OFFSHORE
Thousands of maritime jobs in the making as oil and gas giants ordered not to trash our oceans.
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ulti-billion-dollar oil and gas players have been winding up and walking away from major offshore projects in Australian waters, leaving tonnes of steel and plastic to pollute the ocean. Now a union push for industry regulation and new government legislation is yielding results, with offshore companies ordered to clean up their act. “It could create thousands of jobs,” said Maritime Union Assistant National secretary Adrian Evans, citing a recent report. National Energy Resources Australia in February found the industry decommissioning bill could come to $52B – mostly labour and vessel hire costs to plug 1008 wells and remove all offshore equipment including 755,000 tonnes of fixed facilities, 6,660km of pipelines, 130 umbilicals 1,500km long and 535 subsea structures. Global energy consultancy group Wood Mackenzie has projected that 65 offshore platforms and seven floating facilities will cease production in Australia by 2026. While oil and gas majors have been required to cover the bill since the sixties, they have failed to do so. This is despite industry profits running into tens of billions of dollars.
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Companies have no incentive to clean up after themselves. There are no profits in decommissioning. They have to be compelled to act. Peter Milne, journalist and former engineer in the oil and gas industry highlights three tactics companies use to avoid cleaning up: selling off aging assets, delaying clean-up
“People are fearful of losing their jobs and don’t want to speak up.” Jack McCabe
until it is unsafe to do so or simply dumping everything in the ocean. These tactics all worked in the companies’ favour until a move by Woodside to avoid the clean-up for the Northern Endeavour oil production vessel in the Timor Sea backfired. Woodside sold the vessel in 2015 for $29M profit to a one-man company Northern Oil and Gas Australia. The company went bust a year later. Responsibility for
removing the vessel then fell to the federal government. To date the cost of keeping the vessel safe and preparing it for decommission is $200M. The final cost is estimated at $1.2B. The government was compelled to act or foot the bill. It commissioned an independent report into the debacle in 2020. The Walker Review found sellers of oil and gas assets should stay liable for clean-up. It made nine recommendations to improve practices, policies and legislation. Some of these recommendations have been adopted. Some have not. First up the government introduced an industry levy of 48 cents per barrel. This will see industry, not the taxpayer foot the clean-up bill. “The changes were a rare case of the fossil fuel industry not getting its way with the Federal Coalition government and have halted a rush by major oil and gas companies to exit ageing Australian assets,” Milne reported. The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has also stepped in, issuing directions with fixed deadlines for wells to be made safe within three years of end of production. Companies then have two years to remove everything from the ocean. www.mua.org.au
