Expert interview: Could legal issues prevent North sea oil & gas infrastructure being reused for CO2 storage?

Interview with Joris Gazendam LL.M (left) of Groningen Centre of Energy Law, University of Groningen. Main photo: Kjetil Alsvik/Equinor

By Tom Mikunda, TNO

Over the next decade, many North Sea oil and gas fields will reach the end of their economic life cycle. The offshore infrastructure that has been constructed to allow the extraction of hydrocarbons, and transport them to shore, is planned for decommissioning and dismantling. On the Dutch continental shelf alone, this includes some 160 platforms, 640 wells and 3,000 kilometres of pipeline. Depending on the location, operational lifetime and condition of this infrastructure, its reuse for CO2 transport and storage could reduce project development costs and potentially accelerate deployment.

Although the re-use of oil and gas assets is deemed technically feasible, the legality of doing so raises questions. In Work Package 3 (WP3) of the ALIGN-CCUS project, legal researchers at the Groningen Centre of Energy Law are working towards establishing the current legal situation around the delayed decommissioning of offshore infrastructure and reuse for other activities. Recently, the ALIGN-CCUS dissemination team caught up with Joris Gazendam, the lead researcher at Groningen, to get an update of work completed to date.

 

  • What are the specific objectives of your work in ALIGN-CCUS?

Our work is centered around two key objectives, which we think are paramount to be able to provide a clear overview of the current situation around the reuse of offshore infrastructure. Firstly, we aim to provide an assessment on the level of flexibility given in international and national law, to allow the postponement of decommissioning. Secondly, we aim to make a comparison between the different legal regimes in the Netherlands, Norway and the UK, to identify if and how, any flexibility has been built into the national frameworks to allow reuse. These combined activities should allow us to provide a set of recommendations for potential options for governments to consider if faced with requests from industry to allow the temporary postponement of decommissioning.   

  • What laws govern the development and removal of offshore infrastructure?

The United Nations Convention on the Law of the Sea (UNCLOS), established in 1982, is the primary legal framework that stipulates the removal of offshore infrastructure. The law states that unused infrastructure should be subject to abandonment, defined as the process of dismantling and disposal. This international law has been transposed into the national legal acts of the parties to UNCLOS. For the three countries of focus in WP3, the Netherlands, the UK and Norway, oil and gas operators are required to submit plans for decommissioning of offshore assets between two to five years in advance of the end of production. The competent authorities have the obligation to check and approve the plans, to ensure the decommissioning is conducted in a timely and safe manner. Generally speaking, the decommissioning process has to start within two years of the end of production.

  • Are there any noticeable differences in the legal frameworks of the 3 countries being assessed?

Although research is at an early stage, with final results due in summer 2019, our initial assessment indicates that the competent authorities in Norway and the UK have a greater level of discretion in whether to allow installations and pipelines to remain in place. This flexibility could be useful when planning for offshore CO2 infrastructure. In the final report, more details will be provided on the specific legal documents where this flexibility has been identified.

  • In your opinion, where do you see the greatest challenges for the reuse of offshore assets for CO2 storage?

I think the main issues are timing and the related uncertainty of demand. There is currently no business case for CO2 storage in the North Sea, and there are few companies willing to become CO2 storage operators at this time. If infrastructure is to be reused, both potential operators and regulators alike will need some form of certainty that a platform, pipeline or well is definitely part of the future CCS project. I cannot see a regulator agreeing to the postponement of decommissioning for an indefinite period of time, or oil and gas operators willing to pay for mothballing and maintenance of assets without certainty of reuse.      

  • Can you see any solutions at this stage?

In our opinion there has to be a role for the government in managing any process regarding postponement of decommissioning. Of course, one of the roles for government will be to provide a level of flexibility to oil and gas operators for them to consider postponement. However, without a clear push from industry, this issue may not be given priority by lawmakers. Nevertheless, in ALIGN-CCUS, we are exploring ideas on how to solve the temporal gap between cessation of production and use of infrastructure for CO2 storage.

Joris Gazendam LLM holds a Master in legal research and Dutch law, and is currently completing his PhD on offshore wind energy with cross-border interconnectors.