Latest update February 17th, 2025 1:24 PM
Aug 08, 2021 News
Kaieteur News – In a recent article, US based news agency, The Washington Post, highlighted how the negligence of oil companies can exasperate the effects of climate change and how they can hinder the implementation of a solution designed to mitigate those effects.
The newspaper states that the Gulf of Mexico swallows a football field of Louisiana coastline every 100 minutes on average, with islands that have historically acted as barriers to hurricanes headed toward coastal communities losing significant ground. Without them, Louisiana is more vulnerable to climate change and severe weather.
In order to mitigate the effects of encroaching seas, a plan was devised to restore and rebuild the State’s coastline, with geologists estimating that up to 11,000 million cubic meters of sediment are needed to restore the State’s coastline.
That much material had initially posed a logistical hurdle because of its procurement and transport, however the State has opted to utilise the sediment off of Louisiana’s coast, however, there is a problem.
Syed Khalil, a geologist with the State’s Coastal Protection and Restoration Authority put the problems facing the plan into perspective and notes that about 58 percent of the offshore sediment in the gulf that could be used to rebuild Louisiana’s coast is blocked by pipelines. While there is enough sand for the coastal restoration projects that Louisiana has planned in the short term, the State’s fight to fend off rising seas will require more.
“We need every grain of sand for the restoration of coastal Louisiana,” Khalil said.
Other Gulf Coast States are facing the same problem. But the issue has come to a head in Louisiana, where coastal land is disappearing faster than anywhere else in the nation.
Canals dug through the wetlands to build and service pipelines — which create pathways for saltwater to flow into the marsh — are also partly to blame for Louisiana’s coastal erosion. Now, those pipelines, and the companies that owned them, are hindering the solution.
According to The Washington Post, a Houston-based energy company is asking a federal bankruptcy court for permission to walk away from its aging infrastructure in the Gulf of Mexico. Fieldwood Energy LLC is attempting to shift responsibility for removing 1,715 wells, 276 platforms and 281 pipelines to oil and gas companies that previously held leases for the same area, according to court documents. Under existing federal regulations, companies remain liable for decommissioning infrastructure on areas of federally owned seafloor where they previously produced oil and gas. But the former holders of the Fieldwood leases — including Chevron, BP and Shell — are attempting to get out of that obligation because of the cost, estimated at US$9 billion.
The media house notes how familiar the story seems and corroborates this by stating that a recent U.S. Government Accountability Office Report found that oil and gas companies have been allowed to abandon 97 percent of offshore pipelines in place without penalty. The abandoned infrastructure poses environmental concerns, and is blocking access to the sand that Louisiana and other gulf states desperately need to rebuild their coastlines in the face of the rising seas.
The news agency also notes that despite federal regulations requiring the removal of offshore pipelines once they are decommissioned, the rules are rarely enforced. The Bureau of Safety and Environmental Enforcement, the Department agency that regulates offshore energy, has been mostly unsuccessful at getting companies to pay for the removal of pipelines decommissioned in place when they are later determined to be in the way.
The Bureau of Safety and Environmental Enforcement (BSEE) was established after the Deepwater Horizon drilling rig explosion in 2010 to address the conflicting interests of the Minerals Management Service, which was tasked with collecting lease payments from oil and gas companies and enforcing environmental and safety regulations for those same companies.
Megan Milliken Biven, a public policy expert who worked for the Interior Department’s Bureau of Ocean Energy Management (BOEM) has said that oil and gas companies have continued to benefit from lax enforcement for decommissioning pipelines. Additionally, the BSEE allows major oil companies to sell their leases to smaller operators, such as Fieldwood, that lack the resources to clean up when wells are drained.
“There’s no revenue from cleaning up after you, every incentive is to avoid it,” she said, noting that oftentimes, previous pipeline operators have gone bankrupt or have opted to fight the decision by appealing to the Interior Board of Land Appeals.
The previous operators of more than 100 miles of pipelines buried in sediment no longer exist, according to the GAO report. This number is expected to increase as more companies go bankrupt because of a drop in oil prices and the growth of onshore fracking that has priced out offshore gas. The agency has the authority to require removal of previously decommissioned-in-place pipelines when it is determined that the pipeline is an obstruction, but has had difficulty in getting those companies to retroactively remove pipelines because the companies may be bankrupt or liquidated.
This disregard for the effects of climate change by oil companies is not exclusive to the US and appears to be the modus operandi of a whole host of oil and gas companies in various parts of the world. In the Guyana context, ExxonMobil has already indicated that it will set aside over US$220 million by 2024 for decommissioning costs, however, given the frequency of attempts by major oil companies to absolve themselves of responsibility for decommissioning and cleanup efforts, various Guyanese have questioned the decision to have the sums designated for decommissioning costs under the control of the very entity that may very well attempt to escape responsibility in the future by divesting its assets when the operation is near the completion of its life cycle.
Feb 17, 2025
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