And because of this ship it is easy to see how expensive topside removal must be. The vessel costed some 2.5B or so. Recovering that in a few dozen decommissionings means a Hugh price. And don't forget the operational cost of a crew of a few hundred, easily adds up to a few 100k/day. Then the topside, probably full of toxic flame retardants and asbestos needs to be dealt with.
I helped build and worked on a similar vessel, the VB10K [0]. We originally built it just for this purpose (decommissioning) after a bunch of hurricanes toppled oil rigs between 2005-2008.
BP was owned by the British government up until 1987. Maybe it’s their rigs from back in the day?
Private companies are usually required to have insurance to cover decommissioning their assets in the event of bankruptcy. I’d be very surprised if Britain wasn’t directly involved in the operation of these.
The notable exception is nuclear plants. In the US, they just get their operating certificate extended until they fail, then the owner hires a bk lawyer.
Fukushima will cost over $1 trillion to cleanup, plus the Japanese mobilized their military to source enough labor.
If its anything like how it works in most other oil and gas sectors, they transfer the well infrastructure to shell companies for next to nothing when they are at or near the end of their useful production life, that then promptly go bankrupt.
Now the big companies don't have to pay for clean up, magic.
That only works once. If the other side expects shenanigans, then the company can prepay the cleanup cost somehow, either as an ongoing tax, as upfront fee, or as an insurance pool that you pay into. There are probably hundreds of ways of structuring it.
It wasn't quite clear in the article, but the government isn't paying to remove the platforms, rather the cost of removing the platforms can be written off on taxes, so they (all the oil companies combined) would be paying 24bn less in taxes than they otherwise would have.
I certainly think you are asking a fair question, but I also think it is understandable that such operations would be considerably expensive. The equipment to remove oil rigs is not cheap [0] and I would assume the demand for such ships is high. Also, I can imagine that a rushed decommission can lead to various ecological disasters that would then cost more to clean up than a proper decommission (+ the added environmental damage)
I also agree with OP that $24 billion is a ridiculous amount of money assuming it isn't mostly graft. If the oil company had to pay for this operation entirely with its own money, with bankruptcy-threatening fines for failure to comply with strict independent oversight, I bet they could do it for 10% of that cost.
This comment is purely speculation based on my loose understanding of corruption in the construction industry. I am not familiar with petroleum engineering and could be wrong as I am quite obviously guessing.
You're missing the point. It's like the $10,000 toilet seat covers the US military paid for. I'm not saying they can't afford it. I'm saying it's graft.
Paying $10k for one toilet seat might be graft. We have to ask what the engineering specs were. $10k for an ISS toilet seat might be reasonable. And that $10k might be buying something else they don't want on the budget, which is near enough to graft as makes no difference.
But paying $1mil for many toilet seats probably isn't graft if you run 10,000 profitable paid toilets.
Until someone can successfully decomission a fleet of oil rigs for way less than $24bil, we don't know if it's a good price or not, but especially if it's a small fraction of the overall lifetime value of the oil produced, it might not be a big deal.
Very fair. Perhaps I'm misunderstanding the math as well - my understanding was 24B was the cost to decommission 350 platforms which comes out to about 68M a piece. I can't claim to know enough to judge whether it could be done drastically cheaper, but yes I'm sure there is some inflation in costs
That's a small vessel in the grand scheme of things, and only works for floating platforms, which can be towed if time is not an issue. For fixed installations let me introduce you to the completely crazy Pioneering Spirit.
Actually, if we're really talking about a tax writeoff, the cost of removing the platforms would be much greater than 24B£ - specifically, if would be enough that, if the income used to pay for it were included in the company's taxable income, the marginal income tax alone would be 24B£.
That money isn't being thrown into the sea though - it's being paid to all sorts of salvage companies, offshore specialists etc. It's not like the government will suddenly have 24bn less than they would otherwise.
This piece felt pretty one-sided, and given that it advocates for reducing costs to the petrochemical industry I was curious about the author and his potential motivations for writing this piece.
I found it informative that on his linkedin profile he describes himself as a "Chemical Engineering Consultant."
Maybe one day we figure out how to reuse the foundation/jacket for a huge windmill, that would be a win. And enough space to add an offshore High Voltage Station
There's no reason why communists couldn't make an attempt but historically micronations have been much more of a libertarian thing than a communist one. Communists seem to be much more into either changing the economic system of an entire country or founding communes within a existing country than being into making ocean platforms into a new communist nation.
That or a nearby government decides it doesn't want some new nation that might cause them trouble nearby so they invade. It's happened at least once when the newly formed Republic of Minerva was invaded by Tonga. Without a military of their own, Minerva had no way of preventing even a small nation like Tonga from taking over.
Sure, but being invaded by another nation takes things beyond merely protecting property rights since it is national sovereignty that ultimately is taken away. A country that can't protect its sovereignty certainly won't be able to protect the property rights of its citizens.
It's a long flight across the North Sea for migrating birds and the platforms have provided a rest stop and no doubt saved many birds from a watery grave - the gas flares have probably killed many more but that's another matter.
