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U.S. Agency Expands Support for Partial Decommissioning of Oil Rigs

| Jan 30, 2014 | Analysis

More offshore oil rigs could be permitted to remain on the ocean floor after they retire, according to a new policy adopted by a little-known agency that regulates the offshore oil industry in the United States.  The Bureau of Safety and Environmental Enforcement (BSEE), a new agency housed within the U.S. Department of the Interior (DOI), issued its new “rigs-to-reefspolicy this past summer, reaffirming that it “supports and encourages the reuse of obsolete oil and gas structures as artificial reefs.”

oil rig

The rigs-to-reefs program basically allows oil rig operators to leave the underwater structure of their rigs in place, a practice that is not only cheaper for the operators but also avoids potentially harmful environmental impacts.

Operators who apply for a permit to decommission a retired rig can choose to deconstruct the top portion of an offshore platform structure, leaving the structural base of a platform in place below the waterline.  Alternatively, they may topple or tow the base into a position where it remains structurally stable on the seafloor.  The platforms—which are typically composed of sturdy metals like iron—remain underwater indefinitely and act as artificial reefs that can support a wide variety of marine life.

BSEE’s recently unveiled policy makes three major changes to the federal government’s existing rigs-to-reefs program.  First, offshore oil and natural gas operators are no longer subject to a five-mile buffer zone that had previously limited the number of retired rigs that could be converted into artificial reefs.  Second, the new policy categorically eliminates from consideration any storm-toppled platforms that have suffered “structural failure”—these facilities do not qualify for rigs-to-reefs.  Third, the new policy gives BSEE the discretion to grant extensions to the five-year deadline for decommissioning a nonproductive rig whenever the agency is satisfied that the operator is acting diligently in pursuit of an artificial reef program through state regulatory channels.

The intentional abandonment of retired offshore oil platforms has been authorized in the United States for nearly thirty years.  Congress laid the groundwork for the rigs-to-reefs policy when it passed the National Fishing Enhancement Act (NFEA) in 1984.  The NFEA streamlined procedures for the permitting and establishment of artificial reefs, and it directed the Secretary of Commerce to develop a National Artificial Reef Plan (NARP), which was completed in 1985.  The NARP authorized the now-defunct Minerals Management Service (MMS) to begin regulating offshore oil platforms as “de facto” artificial reefs.  MMS regulated and approved permits for operators to convert offshore platforms into reefs from the mid 1980s until 2010—when MMS was dissolved and restructured by administrative order in the aftermath of the Deepwater Horizon oil spill.

BSEE was one of several new federal agencies to emerge from the 2010 restructuring.  The agency now bears responsibility for oil spill response preparation, offshore technology research and development, and compliance-oriented environmental enforcement.  In its regulatory role, BSEE supervises the mandatory removal of nonproductive oil rigs throughout U.S. waters; this regulation is formalized in its “idle iron” policy.  (DOI and MMS had policies in place since the 1970s that required operators of offshore rigs to remove inactive facilities, but these rules were not strictly enforced until the mid-2000s.)

Proponents of the federal rigs-to-reefs policy—among them, sportfishing advocates, some environmental organizations, and the oil industry—contend that the practice is a cost-effective and environmentally sound alternative to complete structural removal.  Although exact figures vary depending upon the site, complete removal of an oil platform can range from roughly $4 million to $48 million, according to a 2001 report performed by MMS.  Partial decommissioning, by contrast, can range from about $3 million to $9 million, a fraction of the costs of complete removal.  On this basis, partial decommissioning may be more efficient, and it also helps the industry avoid a bigger carbon footprint from extensive offshore deconstruction.

Proponents also point to environmental benefits that accrue when a wide range of marine life takes refuge in and around the platforms.  Recreational fishers describe oil platforms as a “mecca for sportfishing” because of the wide range of species that aggregate around existing and retired oil platforms.  Meanwhile, the deconstruction of underwater metal platforms can have a severe impact upon aggregated marine species, because the industry relies upon underwater explosives in about 65% of its removals.  A 2003 study by MMS found that a wide range of marine creatures—from fish to turtles and marine mammals—suffered impacts from the explosions at these facilities, either because they were within direct range of the explosion or were affected by shock waves or acoustic impacts.  Based on these factors, environmental supporters of rigs-to-reefs declare that the policy is “a step in the right direction.”

However, not all environmental groups agree that rigs-to-reefs is beneficial to the marine environment.  The California-based Environmental Defense Center argues that the toxic pollution and contaminated debris around oil platforms makes them an unhealthy place for marine life to aggregate.  Recreational fishers often target these facilities and might bring home seafood contaminated with petroleum byproducts, leading to risks to human health.  Many other environmental organizations have questioned whether it is good public policy to allow oil companies—who are profiting immensely from offshore drilling—to save money and leave debris in the ocean indefinitely.

Additionally, liability concerns emerge when oil platforms are abandoned off of a state’s coastline.  Any state that permits rigs-to-reefs off its coastlines is required to accept title and liability for such structures after they are constructed.  States’ liability risks could be sizeable: commercial fishers, recreational divers, and other ocean users might suffer harm from adverse interactions or entanglement with unmarked underwater structures.  BSEE is currently developing a mapping tool that will alert ocean users to the presence of these underwater facilities.

Although the practice of rigs-to-reefs remains controversial, six states currently allow the practice in offshore waters: namely, California and all five states in the Gulf of Mexico (Texas, Louisiana, Mississippi, Alabama, and Florida).  BSEE estimates that more than 500 rigs-to-reefs sites currently exist in federal waters.



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