Platform Brent Bravo in the Noordzee, in 2019. © Marten van Dijl
North Sea clean up of rotten infrastructure costs billions (but no one wants to pay)
The North Sea is littered with hundreds of drilling platforms, thousands of gas and oil wells and tens of thousands of kilometres of pipelines – all soon to be decommissioned. But whether this fossil graveyard will actually be cleaned up is unclear. An international research team, led by Follow the Money, investigated why and discovered some significant financial and strategic interests. ‘Nobody likes pouring money down the drain.’
What is this article about?
- The closure of several oil and gas fields threatens to turn the North Sea into a giant graveyard full of fossil installations. Old infrastructure should be dismantled and removed after use, but this hardly happens.
- The upcoming energy transition has shifted the focus towards this discussion. Countries and companies with lots of old infrastructure would like to keep it, while parties without it would like to see a clean slate.
Why is this important?
- The North Sea is bustling. Energy companies, shipping companies, fishermen: everyone wants to benefit from the opportunities the sea has to offer. The North Sea is to be a driving force behind the energy transition. The planned big wind farms require much space, space that is becoming increasingly scarce.
- In addition, the North Sea is a unique habitat for plants and animals. This ecosystem is under mounting pressure.
- The various interests are clashing more and more often. Therefore, an investigation into the winners and losers in this battle for the North Sea is sorely needed.
How did FTM investigate this?
- Over the next few years, Follow the Money will conduct international enquiries into the North Sea. This will be the first time the North Sea will be looked into as a whole.
- We are working together with several partners, including NRK (Norway), De Tijd (Belgium) and international non-profit investigative platform DeSmog (United Kingdom). This article is the first in a long-running series to come.
- The project focuses on different aspects of the North Sea (including energy, food, and safety) and is largely based on data research. Data that has never before been pooled and analysed in this way.
A flying yellow protest flag atop a rusty oil platform says: ‘Save the North Sea. Stop Shell!’ Skimming across the waves in inflatable dinghies, activists near their target: a forty storey hulk of abandoned oil infrastructure looming above the steel gray waters. As they brace themselves to climb the platform, men armed with water cannons fire plumes of seawater at them.
It has since become an almost iconic image. In 1995, plans by former Royal Dutch Shell to sink the Brent Spar to the bottom of the ocean made world news. Despite the water cannons, Greenpeace activists managed to occupy the platform for a month. At the same time, Shell petrol stations were boycotted in the Netherlands and Germany. In Hamburg, a Shell service station was firebombed.
The global outcry was so big that Shell abandoned its plans to sink the Brent Spar in the North Sea. Even though governments, the oil company and even regulators agreed that the risks invoilved with the operation would be little.
The Brent Spar is the best-known example of a much bigger problem: not one, but hundreds of offshore oil and gas platforms have reached the end of their lifespan. An international investigative team led by Follow the Money is the first to inventory the oil and gas infrastructure in the North Sea, finding out which are still in operation and which should have been removed a long time ago and by whom.
It turns out that although operators are, in principle, obliged to remove all platforms and pipelines and plug the wells after shutting down, this is not happening by a long shot.
Why are the – sometimes abandoned for years – platforms not dismantled and removed? The team investigated and discovered huge financial and strategic interests.
This article is the start of The North Sea Investigations – a multi-year international investigation into the battle for scarce space in the North Sea, led by Follow the Money in collaboration with Norwegian broadcaster NRK, Belgian newspaper De Tijd and the international non-profit investigative platform DeSmog.
What appears to be a big empty expanse of water is, in reality, one of the busiest parts of the sea in the world where all kinds of interests – between companies and governments, nature and exploitation, but also between different countries – are clashing.
What will we investigate?
Energy and wind farm operators, shipping companies, sand miners, fishermen: everyone wants to exploit the ocean’s potential. The North Sea should become the driving force of the energy transition, but at the same time, it is indispensable for the transporting of goods, as a sand mining area for housing construction and dyke reinforcement, and also as a source of income for fishermen and as a unique habitat for plants and animals.
The more plans are made, the scarcer the space and the bigger the (conflicting) national, economic and social interests. The battle for this space comes with a huge price tag. Which interests will national governments and the EU give more weight to? And what are the potential consequences of the choices? Once decisions have been made (injecting CO2 into the ground or installing thousands of wind turbines), billions are spent, and the space is given away. Who are the winners of this battle for the North Sea, and who will lose out?
Why does it matter?
Never before has there been an investigation of the North Sea as a whole. Knowledge about the area is fragmented and often stops at national borders. Reason enough for an in-depth, international investigation into the many clashing plans, agreements and initiatives.