My brother was meteorologist out on the rigs for a while and he said that one morning after a storm he went outside and the heli-deck was completely packed with Golden Plovers (Pluvialis apricaria). There was not a square centimetre left exposed. Another time, in a force 12 gale, he watched a Lapwing (Vanellus vanellus) just outside the control room window flying for 20 minutes without making any headway against the wind. Not sure if it made it onto the platform.
Ok - I get the 'artificial reef is good' aspect but leaving the topside structures in place?
No way is that environmentally safe to do (imo). I’ve been on a few rigs over the years and the Topside structures are heavily contaminated with various petrochemicals.
By the time you have decontaminated it sufficiently for it not to be toxic to marine life and doing it at sea with all of the added costs and complexities vs. a full cap and off-shore decommission? Uhmm no, the sums don't add up.
Factor in the the added (admittedly pennies per tonne) value of the the scrap metal and the benefits of just leaving it there are head scratching.
Being fair – perhaps a properly capped well with the jacket left as an artificial reef might make sense, although the chances of it being snagged or snapped in the decades to come by a passing vessel probably outweighs the slight benefits of leaving it there for marine life to inhabit it.
I’m assuming that the proposal in TFA includes the costs of ensuring that all of that rusting infrastructure is properly decontaminated before it slowly corrodes and drops down to the sea bed but the article doesn't seem to mention that.
The costs of ensuring that the topside structure (the 'oil rig' bit that sticks out of the water) is properly decontaminated at sea to a level that would be safe(-ish) for marine life? Yeah, I think HN correctly spotted the smell of bs in the authors' proposal.
The article includes a link to the US program for turning rigs into reefs [1]. You should read that link. To start, the rig must be a good candidate for acceptance into the program (which includes contamination - or lack thereof) and the operator must generally “donate” half of the money they would save to the US state that will be accepting the rig to pay for the costs involved in maintaining the rig as a reef.
Carbon could be considered a resource if you want to grow trees on another terrestrial body with a ballpark atmospheric pressure acceptable range.
Volume was the reason this generated the highest spreads with EVE online Auto generated station goods.
A properly plugged & sealed tunnel to an aquifer of settled algae over time after blooms (nitrogen release Events) have fallen out of suspension and been compressed by pressure (Mariana Trench been tapped?) is where an oil rig can be intermittently towed in case the tap needs to get turned on that quarter.
And soil carried a volume penalty, but that is because there are exoskeletons and tunnels (evidence of centipedes and earthworms that have lived and died - "nature's cupbearer" for healthy soil) that create high surface area in a sediment mixture. Imagine rooting into raw regolith that fungi hasnt already "worked through" (import DNA for micro organisms [1] with even more surface area to process atmospheric N C H O before even introducing "compost-glistening-with-the-sparkles-of-exoskeltons" that is pleasant to smell)
If I understand this correctly the obligation to remove these structures from internetational law that the UK has agreed to. ISTM that the point of this law is to protect the ecosystems of the waters -- it seems to be operating on the assumption that leaving these structures in the ocean causes them to remain a disruption to the ecosystem. A sort of, you made your mess, now clean up after yourself, rationale.
But if leaving these structures in the ocean causes them to to become marine habits and is actually a net positive on the marine ecosystem, then the goals of this policy are at odds with its actual effects.
So now I wonder how hard it is to go back to OSPAR with evidence that leaving the structures in place is a good thing and getting the policy changed to allow that. Hopefully the OSPAR convention is less dysfunctional than the US Congress?
It's odd that they say it only creates 35 jobs. Then why is it so expensive? Seems like if it is so expensive, that will create, if not jobs, lots of person-hours of work, which is effectively jobs. Ok, so the jobs may be out of the country, such as manufacturers of equipment, but still. It takes labor to make it happen, and that is jobs.
I'm not one to advocate for doing things just to create jobs, but that statement seemed disingenuous.
I don't think we should set the political precedent that the oil industry should be allowed to abandon infrastructure in place and let it decay naturally. Ever. For any purpose.
Look at the history of the open pit mining industry, and underground mining industry abandoning things in place and the environmental havoc it has caused.
Resource extraction industries have proven time and time again that they cannot be trusted as responsible environmental stewards without aggressive oversight.
recent example on abandoned things in oil/gas industry:
When I guess that there will be a "reverse economies of scale" that will really bury the petroleum industry, this is a shining example. 24 billion to shutter these things?
60 comments
[ 21.9 ms ] story [ 257 ms ] threadhttps://en.m.wikipedia.org/wiki/Pioneering_Spirit_(ship)
https://deltamarin.com/references/pioneering-spirit-pieter-s...
https://www.youtube.com/watch?v=D5xXmEHPFp8
[0] https://gcaptain.com/interesting-ship-versbar-heavy-lift-ves...
errr... what?
Why is the entity that installed the platform there not responsible for that cost?
This article reads very much like a paid piece.
Private companies are usually required to have insurance to cover decommissioning their assets in the event of bankruptcy. I’d be very surprised if Britain wasn’t directly involved in the operation of these.
