Why is the UK government spending £25bn dismantling oil platforms?

An oil rig, taking up space. Image: Gary Bembridge/Wikimedia Commons.

As North Sea petroleum moves towards the end of its lifespan, the UK taxpayer is to spend some £25 billion in the next five years to pay nearly half the cost of removing the offshore infrastructure.

This might sound like the right thing to do, but as I have argued before, it is probably not the best use of public money. The environmental benefits of decommissioning are questionable. If we instead spent the money on, say, building more renewable energy, it would create jobs for longer and you would generate carbon-free power for your trouble. Others might not share this view – my point is it’s a debate we’re not having.

I have repeatedly asked the relevant government agencies to outline the motivations that support the current plans. They have never given me straight answers. My latest move has been to submit a request for information to the government’s Department for business, Energy & Industrial Strategy.

Environmental bluster

In my request, I once again expressed my concerns about value for money. I said my previous requests had been met with a stock response that offshore operators have to decommission installations at the end of a field’s economic life, and that in accordance with UK and international obligations this has to be safe, efficient and cost-effective to the taxpayer while minimising the risk to the environment and other users of the sea.

This, I told them, says nothing about the reasons behind the policy – neither the primary environmental motivation nor anything to do with society or economics. I asked for the environmental basis underpinning the policy.

I received a reply from the director of decommissioning at the department. It says:

The UK’s international obligations on decommissioning are governed principally by the 1992 Convention for the Protection of the Marine Environment of the North East Atlantic (the OSPAR convention) and in particular decision 98/3 on the disposal of disused offshore installations.

The UK is indeed one of 15 parties to the convention, all of them countries in western Europe. Paragraph 2 of decision 98/3 stipulates that disused offshore installations can’t be dumped or left “wholly or partly in place” at sea.

The competent authority can allow exceptions, but it’s quite narrow – covering certain concrete infrastructure; the base of large steel structures; and some other installations that are very damaged. It leaves little scope for what I am suggesting.

The response says that:

We seek to achieve effective and balanced decommissioning solutions which are consistent with international obligations and have a proper regard for safety, the environment, other legitimate uses of the sea, economic and social considerations as well as technical feasibility …

[The decommissioning process] entails an assessment of the environmental impact [by the operator, and] … it is one of the factors that influences the final decision [by them on whether to go ahead] … Ultimately if leaving the infrastructure in place would not have a significant detrimental effect on the environment then an operator may make a case to decommission in-situ.

None of this says anything about overriding environmental benefits in removing these structures. Decision 98/3 is silent, and none of the government reports I have read address them either.

As for the operator’s environmental impact assessment, it is not their job to consider the taxpayer’s options. It is for the government, and it’s not happening.

How does this therefore amount to the government achieving a balanced solution? Where is the evidence that the legislation is providing a positive outcome? If it can’t be provided then the legislation is not appropriate and should be challenged – however well intentioned it may be.

The response also informs me that a joint industry project called INSITE is aiming to “enhance scientific understanding of the effect of man-made structures on the North Sea and thus support decision-making [by operators]”.

I am familiar with INSITE and have met with the project manager and discussed the programme. INSITE is undertaking some first-class science but its very existence and government funding only serves to demonstrate the lack of evidence that supports removal.

The money question

The department’s response also addresses the cost to the taxpayer, which is being spent in the form of tax relief for operators who are decommissioning. It says:

North Sea operators have paid over £330bn of tax since the 1970s at tax rates significantly higher than onshore companies, therefore allowing tax relief on decommissioning ensures a fair tax system that gives companies good incentives to maximise economic recovery.

What is that justifying or explaining? Because oil and gas companies have paid due taxes on eye-watering profits in the past, the government can use taxpayers’ money for future decommissioning costs?

The response refers to these as an “unavoidable cost for industry”. Well plugging and abandonment is unavoidable, but asset removal? Witness the rigs to reefs programme in the US.


The response says the government and industry are working on reducing decommissioning costs by 35 per cent. But why spend the money in the first place? If a large proportion of costs can be removed, surely that would be a better incentive to maximise petroleum recovery?

