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To View Or Download Complete Publication OCS Study BOEMRE 2011-028 Coastal Marine Institute Assessment of Opportunities for Alternative Uses of Hydrocarbon Infrastructure in the Gulf of Mexico U.S. Department of the Interior Bureau of Ocean Energy Management, Cooperative Agreement Regulation and Enforcement Coastal Marine Institute Gulf of Mexico OCS Region Louisiana State University OCS Study BOEMRE 2011-028 Coastal Marine Institute Assessment of Opportunities for Alternative Uses of Hydrocarbon Infrastructure in the Gulf of Mexico Authors Mark J. Kaiser Brian Snyder Allan G. Pulsipher July 2011 Prepared under BOEMRE Cooperative Agreement 1435-01-04-CA-32806-39314 (M05AC12278) by Louisiana State University Center for Energy Studies Baton Rouge, Louisiana 70803 Published by U.S. Department of the Interior Cooperative Agreement Bureau of Ocean Energy Management, Coastal Marine Institute Regulation and Enforcement Louisiana State University Gulf of Mexico OCS Region DISCLAIMER This report was prepared under contract between the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) and Louisiana State University’s Center for Energy Studies. This report has been technically reviewed by the BOEMRE, and it has been approved for publication. Approval does not signify that the contents necessarily reflect the views and policies of the BOEMRE, nor does mention of trade names or commercial products constitute endorsement or recommendation for use. It is, however, exempt from review and compliance with the BOEMRE editorial standards. REPORT AVAILABILITY This report is available only in compact disc format from the Bureau of Ocean Energy Management, Regulation and Enforcement, Gulf of Mexico OCS Region, at a charge of $15.00, by referencing OCS Study BOEMRE 2011-028. The report may be downloaded from the BOEMRE website through the Environmental Studies Program Information System (ESPIS). You will be able to obtain this report also from the National Technical Information Service in the near future. Here are the addresses. You may also inspect copies at selected Federal Depository Libraries. U.S. Department of the Interior U.S. Department of Commerce Bureau of Ocean Energy Management, National Technical Information Service Regulation and Enforcement 5285 Port Royal Road Gulf of Mexico OCS Region Springfield, Virginia 22161 Public Information Office (MS 5034) Phone: (703) 605-6040 1201 Elmwood Park Boulevard Fax: (703) 605-6900 New Orleans, Louisiana 70123-2394 Email: [email protected] Telephone requests may be placed at (504) 736-2519, 1-800-200-GULF, or Rush Orders: 1-800-553-6847 Fax: (504) 736-2620 CITATION Kaiser, M.J., B. Snyder, and A.G. Pulsipher. 2011. Assessment of opportunities for alternative uses of hydrocarbon infrastructure in the Gulf of Mexico. U.S. Dept. of the Interior, Bureau of Ocean Energy Management, Regulation and Enforcement, Gulf of Mexico OCS Region, New Orleans, LA. OCS Study BOEMRE 2011-028. 278 pp. ABOUT THE COVER Sources: Talisman Energy, 2008; National Geographic, 2009; Reggio, 1996. iii ABSTRACT When an operator is granted a lease to develop oil and gas resources on the Outer Continental Shelf in the Gulf of Mexico, they are required to remove structures within one year of the end of production on the lease. There are approximately 3,507 offshore oil and gas structures in the Gulf as of January 2011. Over the next decade, the number of structures is expected to decline by about 1,500, thus, there is a great deal of interest among both regulators and operators in finding new uses for these structures. Currently, most of the offshore structures that have been decommissioned are brought to shore and stored or used for scrap with a small number being reused in new developments. Artificial reef programs in Louisiana and Texas accept a modest number of platforms. The most likely alternative applications are as bases for mariculture or foundations for offshore wind farms. In this report we analyze the relative merits of each of these uses and potential uses based on their technological and economic feasibility. In short, platform based mariculture, while technically feasible, is plagued by economic issues that make it unlikely to be profitable in the near-term, while oil and gas infrastructure is generally not suited for the offshore wind industry due to scale economies and several other technical issues. It is possible that both mariculture and offshore wind could use oil and gas infrastructure in the future, and we discuss the circumstances under which this might occur. We find that only the use of platforms as artificial reefs is a realistic near term destination for existing infrastructure. v TABLE OF CONTENTS Page LIST OF FIGURES ...................................................................................................................... xv LIST OF TABLES....................................................................................................................... xix EXECUTIVE SUMMARY ............................................................................................................ 1 1. USE OF OFFSHORE PLATFORMS FOR ARTIFICIAL REEFS.......................................... 3 1.1. National Fishing Enhancement Act.................................................................................. 3 1.2. Types of Offshore Facilities ............................................................................................. 4 1.3. Stages of Oil and Gas Development................................................................................. 5 1.3.1. Produce................................................................................................................... 5 1.3.2. Invest/Divest...........................................................................................................5 1.3.3. Abandon.................................................................................................................6 1.3.4. Decommission........................................................................................................ 6 1.4. Regulatory Requirements ................................................................................................. 6 1.4.1. Legislation.............................................................................................................. 7 1.4.2. Permit Agencies...................................................................................................... 7 1.4.3. Aids to Navigation.................................................................................................. 8 1.5. Decommissioning Decision Tree...................................................................................... 8 1.6. Stages of Decommissioning ............................................................................................. 9 1.6.1. Planning and Permitting ......................................................................................... 9 1.6.2. Plug and Abandonment .......................................................................................... 9 1.6.3. Preparation............................................................................................................ 10 1.6.4. Pipeline Abandonment ......................................................................................... 10 1.6.5. Structure Removal................................................................................................ 10 1.6.6. Site Clearance and Verification............................................................................ 11 1.7. Factor Description.......................................................................................................... 11 1.7.1. Complexity ........................................................................................................... 12 1.7.2. Location................................................................................................................ 12 1.7.3. Water Depth.......................................................................................................... 12 1.7.4. Removal Method .................................................................................................. 13 1.7.5. Exogenous Events ................................................................................................ 13 1.7.6. Tow Distance........................................................................................................ 13 1.7.7. Scale Economics................................................................................................... 13 2. LOUISIANA ARTIFICIAL REEF PROGRAM.................................................................... 15 2.1. Background..................................................................................................................... 15 2.1.1. Donation Requirements........................................................................................ 15 2.1.2. Liability................................................................................................................ 15 2.1.3. Artificial Reef Planning Areas ............................................................................. 16 vii TABLE OF CONTENTS (continued) Page 2.2. Descriptive Statistics ...................................................................................................... 16 2.2.1. Structure Donation................................................................................................ 16 2.2.2. Program Statistics................................................................................................
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