Offshore Wind Can’t Be Allowed to Blow Off Decommissioning Like Fossil Fuel Industry Did
November 21, 2024
Let’s hope government officials don’t make the same mistake with offshore wind as they did with fossil fuels: failing to make sure end-of-life infrastructure is properly decommissioned.
The free market can’t be counted on to do the right the thing.
Millions of oil and methane (natural gas) wells have been drilled, onshore and offshore, in the United States since the mid-1800s. While some of these wells may sit temporarily idle for economic reasons and then be rebooted, a larger number have been abandoned, left to pollute the environment and degrade public health.
The Environmental Protection Agency has estimated there are between 2.3 million and 3 million deserted onshore fossil fuel wells scattered across the United States. The Carbon Tracker Initiative has estimated there are 2.6 million unplugged onshore wells.
These abandoned land-based wells — not to mention those forsaken at sea — spew methane and contaminate surface water and groundwater.
An Environmental Science & Technology policy analysis has noted that the EPA’s estimate may significantly undercount the number of abandoned wells.
“In the industry’s early years, most regulatory programs neither mapped the location of drilled wells nor incentivized operators to decommission sites at the end of their useful lives,” according to the document. “As a result, hundreds of thousands — perhaps more than one million — additional unplugged wells exist but are neither mapped nor accounted for in state and federal inventories.”
The Carbon Tracker Initiative has estimated there are 1.2 million undocumented wells.
In the 20th century, regulatory structures began to emerge. They required operators to decommission well sites at the end of their use. Since insolvent operators may be unable to fund such work, government regulators adopted financial assurance requirements to protect taxpayers from having to cover the expense.
Even so, these requirements are often insufficient to cover the full cost of decommissioning, according to the Environmental Science & Technology analysis. Decommissioning costs for a single well can range from $20,000 to more than $1 million.
By law, companies are responsible for plugging and remediating wells. A ProPublica story published in February explained that drillers are required to set aside funds called bonds, similar to the security deposit on a rental property, that are refunded once their wells are decommissioned or, if they walk away without doing that work, are taken by the government to cover the cost.
But ProPublica reporting found that the money set aside for this work in the 15 states accounting for nearly all of the nation’s oil and gas production covers less than 2% of the projected cleanup costs.
“That shortfall puts taxpayers at risk of picking up the rest of the massive tab to avoid the environmental, economic and public health consequences of aging oil fields,” according to the Feb. 22 story.
ProPublica estimated the taxpayer cost to plug and remediate these wells at $151.3 billion.
For decades, the fossil fuel industry “has taken advantage of toothless federal rules that govern drilling on public lands,” according to a 2023 white paper published by Public Citizen. “The federal government has charged woefully inadequate royalties to compensate taxpayers for oil and gas extraction and failed to require that drilling companies provide adequate financial guarantees to ensure that wells get cleaned up if drillers go bust.”
Last year fossil fuel industry lobbyists and their Washington, D.C., allies rallied against a proposal to strengthen federal requirements to force corporations to cover the cost of remediating drilling sites. (Oil and gas wells can range in depth from a few hundred feet to nearly 4 miles.)
To illustrate the scale of the well-cleanup problem, Public Citizen estimated the potential taxpayer cost of remediating some 89,350 wells on nearly 24 million acres of federal land — based on a Bureau of Land Management estimate for how many existing wells are capable of production — to be between $2.9 billion and $17.7 billion.
“Cleaning up after yourself isn’t just a kindergarten skill, it’s the law. We now know the oil industry isn’t properly dealing with its mess and federal agencies have ignored these risks for years,” Kristen Monsell, oceans legal director at the Center for Biological Diversity, said this summer. “Interior needs to take a hard look at how old leaky wells, rusty platforms and corroding pipelines put the ocean ecosystem at constant risk of spills and other harms. Private companies shouldn’t be allowed to make huge amounts of money drilling in public waters and then leave a wasteland for taxpayers.”
The Center for Biological Diversity, in July, sued the U.S. Department of the Interior over the unexamined risks of overdue decommissioning for thousands of inactive offshore oil and gas wells in the Gulf of Mexico.
At sea, the problem is the same. The fossil fuel industry has neglected thousands of unused oil and gas wells in the Gulf of Mexico that will cost an estimated $30 billion to plug and decommission, according to the Natural Resources Defense Council (NRDC).
The NRDC cited a 2023 study that identified some 14,000 Gulf of Mexico wells, most of which have been idle for at least five years, thus making them unlikely to go back into production. Of those wells, about 7,300 are in federal waters. The remaining ones are in the state waters of Texas, Louisiana, Alabama, and Mississippi.
To address this environmental problem, the Department of the Interior, in April, announced a final rule to protect taxpayers from covering costs that should be borne by the oil and gas industry when offshore platforms require decommissioning.
The action, which updated 20-year-old regulations, strengthened financial assurance requirements for the fossil fuel industry operating on the U.S. Outer Continental Shelf.
Soon thereafter, three states — Texas, Louisiana, and Mississippi — sued the federal government to block the proposed rule by the Biden administration that would require offshore oil and gas operations to provide nearly $7 billion in financial assurances for decommissioning old infrastructure.
Apparently, elected officials in those states don’t mind if taxpayers pay the tab, or, more likely, don’t care about the environmental harm being caused.
“Over years, corrosion and storms can damage abandoned infrastructure, making leaks increasingly likely,” according to the NRDC. “Oil is toxic to a variety of marine creatures, including fish and shrimp. By harming sea life, oil leaks also threaten the livelihoods of fishers and coastal communities — including those who fish commercially, for recreation, or for subsistence.”
