removing oil and gas architecture to benefit the environment. Where is the evidence that supports this? We are ripping out marine ecosystems that have been built up over 30-40 years and, in doing so, significant amounts of energy are required, hence contributing to global warming.

Why don’t we make the wells safe and consider leaving the infrastructure clean and inert as a benefit to the marine environment, a position supported by the Scottish Wildlife Trust (SWT) and other environmental groups?

However, leave clean and in place is not an option OSPAR would allow.

Since global warming is such a huge threat to our seas why don’t we use the money saved from leaving in place for green energy and emissions reduction measures or, as favoured by SWT, for marine conservation?

This would seem to be a far superior use of taxpayers’ money.

In terms of society one of the main attractions would be employment. Undoubtedly decommissioning will provide jobs but these are short term and, with respect to onshore dismantling and recycling, the touted jobs bonanza is a myth.

On the other hand green energy would provide long-term jobs in operations and maintenance. Furthermore, from a workplace safety viewpoint, leaving clean and in place would appear to be a much less hazardous option than offshore preparation, removal and onshore dismantling and recycling.

Also, what does society gain from returning the seabed to sand and silt – a small percentage increase in seabed acreage for our fisherman? How does that compare with the societal benefits from green energy? Not very well I would contend.

How does decommissioning benefit the economy? It is a drain and much of the money will go to overseas heavy lift, marine vessel and well plug and abandonment companies. Instead of being a drain on the treasury, green energy will have the benefit of providing taxes for the operating lifetime of the energy stations.

It would therefore seem that conducting a holistic, evidence based review of the legislation could yield a different approach to that mandated by OSPAR.

The evidence being used, where appropriate, to renegotiate the legislation and thereby allow the option of leave in place. Leave in place would support key government objectives of maximising economic recovery and reducing decommissioning costs. So one would think that this is an option worthy of consideration.

Returning to the opening paragraph, I’ve found that I can’t provide evidence to support the option of leave in place because the following is stated in the government’s call;

“However, the regulation of any aspect of decommissioning, including questions pertaining to compliance with our international treaty obligations with respect to decommissioning, is not part of this call for evidence.”

So does this mean that the government will put out a separate call for evidence supporting a compliance challenge or has it been decided that this is not an option that the government will consider? If it is the latter, the taxpayer is being short changed.

Tom Baxter, Senior Lecturer, Chemical Engineering, Aberdeen University