Nobody actually knows
To understand the extent of the problem, it is important to first know what kind of infrastructure lies at the bottom of the sea and what kind of agreements are made. First, international agreements require operators to remove all drilling installations when they are out of commission. This includes demolishing structures above and below the surface, permanently sealing all wellbores with cement plugs, rinsing out pipelines, and burying them in the seabed.
It sounds straightforward, but things then become more complex. On land, every square metre has a designated use and every structure is registered somewhere. But as the data collected by Follow the Money shows: nobody actually knows what all lies in the North Sea. Different bodies – operators, governments, regulators – keep divergent overviews, none of which are complete. What’s more, the definitions of ‘out of use’ vary, not only by country but also by agency.
As a result, it is very unclear which structures should be dismantled and when.
At first glance, the picture seems clear: in particular, many wells have already been decommissioned, but one-third of the pipelines and around 10 per cent of the platforms are also no longer in operation. And it might even be more, as many pipelines that were registered as ‘removed’ are in reality only ‘out of operation’. In other words, even things considered to have been removed may still be sitting there.
The data doesn’t show how long this has been the case. Like the Dutch Ministry of Economic Affairs and Climate Policy explains: ‘Before 1 January 2022 operators could have non-producing wells for years without having to report it.’
What we do know is that the majority of active platforms will soon reach their economic end. So the number of non-operational platforms is only going to increase.
The Dutch regulator, the State Supervision of Mines (SodM), reports that ‘the number of decommissioned wells increases every day.’ But exactly how many are there? No one knows. ‘We do not keep an up-to-date count,’ says a spokesperson. And the Ministry of Economic Affairs and Climate Policy has no idea either: ‘[We have] no overview of platforms that are to be decommissioned this year or in the coming years. This depends on, for example, the production duration,’ a spokesperson emailed.
Jip van Zoonen, consultant and project leader for North Sea permits at Rijkswaterstaat (the executive agency of the Ministry of Infrastructure and Water Management), is not surprised by this lack of overview. In fact, until 20 years ago, there was no registration requirement for cables and pipelines. ‘Cables have been installed in the Dutch part of the North Sea since the mid-nineteenth century, but not all of them have been fully registered. And one does not always know exactly where they are all located or who owns them.’
The government is paying
Nobody knows how big the decommissioning job is, but it is clearly getting bigger by the day. Yet few of the installations on the seabed appear in the decommissioning plans of the various North Sea countries.
The investigation team discovered two reasons for this: one financial and one strategic.
To start with the first: demolishing and removing platforms, wells, and pipelines comes with a hefty price tag.
In 2021, the European Commission estimated the following costs for clean-up work in the North Sea between 2020 and 2030:
- All planned clean-up work combined will cost around 30 billion euros.
- The biggest part of that, 17 billion euros, will be borne by Britain. This country has the most installations.
- Number two is Norway, with an estimated cost of 9.7 billion euros.
- The cost for the Netherlands is estimated at 2.6 billion euros. Denmark will have to pay just under half a billion euros.
Even after 2030, there will still be numerous wells, platforms and installations waiting to be dismantled:
- The Dutch Ministry of Economic Affairs estimates total clean-up costs in the Netherlands at 4,5 billion euros.
- Another 4 billion euros will be added if all pipelines must be removed.
- Still, that is not too bad considering the 44,5 billion pounds the UK has to pay according to calculations by the UK’s North Sea Transition Authority.
In all probability, these huge sums will turn out to be underestimates. Recent surveys show that, so far, decommissioning budgets are regularly exceeded.
Chris Lehouck, CEO of Deco Subsea, one of the largest clean-up companies in Belgium, knows this from experience: ‘The costs can be staggering. Sometimes there are nasty surprises, such as underwater structures overgrown with rock-hard coral or a thick shell crust.’ These cause delays that immediately make the whole job more expensive. ‘For example, the biggest crane vessels – from Heerema or Allseas – already cost 2 million euros per day to deploy.’
Only a small part of this bill is fitted by the oil and gas companies. The governments of North Sea countries end up footing the bill for most of the clean-up costs.
The reason for this is partly because these member states are shareholders in offshore gas and oil extraction operations and partly because of favourable tax agreements. For example, operators are allowed to deduct the cost of planned decommissioning operations from profits subject to tax.
As a result, the Dutch government ends up paying about 73 per cent of the clean-up costs. In Norway, it is 78 per cent, and in the UK, it is between 40 and 75 per cent, depending on the tax agreements with the operators.
The energy transition as a delaying strategy
Delaying infrastructure decommissioning for as long as possible is attractive to every stakeholder – for both governments and companies. The CEO of Deco Subsea acknowledges this too: ‘It’s true that people don’t always have much appetite for decommissioning. It’s like pouring money down the drain; nobody likes doing that. But for a few years now, we have noticed increased efforts.’
In principle, operators must submit a removal plan for the relevant facilities to the responsible ministry within one year after shutting down production. But this is only a paper reality. In practice, getting a permit to delay the clean-up is not difficult.