The two agencies responsible for managing offshore fossil fuel development in federal waters — the Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE) — have “historically failed to both ensure that oil and gas platforms and pipelines are removed from the ocean and that oil and gas operators are capable of paying for the cost of decommissioning,” according to the NRDC.
The study published in Nature Energy last year found that there are more unplugged and non-producing oil and gas wells than currently active wells in the Gulf of Mexico.
Federal law for decommissioning requires that within a year after the termination of a lease wells must be permanently plugged and all platforms and facilities must be removed; all pipelines decommissioned; and the seafloor cleared of all obstructions.
These regulations, however, allow fossil fuel operators to leave pipelines on the seafloor — a process known as “decommissioning in place.” This process is only allowed in select circumstances, such as when a pipeline will not obstruct navigation or commercial fishing operations.
In 2021, however, the Government Accountability Office (GAO) reported that since the 1960s, BSEE has allowed the fossil fuel industry to leave 97% of pipeline length, nearly 18,000 miles, on the seafloor of the Gulf of Mexico.
As of last year, according to the GAO, there were about 2,700 abandoned wells and 500 offshore platforms in the Gulf of Mexico that were past due for decommissioning. In a report issued early this year, GAO concluded that the BSEE was “ineffective” in enforcing the rules for cleaning up old offshore fossil fuel sites.
Off the coast of California, the decommissioning of Platform Holly, after its owner filed for bankruptcy, has cost the state about $65 million. The state also is bearing the full cost to decommission wells on Rincon Pier, because of operator bankruptcy, and has appropriated nearly $51 million to fund that cleanup work.
When it comes to managing offshore wind, BOEM is the agency with the most clout. The federal agency “requires leaseholders to prepare conceptual decommissioning plans when their project is first proposed and requires more detailed plans for evaluation at the time decommissioning is requested.”
A 2022 white paper provides an overview of the processes, regulatory requirements, and financial assurances imposed by BOEM for decommissioning offshore wind facilities.
As early as two years before the expiration of the lease or as late as 90 days after the expiration, the lessee must submit a decommissioning application to BOEM for approval. The application must include identification and description of the facilities, cables, and/or pipelines designated for removal; a proposed decommissioning schedule; a description of removal methods and procedures; and plans for the transportation and disposal or salvage of decommissioned material.
If a lessee fails to decommission an installation, BOEM “will issue all relevant parties a notice of noncompliance”; “has the authority to call for the forfeiture of the financial assurance”; “holds the lessee or grantee liable for all removal and disposal costs and any accidents or damages that occur from their failure to decommission”; and “may assess civil or criminal penalties.”
Serious threats, but words are meaningless unless they are backed up with action.
I reached out to both BOEM and Rhode Island’s Coastal Resources Management Council to speak with someone about the process used to make sure offshore turbines are removed when their time is up, with a specific interest in the projects being developed in southern New England marine waters.
BOEM eventually responded by copying and pasting information that can be found online. CRMC initially acknowledged my request but never responded further or made anyone available for an interview.
No wonder trust in government is historically low. I asked for information and a conversation because the public cares, not to fill time in my work schedule.
Note: The longest oil spill in U.S. history — it lasted nearly two decades — originated from an abandoned offshore well in the Gulf of Mexico, about 10 miles off the coast of Louisiana. A fixed offshore platform began leaking in 2004 when Hurricane Ivan struck. It leaked oil until 2022.
Frank Carini can be reached at [email protected]. His opinions don’t reflect those of ecoRI News.
Thank you so much for the in-depth article and your articles in the past!
Please keep them coming!
Happy days! Paula S
Shocking numbers. Shocking costs to decommission. Now extrapolate that worldwide.
Your article fails to mention that ALL offshore wind lessees have had their decommissioning bonds WAIVED by BOEM because their projects would otherwise be uneconomic to the DEVELOPER – ie ORSTED, AVANGRID, etc. – setting the taxpayers up to underwrite the cleanup. Revolution Wind, Sunrise, Southcoast etc. all had their decommissioning bonds waived by BOEM. You can do better reporting- Vineyard Wind’s blade failure is still polluting the coastline – wait til these behemoths start to breakdown. BOEM IS RECKLESSLY PERMITTING OSW and the pro wind faction, including ECO-NEWS is silent.
B Vitton is a tool for the oil industry and wants to kill the planet. The pollution from broken turbine blades in orders of magnitude less than that from oil wells.
The Liar in Chief will immediately change the rules for Offshore Wind, making them have to jump over higher hurdles than his financiers from the Big Oil industry. The net effect of wind site issues compared to oil sites is so different it is truly an apples to oranges comparison. The anti-wind crew should be more worked up about oil and trash in the ocean than windmills. The U.S. National Oceanic and Atmospheric Administration reported 172 incidents in 2021 in which oil products were released to the environment, ranging in size from 2 to 1,000,000 gallons. These incidents involve both commercial (barges, fishing vessels) and recreational vessels. Satellite images of the ocean surface suggest that many additional spills are not reported and thus not measured.
Thank you for bringing all that to light, Frank. I have always had concerns about the upkeep and decommissioning of the offshore wind turbines because I’ve seen the fields of decrepit, leaking onshore turbines near Palm Springs, California.
Accusing someone of being “a tool for the oil industry”, etc. because they believe BOEM should follow the law is totally unsupported and highly unhelpful. Would Mr. Gerritt please reveal the hard evidence of his claim?
The offshore wind developers cited that their insurance policies would cover the cost of decommissioning if there was an early reason for that. BOEM has required that a decommissioning the bond is posted at year 15 up to 10 years before the end of the project lifetime. a decommissioning bond will have to be produced in time.