Article from: OGEL 2 (2018), in Editorial
It is our privilege to have been the guest editors of the OGEL special issue on the decommissioning of offshore energy installations.
With thousands of offshore oil and gas platforms in place across the globe, the decommissioning of these ageing installations is becoming of increasing concern to regulators, industry, and other stakeholders in the marine environment. Although a relatively recent addition to the marine environment, offshore wind energy installations will also require decommissioning when these structures reach the end of their useful life. Decommissioning involves a range of economic, social, environmental, health and safety issues that must be addressed and managed by governments, industry and regulators. Highlighting the importance of decommissioning, some jurisdictions (such as Norway) require plans for decommissioning before field development and production can even begin. It is against this backdrop of increasing awareness and importance of decommissioning that we commend to you this special issue.
The fundamental issues to be addressed by national laws for decommissioning are, first, whether legal regimes should require full removal, or allow partial removal of installations; and secondly, whether, and to what extent, responsibility and liability should rest with licenceholders/operators, or the state. Resolving these questions gives rise to a host of issues to be addressed, and these issues are often interdependent.
Whether facilities should be partially or completely removed will depend on many factors: the environmental costs and benefits associated with full and partial removal; opportunities for the re-use of installations and equipment; recycling and waste management facilities; and environment, health and safety risk assessments. Issues of liability include residual liability following transfer or surrender of a lease/licence, and historical liability; who is to fund decommissioning programmes, and how; the provision of financial assurance; the exposure for government if costs are tax deductible; and contractual obligations between parties, in joint operating agreements, and in the case of assignment and withdrawal.
A robust and transparent legislative and regulatory regime, including for the assessment and approval of decommissioning programmes, is essential. The decommissioning of oil and gas installations is regulated by national laws, developed within the context of international law. The offshore oil industry, and national legislative and regulatory petroleum regimes, are in different stages of maturity in different countries. Norway, the UK and the US, with their mature oil industries, experience in decommissioning, and developed legal frameworks, are seen as 'leading' jurisdictions. Regions with little or no experience of decommissioning, particularly in the Asia-Pacific and Africa, are looking to these mature jurisdictions to see if there are any lessons that can be learned from the legal and regulatory frameworks and experiences in these countries.
Much has been written elsewhere about the international legal framework governing the decommissioning of offshore energy installations. With special permission from the author and publisher, we have reprinted in this special issue petroleum law expert John Paterson's 2015 article in the AMPLA Yearbook on the international legal framework for decommissioning, entitled 'Decommissioning Offshore Installations: International, Regional and Domestic Legal Regimes in the Light of Emergent Commercial, Political, Environmental and Fiscal Concerns'.
The other papers in this special issue address the adequacy of various national legislative and regulatory regimes concerning decommissioning of offshore installations, which are at different states of maturity. Buford Pollett provides an examination of the legal framework in the US, and recent regulatory changes that might substantially change the profile of companies investing and operating on the OCS, as well as the way investors view the US offshore regulatory environment. Argyro Kepesidi examines the legislation of both the US and UK, to assess the feasibility of adopting the 'rigs-to-reefs system' in the UK.
This special issue also includes papers that examine the adequacy of legal frameworks regulating decommissioning of oil installations in the less mature offshore regimes. David Beckstead's article provides a critical examination of Thailand's legal and regulatory regime for decommissioning, and, through the lens of Thailand's experience, prescribes lessons to be learned for less-mature markets. Juliet Komugisa and Ngozi Chinwa Ole provide a description and critique of the Ugandan law, focussing on issues of liability and financial assurance, and discuss the UK Legal Framework on decommissioning, to see what lessons may be learned to improve the Ugandan regime. After critically examining the current legal and regulatory framework governing the decommissioning of offshore oil installations in Nigeria, Dickson Ebikabowei Omukoro examines the UK's regime to consider if there are lessons that can be learned in developing a comprehensive and efficient decommissioning regime in Nigeria.
With special permission from the authors and publishers, we also reprint seminal 2015 article by Stuart Barrymore and Alexander Butler in the AMPLA Yearbook, 'Decommissioning Facilities in Australia's Offshore Areas - Whose Responsibility?'. While there have been new two new Australian Guidelines published since the date of publication, one an industry guideline of the Australian Petroleum Production and Exploration Association (APPEA, Offshore Oil and Gas Decommissioning Decision-Making Guidelines, 2016) and the other a new government guideline to the legislative regime on decommissioning (Department of Industry, Innovation and Science, Offshore Petroleum Decommissioning Guideline, 17 January 2018), the legislative position remains essentially unchanged since the date of publication.
While most of the papers in this special focus on offshore oil installations, the adequacy of legal frameworks governing the decommissioning of offshore wind energy are becoming of increasing interest. The decommissioning of offshore wind farms is a relatively new topic, and one that will receive more attention as the industry grows across the globe and existing installations come to the end of their useful life. Offshore wind energy will face many of the same issues in relation to decommissioning that confront the offshore oil industry. In their article, Ruven Fleming, Heyd Más, and Ceciel Nieuwenhout compare regulatory frameworks and practices on the management of waste from offshore wind farms under international law and regional/European law, as well as the national laws of two countries with large installed capacities: the UK and Denmark. The article concludes with recommendations on how to improve the international and national waste management arrangements for offshore wind farms.
We hope that you enjoy the breadth and depth of scholarship relating to the decommissioning of offshore energy installations that this special issue brings, and we are sure that this is a topic of great interest that will remain relevant for many years to come.
Alex Wawryk and Tina Hunter