Australia isn’t equipped to handle redundant fossil fuel rigs

Labor has confronted stress from all instructions this 12 months relating to offshore fossil gasoline tasks. The federal government appeared to sneak via laws that makes it simpler for these tasks to get round environmental regulation, earlier than bowing to inner lobbying and reinstating Atmosphere Minister Tanya Plibersek’s capability to veto tasks. Past that, the query stays: what occurs to the challenge infrastructure if and after we lastly section out fossil fuels?

The Institute for Vitality Economics and Monetary Evaluation recognized greater than 1,000 wells and 57 fastened amenities offshore which are nearing their finish, leading to what trade physique the Centre of Decommissioning Australia estimates can be 5.7 million tonnes of fabric to be handled. The Nationwide Offshore Petroleum Security and Environmental Administration Authority (NOPSEMA) says the method can be “advanced, costly, span a few years and introduce many new and important security, environmental and nicely integrity dangers”. The prices are eye-watering: $60 billion, as estimated in late 2023 by the Division of Business, Science and Assets.

The place is all these things?

As this map reveals, there are rigs throughout Australian waters, with the best concentrations off the coast of Western Australia and within the Bass Strait between Victoria and Tasmania.

This can be a world problem — greater than 70% of the world’s oil and fuel manufacturing makes use of ageing infrastructure, exploiting fields which are, because the Lowy Institute places it, “quickly approaching their financial restrict”. The Commonwealth Secretariat, in an early 2023 examine, estimated greater than 50,000 offshore wells can be decommissioned worldwide by 2040.

Lack of understanding

It tells its personal story that in 2023 Australia’s Business Division was nonetheless placing collectively paperwork with names like “Roadmap to determine an Australian decommissioning trade” — the infrastructure is previous and decrepit, however the trade for coping with it’s in its infancy. Shareholder advocacy group the Australasian Centre for Company Accountability (ACCR) put out a 2023 report on decommissioning that identifies Australia’s inexperience, involving the huge variation of “operator preparedness”, as one of many main dangers.

Once more, that is a global problem — because the Commonwealth Secretariat put it in its 2023 evaluation: “Relative to different oil and fuel actions, decommissioning is at an infancy stage with restricted nation and firm expertise. Decommissioning carries important environmental and security dangers which must be factored throughout everything of a challenge’s life cycle.”

This makes the true extent of the prices of decommissioning laborious to foretell. The ACCR’s report cited evaluation of chosen offshore oil and fuel platform decommissioning tasks within the North Sea that discovered the common precise price was about 76% larger than had been estimated.

Poisonous reefs?

Firms equivalent to ExxonMobil and Woodside try to go away nice chunks of those partially dismantled platforms within the sea as “synthetic reefs”. These stays comprise mercury, lead, hydrocarbons and naturally occurring radioactive supplies (identified by the marginally deceptive acronym NORM), rendering the ocean life “too harmful to eat”, in accordance with Buddies of the Earth Offshore Fossil Fuel campaigner Jeff Waters.

Diplomatic tensions

If you happen to have been on the lookout for a synecdoche of all the issues related to decommissioning, look no additional than the Northern Endeavour. The rust-covered oil rig has already price taxpayers a whole bunch of hundreds of thousands of {dollars} and will price as much as a billion to be packed up and towed away for scrap.

Now redundant, the Northern Endeavour was run by Woodside till 2016, at which level it was offered to a small, inexperienced firm referred to as North Oil and Fuel Australia (NOGA). By 2019, after a sequence of environmental and work security notices from NOPSEMA, the rig was pressured to close down. The choice to promote to NOGA, an organization that would not afford to decommission the ageing facility, was slammed by everybody from Greenpeace to Chevron. NOGA went into liquidation and the federal government is now on the hook to complete the job.

So there’s that, however it’s additionally essentially the most outstanding instance of the opposite threat of offshore rigs: worldwide relations. The Northern Endeavour is topic to a weird set of contradictory guidelines; it sits above Australia’s continental shelf for the needs of extraction, however floats on Indonesia’s waters.

“[Northern Endeavour] falls into this very distinctive state of affairs the place Australia is regulating the decommissioning of this facility working on the Australian seabed, however the marine setting and the best curiosity by way of the marine setting is Indonesian somewhat than Australia,” Donald Rothwell, Australian Nationwide College professor of worldwide legislation, informed Crikey.

“So, Australia must be very delicate to the truth that in any decommissioning, the environmental impression will not be such that would set off any considerations on the a part of Indonesia.”

And it will get weirder — the Perth Treaty, which units out the nations’ unique financial zones and was signed by each nations in 1997, has by no means been ratified by Indonesia.

“And in order that creates an extra sensitivity from Australia’s aspect by way of guaranteeing {that a} larger this fully by the e-book and make sure the very highest environmental requirements in any other case,” Rothwell stated.

If there are any stuff-ups, Indonesia may probably pursue compensation for environmental harm, and would doubtless rekindle Indonesia’s intermittent calls to revisit the Perth Treaty (which Indonesia has so far been observing regardless of it having no authorized power), that are closely skewed in the direction of Australia within the present breakdown.

Including to this, Rothwell remarked, is the approaching change of management in Indonesia: “Might a brand new Indonesian authorities search to revisit these points? I feel that’s a sound query to ask.”

Certainly, with dozens of ageing rigs round Australia creakily shuffling in the direction of expiry, it’s considered one of many legitimate questions.