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North Sea Oil Decommissioning Boondoggle Set To Waste Billions

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posted on Aug, 4 2016 @ 07:24 AM
British taxpayers are in danger of being tricked into paying billions for a North Sea Oil decommissioning programme that has been designed to fail.

Here's how they did it in 1924. Simple flat plate pontoons.

This is the modern version.

Seaways Nessie (see image above) provides a method of removal to dock based on well-established floating dock technology, proven in the docking of ships in the 80,000 tonne range – four times the weight of a large platform including the topsides. It is also based on the simple, profitable method used by the renowned Mr Cox, who salvaged the German High Seas Fleet scuttled in 1918 in Scapa Flow.

Nessie’s deep draft provides simple zero heave lifts that guarantee there will be no heave collisions and eliminate the need for complex, expensive, unreliable, motion compensating, dynamic hydraulic systems.

There are more than 400 North Sea oil platforms ready to be decommissioned, a job that involves taking the platform back to shore and returning the seabed back to its original state. Estimates for the cost of decommissioning and restoration varies between 30 and 100 billion dollars over the next two decades with at least 75% of the cost coming from the UK taxpayer.
At present, removal of oil and gas platforms is a costly process with specialist ships such as the new Swiss owned “Pioneering Spirit”, rumoured to have cost in excess of 3 billion US Dollars. This vessel, now long overdue, will command huge hire charges by their owners.

. . .

“I’m very concerned that as things stand, because we don’t have an alternative operational at the moment, the tax money to decommission the platforms will be paid to foreign companies and will create jobs for thousands of foreign workers, rather than supporting UK based shipyards and steel mills that are closing down with the loss of jobs for thousands of UK workers.” said Mr Glass.
“The solution is quite simple in operation, we’ve created our own submersible which we have called NESSIE. (Novel Extended Semi-Submersible).”

. . .

Mr Glass has estimated that NESSIE can be built at less than 10% of the cost of the Pioneering Spirit and operated at a correspondingly lower day rate. However, the cost of further development is prohibitive and he has been actively canvassing politicians and industry leaders for support and looking to the oil and gas sector for financial funding.

The following is the expensive version that taxpayers are expected to pay for. Industry insiders are split between those confident it will work and those who think movement of the vessel will cause excessive problems with the lift. Go to 1:00 to see the lifting operation.
The Pioneering Spirit has done some lifting tests, but not an actual test of the first big lift planned.

I see this as a deliberate attempt to avoid decommissioning by staging a dramatic and expensive failure, followed by lots of talk about how difficult it is.

If they want to decommission they'll use the tried, tested and much cheaper method.

They don't want to decommission the North Sea Oil infrastructure. They want to keep some infrastructure functional for when new technologies can squeeze a bit more out, cannibalise what parts they can, and leave the rest to rot. In many cases leaving it in place is probably the most ecologically sound option. Bringing the Brent Spar to shore for recycling caused more pollution than just sinking it at sea.

There's a lot of money at stake here. We don't want it wasted hiring the Pioneering Spirit if there's a much cheaper homemade option.

edit on 4 8 2016 by Kester because: (no reason given)

posted on Aug, 4 2016 @ 07:32 AM
This is how it affects us.

UK Government tax breaks mean that the UK pays 75% of the cost of decommissioning. This will consume 100% of the income from North Sea oil production between 2020 and 2040. This will have a drastic impact on social programmes that are already critically underfunded.

posted on Aug, 4 2016 @ 08:41 AM
Well the best way to waste money is put the government in charge.

Why are the platform owners not responsible for removal? Or does the British govt own them?

posted on Aug, 4 2016 @ 08:48 AM
Oh great. More austerity, more cuts.

Just bring back Victorian workhouses, it's only a matter of time.

posted on Aug, 4 2016 @ 09:01 AM
Can't we just withdraw the tax breaks and get the oil industry multinationals to shoulder the burden ? It's not like decommissioning the rigs has come as a surprise, they own the damn things after all.

posted on Aug, 5 2016 @ 01:41 AM
a reply to: Bluntone22

I don't think the operators would take the rigs on if they had to pay 100% of the decommissioning costs. This exposes one of the lies of the North Sea oil industry. The claim that they would clear up after themselves. Everyone practical knew from the start decommissioning would be next to impossible in many cases. The pipelines for example. I don't know if it's true but I've read the pipelines haven't been cleaned out for decades and are half full of oily sediment. Trying to decommission a rusted up, sludgy pipeline is certain to spread oily sludge. In many cases I think the infrastructure will just be abandoned.

posted on Aug, 5 2016 @ 01:43 AM
a reply to: TheShippingForecast

As profitability drops the larger companies try to sell off their ageing assets to the smaller companies who cannot pay the full cost of decommissioning.

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