The UK, it concludes, remains committed to OSPAR and decision 98/3 and “there are no proposals to change the decommissioning process in operation”. The taxpayer, in other words, will be running up this huge bill to follow legislation without anyone having to demonstrate the case for it.

It is time that decommissioning policy be hastily re-examined in the UK. The government needs to commission a full evidence-based report into the environmental, social and economic benefits, comparing them to other options such as building more green energy stations and even spending the money on things like health or education.

The ConversationIf I am proven right about which will come out on top, the UK should renegotiate terms with OSPAR. Blindly going ahead with this policy is wrong. It is time to think again.

Tom Baxter, Senior Lecturer in Chemical Engineering, University of Aberdeen.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

Transport for London just cut its bus services. You probably didn’t notice.

A number 12 bus crosses Westminster Bridge. Image: Getty.

One of the biggest changes to London’s buses happened on Sunday 16 June – although Londoners won’t have realised the full implications until the following morning, when they tried to go about their morning commutes. Then, they might have been surprised and angered with how inconvenient the service has become.

Transport for London has a strategic plan to cut the total length of routes it operates every year to 2022, and then to start increasing them again. The idea is that, by 2024, services in inner London will have fallen, and services in outer London will go up.

The Central London bus changes are part of the Inner London cuts part of the plan. Transport for London says bus use is dropping, and the changes reflect demand. But if you take a closer look at the changes, they don’t make sense when you consider what people use Central London buses for.

The basic difference between inner and outer London routes is that the inner routes, as well as interchanging with tube and train for the last part of the commute, are able to get people from home to work in Central London; whereas the outer routes complete local journeys and connect to transport hubs.

There are historic reasons for this. Many inner London buses are the successors to trams and trolleybuses. Their purpose was to get people from the early suburbs to the centre of town. Because of their high frequency and competitive fares, they were so successful that they killed off a number of railway stations close to the terminals. If you look back at old tram route maps, you can still see the clear lineage to current routes.


Bus routes in London have experienced only a couple of major changes in their history. Perhaps the most significant is the Bus Reshaping Plan of 1966, which responded to traffic congestion in the centre by splitting up routes that crossed the capital into overlapping services. These were complemented by new bus routes that operated around suburban hubs that would not the vulnerable to central congestion. All this ended the ability to get from outer suburbs to central London in a single trip.

The last significant change came in 2003 when money from the new congestion charge was used to enhance bus services which crossed into the central charge zone. This was intended to encourage more journeys by bus: the improved service carrot to the stick of charging. These reforms saw an increase in bus passengers because the enhanced services could make use of the less congested streets.

The latest changes achieve the strategic plan operation cuts objectives by lopping off sections of routes near the centre. Without wanting to get stuck into too many examples, this means that many inner routes barely enter central London at all. The 134 from Finchley, for example, gets curtailed at the Euston Road instead of going along the length of Tottenham Court Road. The 45 from Clapham Park now turns back at the Elephant and Castle. There are numerous examples where the change makes no sense at all; Transport for London says the hopper fare will mean that you can changes buses to complete your journey at no extra charge.

People do not just use the bus because it is cheap. They do so because it is convenient, even if slower. Having to change repeatedly makes the journey longer and less convenient. Buses are subsidised by London Underground fares, and it is a good job they are: if everyone that needed to get from Finchley to Tottenham Court Road did so on the Northern Line and not the 134 the system would be in trouble.

The real losers will be anyone who finds it difficult to get on or off the bus or doesn’t want to wait around at night on their own. The rerouting of the number 40 completely away from Fenchurch Street exemplifies how the changes remove convenient and safe interchange. The station is already the only station with no direct tube interchange: now it has no direct bus link either, necessity a long walk to the nearest options.

A final thought on the changes: they have been communicated terribly by Transport for London. A few announcements on buses that people tend to ignore anyway, and not much else, unless you like to regularly trawl their website for information. Operators who make a lot of big changes all in one go have not been very popular since the May 2018 rail timetable change. Londoners might not be willing to put up with another transport planning fail.

Steve Chambers is an urban planning and transport consultant, lecturer and campaigner. He can be found on Twitter as @respros.