Bud's Offshore Energy (BOE)

“These platforms are habitat for millions of animals. My opinion is that it’s immoral to kill huge numbers of animals in any kind of habitat.”

Dr. Milton Love, UCSB marine biologist

Inexplicably, BSEE’s Record of Decision (ROD) for the Programmatic Environmental Impact Statement on Pacific OCS Decommissioning (EIS cost: $1,604,056) endorses such habitat destruction by designating the most environmentally harmful, unsafe, punitive, and costly alternative as the “preferred alternative.”

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.”

In 2020, BOEM estimated the total cost of decommissioning the 23 Federal offshore platforms at $1.7 billion, and today’s real costs are likely to be much higher. Also, keep in mind that some thorny decommissioning liability issues remain to be resolved, particularly with regard to Platforms Hogan and Houchin.

The decommissioning costs for Hogan and Houchin are estimated by BOEM at $85.6 million, even though the cost of completing removing Platform Holly (single platform in similar water depth in CA State waters) may reach $475 million. Per the BOEM data, there is no collateral, supplemental financial assurance, or third party guarantee that could defray the Hogan and Houchin costs. The extent to which prior lessees could be held accountable is questionable given that the lease was assigned to (now bankrupt) Signal Hill in 1991, well before the predecessor liability language was added to the MMS bonding rule. Irregularities in the management of Signal Hill’s Abandonment Escrow Account for Hogan and Houchin further complicate the liability issues.

The path for timely facility decommissioning with the least environmental damage and safety risk has two essential elements:

• As proposed by Smith and Byrd, a comparative assessment process similar to that used for UK decommissioning.
• Realistic state legislation that addresses fundamental ownership and liability issues for the remaining structures.

Absent those steps, the noise will continue, the platforms will remain in place, and the best outcome for all parties will not be achieved.

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