On December 7, 2023, the Bureau of Safety and Environmental Enforcement (BSEE) issued a Record of Decision (ROD) recommending the full removal of California’s 23 offshore oil platforms in federal waters, following a Programmatic Environmental Impact Statement (PEIS) conducted to assess decommissioning options for platforms, pipelines, and other related infrastructure. However, upon close review, the PEIS and ROD appear to have reached misguided and detrimental conclusions due to critical oversights in their analyses.
The bankruptcy court’s priorities should be 1) minimizing safety and environmental risks and 2) protecting the public from the massive decommissioning liabilities.
Per the latest BOEM information, Cox and affiliates Energy XXI and EPL operate 477 platforms, which is 31% of the Gulf of Mexico total! (See the related information posted last June.) BSEE estimates that the decommissioning costs for these platforms will exceed $4.5 billion!
Per BSEE data, Cox and its affiliates were cited for 780 incidents of noncompliance (violations) in 2023. They thus accounted for 43% of all 2023 GoM INCs.
Questions:
How will taxpayers be protected from Cox’s $4.5+ billion decommissioning obligations?
What is the plan for both safely decommissioning facilities and operating those that remain?
Why was Cox allowed to continue expanding GoM operations without demonstrating financial assurance and operational competence?
How was a failing operator (Cox) selected just 8 months ago for a Federally funded (DOE) project to repurpose GoM facilities for carbon sequestration purposes?
The Cox bankruptcy is yet another costly lesson for Federal regulators. Moving forward, decommissioning and lease assignment policies must prioritize safety, environmental protection, and protection of the public’s financial interests.
On January 2, 2024, Chevron Corporation announced that for fourth quarter 2023, the Company will be impairing a portion of its U.S. upstream assets, primarily in California, due to continuing regulatory challenges in the state that have resulted in lower anticipated future investment levels in its business plans. The Company expects to continue operating the impacted assets for many years to come. In addition, the Company will be recognizing a loss related to abandonment and decommissioning obligations from previously sold oil and gas production assets in the U.S. Gulf of Mexico, as companies that purchased these assets have filed for protection under Chapter 11 of the U.S. Bankruptcy Code, and we believe it is now probable and estimable that a portion of these obligations will revert to the Company. We expect to undertake the decommissioning activities on these assets over the next decade.
“It’s great that the federal government finally has a loose game plan for getting oil companies to clean up their rusty messes,” said Miyoko Sakashita, oceans program director at the Center for Biological Diversity.
Complete removal may be the most politically expedient alternative in California, but it is by far the most environmentally damaging and poses the greatest safety risks. Old disputes about offshore oil and gas production should not be driving decommissioning policy.
Alternative 1 (the preferred alternative) calls for “the complete removal of platforms, topside, conductors, the platform jackets to at least 4.6 m (15 ft) below the mud line, and the complete removal of pipelines, power cables, and other subsea infrastructure (i.e., wells, obstructions, and facilities).”
Ironically, the ROD correctly acknowledges that alternative 2 (partial removal) is environmentally preferable. So what drove the decision to select the alternative that destroys “the most productive marine habitats per unit area in the world?” Was there pressure to choose the alternative that is most punitive to an industry that is despised by California activists? If so, their schadenfreude is certain to be delayed by administrative and legal challenges that draw further attention to the social costs and environmental damage associated with “complete removal.”
Current structure count:1438 (Per BSEE’s platform structures online query, the number of non-removed structures is 1554. The reason for the discrepancy is unclear; perhaps the dashboard number is more current.)
Structures with decom application submittal: 291
Total structures on terminated leases: 318
Structures on terminated leases with decom application submittal: 196
Planned disposition of the 291 pending removals (25% of the structures to be reefed):
An excellent paper by John Smith and Bob Byrd is attached.
The authors recommend the operators of large OCS platforms offshore California and in the Gulf of Mexico who propose to partially remove platform jackets prepare Comparative Assessments to support their decommissioning applications. The Comparative Assessments can also be prepared to support the case for allowing partial removal of smaller platform jackets and allowing pipelines and drill muds and cuttings to remain in-situ.
NOPSEMA has kindly provided links for the slides presented at the 3-4 October International Regulators’ Forum Offshore Safety Conference in Perth, Australia. They will be uploading the video recordings at a later date.
On day 2 (stream 2) Bryan Domangue (BSEE) presented updated data on the progress that is being made in plugging inactive wells and decommissioning idle platforms (see the charts pasted below). In the following session, Bryan made an interesting presentation on the capping stack deployment exercises in the GoM (picture below).
For excellent slides on investigation and sharing the lessons learned, see session 9 (day 2, stream 1).
Guardian: Juvenile rockfish seen on an oil platform off the coast of Santa Barbara. For the scientists who study them, preserving these accidental marine ecosystems has become a moral issue. Photograph: Scott Gietler
Excellent Guardian article featuring my former colleague Dr. Ann Bull and Dr. Milton Love from the University of California at Santa Barbara.
According to a 2014 study they (Bull and Love) co-authored, the rigs were some of the most “productive” ocean habitats in the world, a term that refers to biomass – or number of fish and how much space they take up – per unit area. The research showed the rigs to be about 27 times more productive than the natural rocky reefs in California.
Bud's Offshore Energy (BOE) 