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.

 
 
 
 

Park Life: On the repeated incineration of Alexandra Palace

Alexandra Palace from the air. Image: John Bointon/Wikimedia Commons.

Head directly north in a straight line from the official centre point of London at Charing Cross, and the first park of any real size you’ll hit is Alexandra Park. You’ll know you’re headed in the right direction when you spot the whacking great palace sat on the hill in the middle of it.

But Alexandra Palace and Park aren’t the former home of some forgotten bit of the nobility: they were actually purpose built for more or less their current use, as a venue for North Londoners to get up to a wide variety of things that may or may not be considered fun.

Various Victorians, including Owen Jones (presumably not him), one of the architects responsible for the Crystal Palace in the south, thought an equivalent in the north might be worthwhile, and used the same cost-saving manoeuvre: while the Crystal Palace had been built from the construction materials of the Great Exhibition, it’s northern counterpart used parts from the 1862 International Exhibition in Kensington.

Proving some kind of point, I guess.

Initially known as “the palace of the People”, it took on a marginal air of aristocracy when the park opened in 1863, the same year that the future King Edward VII married Alexandra of Denmark. The building opened in 1873, and copied Crystal Palace again, by almost immediately burning to the ground.


But two years later they’d nailed the bits back together and finally the people of North London had something to do other than complaining how long it’s going to take them to get to this birthday party in Peckham.

One of the more notable features of the next century or so of the park’s existence was its racecourse, known as The Frying Pan, because it looked a bit like a frying pan on whatever the Victorian equivalent of satellite photography is (balloon rides or imagining things, I guess). Popular for much of its life, attendances dwindled in the 1970s. Who wants to look at horses when television’s in colour now?

It was the favourite course of famous sexist and horse describer John McCririck – he’s been linked to efforts to get it rebuilt, and has instructed his wife to scatter his ashes on the site. Hopefully local residents will be warned so they can shut their windows first. Though the outline of the course is visible from above – the cricket pitch sits in the middle of it – It otherwise only survives in the names of a couple of now trendified gastro-pubs, the Victoria Stakes and the Starting Posts.

Early non-horse based physical activities available included going up in a balloon (mainly to draw pictures of what the race course looked like, presumably) and then jumping off the balloon while wearing a parachute if you were, for example, waitress turned daredevil Dolly Shepherd, commemorated in a mural on the side of the palace. There was also a lido, which legend states was used to wash visiting circus Elephants. It is unclear whether this is connected to the dubious cleanliness that to its demise by the early part of the last century.

Winter sports have been an unlikely intermittent features of the park: you prod the some of the undergrowth on one side of the hill, you might be able to uncover the remains of what was once London’s most popular dry ski slope, ideal for if you didn’t want to have to lie to all your friends about how much fun your first skiing holiday had been. Though long since defunct, in 1990 it gained a spiritual successor in the palace’s ice rink, which among other things has been home to various ice hockey teams, most recently the ‘Haringey Huskies’, it says here.

Less glamorous from this angle. Image: Ed Jefferson.

But back in the 1980s the palace and park were briefly threatened with being entirely sport-based. After the palace decided to have a belated centenary celebration and burn down again, there was a proposal to redevelop the whole thing into a massive sports complex, including – good news, snow haters – a brand new dry ski slope. In the end nothing came of it – the existing building was retained and most of the sport associated with the park now is of the indoor variety: among many other things, the palace hosts darts and table tennis tournaments.

The park does see a bit of the action. Aside from the football and cricket pitches, a popular brand of energising drink sponsors an annual soapbox race, and there’s a miniature golf course that makes up for being golf by a) being miniature and b) allowing you to drink while playing (well, if you book the whole thing for an office party circa 2011).

Sadly the park’s best sport of all has been retired: watching puce-faced CityMetric writers attempt to run to the top of the hill the palace sits on, while placing bets on whether they will reach the top before keeling over and dying (2015-2018).