What the Regulations Require and How Decommissioning Differs
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What the Regulations Require and How Decommissioning Differs Between the Pacific and Gulf of Mexico LSU Journal of Energy Law and Resources Decommissioning Symposium February 15, 2019 1 Agenda u Offshore Federal Jurisdiction u Offshore Well, Platforms and Pipelines u Decommissioning Obligations & Regulations u Gulf of Mexico & Pacific OCS Regions u Idle Iron u Decommissioning Project Execution u Rigs to Reef Decommissioning Option u Final Results u Questions 2 Offshore Federal Jurisdiction 3 Government Controlled Offshore Lands United States - Exclusive Economic Zone (3 Billion Acres – 4.1 Million Sq. Miles) Source: DOI Source: BOEM Offshore Jurisdiction Source: Dept. of Interior Source: DOI Offshore Wells, Platforms and Pipelines 6 Shallow Water Three Pile Platform Multi-Platform Complex 7 Deepwater Semi-Submersible Production Platform Deepwater Production System Layout Deep Draft Semi-Submersible Facility with Subsea Wells Field 1 Field 2 Decommissioning Obligations and Regulations 10 Decommissioning Obligations u Decommissioning is the process of ending offshore oil and gas operations at an offshore platform and returning the ocean and seafloor to its pre-lease condition. u The Outer Continental Shelf Lands Act (OCSLA) and implementing regulations establish decommissioning obligations to which an operator must commit when they sign an offshore lease under the OCSLA, including the requirement to apply for and obtain a permit for subsequent removal of platforms. u Outer Continental Shelf leases typically require the operator to remove seafloor obstructions, such as offshore platforms, within one year of lease termination, or prior to termination of the lease if either the operator or the Department of the Interior deems the structure unsafe, obsolete, or no longer useful for operations (Idle Iron). 11 Source: BSEE OCS Lease Form – BOEM 2005 (February 2017) Sec. 22. Decommissioning. a) When wells, platforms, pipelines or other facilities are no longer useful for operations, the Lessee shall permanently plug such wells, remove such platforms and other facilities, decommission such pipelines, and clear the seafloor of all associated obstructions created by the lease operations. b) The Secretary may determine that a well, platform, pipeline or other facility is no longer useful and require its immediate decommissioning. c) All platforms and other facilities shall be removed within 1 year after the lease terminates unless the Lessor grants approval to conduct other activities. d) All decommissioning operations shall be conducted in accordance with applicable laws and regulations and in a manner that is safe, does not unreasonably interfere with other uses of the OCS, and does not cause undue or serious harm or damage to the human, marine, or coastal environment. 12 Source: BOEM Decommissioning Obligations u The OCSLA regulatory and lease requirements for decommissioning offshore platforms are designed to minimize the environmental and safety risks inherent in leaving unused structures in the ocean, and to reduce the potential for conflicts with other users of the Federal OCS (i.e., commercial fishing/aquaculture, military activities, transportation industry, other oil and gas/renewable energy operations, etc.). u Decommissioning an offshore platform generally entails: § Plugging all wells supported by the platform and severing the well casings 15 feet below the mudline; § Cleaning and removing all production and pipeline risers supported by the platform; Removing the platform from its foundation by severing all bottom-founded components at least 15 feet below the mudline; § Disposing the platform in a scrap yard or fabrication yard, or placing the platform jacket at an artificial reef site; and § Performing site clearance verification at the platform location or subsea production center(s) to ensure that no debris or potential obstructions to other users of the OCS remain. 13 Source: BSEE Bureau of Safety and Environmental Enforcement (BSEE) u The BSEE is responsible for overseeing the decommissioning of any well, facilities, pipelines and other equipment installed offshore in federal waters supporting energy development. u BSEE identifies decommissioning as the process of ending oil, gas, or sulphur operations and returning the lease or pipeline right-of-way to a condition specified by regulatory requirements. u The BSEE works to ensure that obsolete structures and components are cleared from the site to prevent use conflicts. To avoid release of hydrocarbons to the environment, wells are plugged and cut below the mud line and pipelines removed or internally cleaned and prepared for abandonment in place. u The BSEE supports and encourages the reuse of obsolete offshore petroleum structures as artificial reefs in US waters as long as the structure does not pose an unreasonable impediment to future mineral development and other OCS use. § Reuse must comply with the artificial reef permitting requirements of the Corps of Engineers and the criteria in the National Artificial Reef Plan. § The state agency responsible for managing marine fisheries resources must accept liability for the structure before BSEE will release the Federal lessee from lease obligations. 