Fukushima will cost over $1 trillion to cleanup, plus the Japanese mobilized their military to source enough labor.
Now the big companies don't have to pay for clean up, magic.
This story has repeated itself a lot.
[0] https://www.youtube.com/watch?v=xsnW5CHrpQ8 - "How Do You Move an Oil Rig? With This Enormous $200M Ship"
I also agree with OP that $24 billion is a ridiculous amount of money assuming it isn't mostly graft. If the oil company had to pay for this operation entirely with its own money, with bankruptcy-threatening fines for failure to comply with strict independent oversight, I bet they could do it for 10% of that cost.
This comment is purely speculation based on my loose understanding of corruption in the construction industry. I am not familiar with petroleum engineering and could be wrong as I am quite obviously guessing.
https://www.washingtonpost.com/business/capitalbusiness/the-...
But paying $1mil for many toilet seats probably isn't graft if you run 10,000 profitable paid toilets.
Until someone can successfully decomission a fleet of oil rigs for way less than $24bil, we don't know if it's a good price or not, but especially if it's a small fraction of the overall lifetime value of the oil produced, it might not be a big deal.
So it sounds like a lot to me.
[Edit: if that was pounds not dollars, then more like 11 years]
https://www.youtube.com/watch?v=D5xXmEHPFp8 - Dismantling a platform in the North Sea
https://en.wikipedia.org/wiki/Pioneering_Spirit_(ship)
I found it informative that on his linkedin profile he describes himself as a "Chemical Engineering Consultant."
That said the question is are the habitats created, on balance, better than any of the drawbacks of leaving the systems in place?
What happens when the structures partially collapse or completely collapse? Do they create dangers either to well heads, vessels, ecosystems ?
My brother was meteorologist out on the rigs for a while and he said that one morning after a storm he went outside and the heli-deck was completely packed with Golden Plovers (Pluvialis apricaria). There was not a square centimetre left exposed. Another time, in a force 12 gale, he watched a Lapwing (Vanellus vanellus) just outside the control room window flying for 20 minutes without making any headway against the wind. Not sure if it made it onto the platform.
No way is that environmentally safe to do (imo). I’ve been on a few rigs over the years and the Topside structures are heavily contaminated with various petrochemicals.
By the time you have decontaminated it sufficiently for it not to be toxic to marine life and doing it at sea with all of the added costs and complexities vs. a full cap and off-shore decommission? Uhmm no, the sums don't add up.
Factor in the the added (admittedly pennies per tonne) value of the the scrap metal and the benefits of just leaving it there are head scratching.
Being fair – perhaps a properly capped well with the jacket left as an artificial reef might make sense, although the chances of it being snagged or snapped in the decades to come by a passing vessel probably outweighs the slight benefits of leaving it there for marine life to inhabit it.
I’m assuming that the proposal in TFA includes the costs of ensuring that all of that rusting infrastructure is properly decontaminated before it slowly corrodes and drops down to the sea bed but the article doesn't seem to mention that.
The costs of ensuring that the topside structure (the 'oil rig' bit that sticks out of the water) is properly decontaminated at sea to a level that would be safe(-ish) for marine life? Yeah, I think HN correctly spotted the smell of bs in the authors' proposal.
[1] https://www.bsee.gov/what-we-do/environmental-focuses/rigs-t...
I bet that is nothing compared to what leaked from the well..
Volume was the reason this generated the highest spreads with EVE online Auto generated station goods.
A properly plugged & sealed tunnel to an aquifer of settled algae over time after blooms (nitrogen release Events) have fallen out of suspension and been compressed by pressure (Mariana Trench been tapped?) is where an oil rig can be intermittently towed in case the tap needs to get turned on that quarter.
And soil carried a volume penalty, but that is because there are exoskeletons and tunnels (evidence of centipedes and earthworms that have lived and died - "nature's cupbearer" for healthy soil) that create high surface area in a sediment mixture. Imagine rooting into raw regolith that fungi hasnt already "worked through" (import DNA for micro organisms [1] with even more surface area to process atmospheric N C H O before even introducing "compost-glistening-with-the-sparkles-of-exoskeltons" that is pleasant to smell)
[1] https://www.amazon.com/Algae-Research-Supply-Education-Aquac...
But if leaving these structures in the ocean causes them to to become marine habits and is actually a net positive on the marine ecosystem, then the goals of this policy are at odds with its actual effects.
So now I wonder how hard it is to go back to OSPAR with evidence that leaving the structures in place is a good thing and getting the policy changed to allow that. Hopefully the OSPAR convention is less dysfunctional than the US Congress?
I'm not one to advocate for doing things just to create jobs, but that statement seemed disingenuous.
Look at the history of the open pit mining industry, and underground mining industry abandoning things in place and the environmental havoc it has caused.
Resource extraction industries have proven time and time again that they cannot be trusted as responsible environmental stewards without aggressive oversight.
recent example on abandoned things in oil/gas industry:
https://www.google.com/search?client=firefox-b-d&q=alberta+a...
We have enough deserts in the solar system. We should be developing the ocean deserts more.