This is evident from the exemption applications submitted to the Dutch Ministry of Economic Affairs and Climate Policy. Those who indicate that it would be more advantageous to wait a little longer until several platforms and wells can be decommissioned simultaneously are granted a grace period of up to five years for their plan.
The upcoming energy transition also serves as an argument for delay. Operators who indicate that they might want to reuse an installation in the future – for example, pipelines to transport hydrogen or a gas or oil field for storing CO2 – will also receive an extension.
Whether reuse is possible remains to be seen, but just expressing the intention to investigate it buys years in time, evidenced by the already-issued exemptions.
Last year, four operators in the Netherlands were granted such an exemption. TotalEnergies, Neptune, ONE-Dyas and TAQA are allowed to start exploring the potential use of their installations for CO2 storage, among other things. They are thus leaving it in place for the time being. In the UK, six CO2 storage projects are currently underway. Again, big well-known fossil companies like BP, Equinor and Harbour Energy are also involved. When asked, a spokesperson revealed that according to the North Sea Transition Authority (NSTA), there are still 26 projects in the works.
Reuse to drive down costs
Governments believe that the reuse of gas and oil infrastructure will save them a lot of money. The UK is furthest along with its plans in this regard. Pauline Innes, Head of Decommissioning at state-owned NSTA, is keen to stress that reuse is good for the energy transition but also admits that it is financially attractive: ‘The NSTA is committed to supporting industry in embracing decommissioning and repurposing as vital tools in driving the UK’s energy transition. Repurposing makes sound business sense from a cost perspective, and it’s also good from an environmental point of view.’
‘The fossil fuel industry benefits twice: no clean-up costs and a solid role in the offshore energy transition’
In line with this, the NSTA, together with gas and oil companies, has identified 100 pipelines that could potentially be reused for future energy transitions. If only half of these were actually reused, this would result in a cost saving of 7 billion pounds, the NSTA writes on its website. That excludes ‘the costs saved by not having to dismantle and remove the old infrastructure’.
Not having to clean up also benefits big gas and oil companies financially: between 10 and 15 billion euros in total. That is a fraction of what governments have to pay, but still a nice windfall. This is a massive cost saving, especially for operators with many platforms and wells, like BP, Equinor, Shell, TotalEnergies and British Harbour Energy.
A revenue model for the future
Besides the financial benefit, there is also a strategic interest in leaving existing infrastructure in place. Companies that do not clean up retain their assets in the North Sea. In view of the energy transition, sites in the North Sea are in demand. Unused platforms, pipelines and installations potentially have significant strategic value to the owner. The more infrastructure can be designated for reuse, the bigger the role of the owner of that infrastructure in the roll-out of new forms of energy, such as hydrogen.
The data reviewed shows that although Shell does not have many inactive platforms, it does manage most of the inactive pipelines. The other big fossil companies, such as BP and Equinor, also have unused infrastructure and are involved in experiments for using it for CO2 storage or transporting hydrogen.
The fossil feul industry thus benefits twice: it does not have to pay for clean-up and secures itself a solid role in the offshore energy transition. This could earn them billions in profits and subsidies in the future.
Environmental risks: a neglected aspect
Strategic interests carry over into the debate on the environmental impact of whether or not to leave old installations in place. A constant argument for not removing the installations is that removal would harm nature. The concrete structures have become artificial reefs, with mussel and oyster beds and breeding grounds for birds. Digging them up, cutting them up and dragging them away would disrupt marine life on the seabed. One would expect operators, in particular, to raise this argument, but international scientists also feel that removing these platforms may not always be the best option.
A ‘false argument’, says Filip Volckaert, Evolutionary and Marine Biology professor at KU Leuven. According to the scientist, the temporary damage caused by dismantling does not outweigh the impact of leaving it in place. ‘Leaving it all in the ocean creates much greater ecological pressure. Certain species that benefit from the structures left behind are usually the more “opportunistic species”. In the end, we are left with a lower quality of biodiversity.’
In some cases, environmental reasons act as a motive for regulator SodM to order the removal of all parts of an installation, for example, TAQA’s gas production platform in the Dutch section of the North Sea.
According to SodM, the oil and gas company has failed to demonstrate that there are no ‘adverse environmental risks’ associated with leaving the pipelines in place. Moreover, the pipelines are located in an area where there are many ‘sand waves’, which could expose them and cause the nets of fishing vessels to snag on them. SodM therefore wants TAQA to remove the pipelines as well.
Pollution is another danger, especially around oil platforms and wells. When inactive wells are not permanently plugged and sealed properly, they can leak natural gas or a component known as methane. And oil residues from poorly cleaned oil pipelines could also contaminate the sea.
