Posted September 17, 2010
The oil industry calls idle wells and drilling platforms “old iron.” “Old” as in out of mind and ignored; “iron” as maybe rusting away. There are literally thousands of “old iron” wells and platforms in the Gulf of Mexico and elsewhere.
This week, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) issued a Notice to Lessees, NTL 2010-G-05, to take care of the problem of “oil iron” before some rusting hulk disintegrates and creates another catastrophe the scope of the BP Macondo blowout. We at NRDC were very pleased to see BOEMRE acting to fix this problem before a disaster occurs, rather than simply reacting to events as is so often the case in the regulatory world – passage of the Oil Pollution Act of 1990 after the 1989 Exxon Valdez accident being a typical example.
BOEMRE studied this issued and found that:
[T]here are a significant number of idle platforms that have not been removed and idle wells that have not been permanently plugged. This idle infrastructure poses a potential threat to the OCS environment and is a financial liability to you and possibly the Federal government if subsequently destroyed or damaged in a future event such as a hurricane. The cost and time to permanently plug wells and remove storm-damaged infrastructure (including pipelines) is significantly higher than decommissioning assets that are not damaged when decommissioned. These increased costs have potential ramifications on financial security requirements and may even impact the future viability of your company.
There are extremely detailed regulations already on the books describing how to plug and abandon a well; take a look at 30 CFR 250.1715 et seq. if you’re interested. The problem is that enforcement has been lacking. What BOEMRE has done in this NTL is to give oil companies a firm schedule to comply with these regulations if the companies have wells or platforms that have been unused for a specified number of years.
This is entirely positive. I hope that Congress will see fit to give BOEMRE the budget necessary to make sure that “old iron” doesn’t turn into a new disaster.