14 Decommissioning Compliance u BSEE requires that operators obtain approval of the platform removal methodology prior to removal of the platform through an application process. u To satisfy National Environmental Policy Act (NEPA) obligations, the Bureau of Ocean Energy Management (BOEM) prepares a site-specific environmental assessment/environmental impact statement for each removal application on behalf of BSEE. u BSEE ensures any environmental assessment is adequate and imposes any necessary protective mitigation measures as conditions of permit approval. 15 Decommissioning Regulations Title 30 Code of Federal Regulations, Part 250, Subpart Q, § 250.1700 – 250.1754 ------------------------------------------ § 250.1701 Who must meet the decommissioning obligations in this subpart? (a) Lessees and owners of operating rights are jointly and severally responsible for meeting decommissioning obligations for facilities on leases, including the obligations related to lease-term pipelines, as the obligations accrue and until each obligation is met. (b) All holders of a right-of-way are jointly and severally liable for meeting decommissioning obligations for facilities on their right-of-way, including right- of-way pipelines, as the obligations accrue and until each obligation is met. 16 Decommissioning Regulations (cont.) u § 250.1702 When do I accrue decommissioning obligations? § You accrue decommissioning obligations when you do any of the following: a) Drill a well; b) Install a platform, pipeline, or other facility; c) Create an obstruction to other users of the OCS; d) Are or become a lessee or the owner of operating rights of a lease on which there is a well that has not been permanently plugged according to this subpart, a platform, a lease term pipe-line, or other facility, or an obstruction; e) Are or become the holder of a pipeline right-of-way on which there is a pipeline, platform, or other facility, or an obstruction; or f) Re-enter a well that was previously plugged according to this subpart 17 Decommissioning Regulations (cont.) u § 250.1703 What are the general requirements for decommissioning? § When your facilities are no longer useful for operations, you must: a) Get approval from the appropriate District Manager before decommissioning wells and from the Regional Supervisor before decommissioning platforms and pipelines or other facilities; b) Permanently plug all wells. Permanently installed packers and bridge plugs must comply with API Spec. 11D1 (as incorporated by reference in § 250.198); c) Remove all platforms and other facilities, except as provided in §§ 250.1725(a) and 250.1730. d) Decommission all pipelines; e) Clear the seafloor of all obstructions created by your lease and pipeline right-of-way operations; f) Follow all applicable requirements of subpart G of this part; and g) Conduct all decommissioning activities in a manner that is safe, does not unreasonably interfere with other uses of the OCS, and does not cause undue or serious harm or damage to the human, marine, or coastal environment. 18 Decommissioning Regulations (cont.) u § 250.1716 To what depth must I remove wellheads and casings? a) Unless the District Manager approves an alternate depth under paragraph (b) of this section, you must remove all wellheads and casings to at least 15 feet below the mud line. b) The District Manager may approve an alternate removal depth if: 1. The wellhead or casing would not become an obstruction to other users of the seafloor or area, and geotechnical and other information you provide demonstrate that erosional processes capable of exposing the obstructions are not expected; or 2. You determine, and BSEE concurs, that you must use divers, and the seafloor sediment stability poses safety concerns; or 3. The water depth is greater than 800 meters (2,624 feet). 19 Decommissioning Regulations (cont.) u § 250.1725 When do I have to remove platforms and other facilities? § You must remove all platforms and other facilities within 1 year after the lease or pipeline right-of-way terminates, unless you receive approval to maintain the structure to conduct other activities. Platforms include production platforms, well jackets, single- well caissons, and pipeline accessory platforms. u § 250.1728 To what depth must I remove a platform or other facility?