This is also the case with Brent platforms. After fierce protests, Shell had to abandon its plans to sink the Brent Spar to the bottom of the sea and dismantle the platform on land. But there are more structures in the Brent field. These, too, have since stopped production. Shell is now seeking permission from the UK government to leave the concrete foundations (each of whose four legs weigh 300,000 tonnes per platform) on the seabed.
Greenpeace, as well as OSPAR, the international partnership that spawned the agreements around decommissioning, think this is a bad idea. Because the structures still contain roughly 11,000 tonnes of oil that will end up in the sea when the steel supports, and concrete foundation erode.
Nevertheless, Shell has repeatedly stressed that removing the structures would cause more damage than leaving them in place. Duncan Manning, Shells Brent Decommissioning Asset Manager, indicated back in 2017 that the company had done extensive research into this: ‘We came to the conclusion that leaving the oil in place is the right thing to do. Shells Independent Review Group agreed that the environmental impact of collecting, transporting and disposing of the oil would be much bigger than the minimal impact of letting it sit.’
Norway has the same problem. There, mainly the old and big platforms are causing problems. Energy company Equinor, for instance, plans to leave all the concrete structures of the so-called Statfjord A (totalling more than 300,000 tonnes of material) on the seabed. And new construction is also underway. The Norwegian North Sea is thus in danger of being paved with concrete, as a Norwegian partner in this investigation, broadcaster NRK discovered.
Maintain positions or a clean slate?
Under international agreements, the North Sea countries themselves can grant permission to leave material in place. This is where positioning along strategic lines comes into play again: the UK, a shareholder in most wells and installations, is in favour.
Belgium and Germany, on the other hand, want to stick to the agreement that everything must be cleaned up. This is particularly easy for Germany and Belgium to say: they own a mere fraction of the infrastructure compared to what the UK will have to clean up in the future.
The Netherlands is keeping a low profile by referring to the international agreements that, like the other countries, it adheres to.
‘The Mining Act, which has been in force since 1 January 2022, states that you must report the decommissioning of a well within four weeks. It must include the reason why the installation is shutting down. This could also include a temporary halt in production or for a part of the installation. In other words, you cannot stop production without reporting this fact.
The Ministry of Economic Affairs has no insight into installations that will become non-operational this year or in the coming years; this depends on, for example, the duration of production.
Before 1 January 2022, it was possible to have wells that did not produce for years without reporting it. However: even non-producing wells must meet the safety requirements as set out in the Mining Act. SodM ensures that they do. Therefore, there is no reason to believe that non-producing wells pose a significant environmental risk.’
According to Belgian North Sea Minister Vincent Van Quickenborne, countries are too quick to grant exemptions for removal: ‘Cost and feasibility arguments are invoked too quickly in this regard. That should not be an argument in these matters,’ he told the research team.
‘Those entire structures are a huge combination of concrete, metal, plastic and numerous other substances. There are also numerous liquid substances, such as mineral oils and other dangerous and harmful substances, on top of and in them. (...) What remains at sea after exploitation will also dislodge sooner or later, leach out or otherwise end up in the marine environment. That is a form of direct pollution that should be avoided as much as possible.’ Moreover, leaving old structures in place, according to the minister, comes at the expense of ‘better use of the space.’
In short, the debate on whether the decommissioning agreement should continue to be relaxed comes down to haves and have-nots. Countries that have no assets are keen to start with a clean slate. Countries that do own all sorts of things in the North Sea want to hang on to them − both for financial and strategic reasons.
Who will come out on top remains to be seen. In 2024, the participating countries want to make a decision regarding the Brent field. Dismantled and removed or not – it will set an important precedent for many other decommissioned oil platforms: will the cards in the North Sea be reshuffled, or will the current owners retain their positions and future promoters left with no choice but to continue navigating around the fossil graveyard? Either way, the outcome of that question will have huge financial implications.
The data and analysis cover the exclusive economic zones (370 kilometres from the coast) of Belgium, the Netherlands, the UK, Germany, Denmark and Norway. Officially, the North Sea is smaller than this area, but we felt it inappropriate to leave out much of the infrastructure for which these countries are responsible.
The data were taken from several official registers, such as:
- North Sea Transition Authority (United Kingdom)
- Oljedirectoratet (Norway)
- Dutch Oil and Gas Portal (NLOG)
- EMODnet (European Commission), which has slightly less recent maritime data compared to the other European countries.
These registries provide an up-to-date overview of infrastructure in the form of spatial datasets. Those sets were loaded into a PostGIS database and then edited and analysed using some Python scripts that can be found on our GitHub page. The data were enriched with company data taken from the trade registers of the respective countries.
The differences in the data sources are significant; thus, we had to make choices regarding categorisation, such as status, infrastructure type and company names. These choices can be found in the configuration folder on our GitHub page, and you can also find a more comprehensive justification there.