Right Column

Mineral Resources Management Division - Rigs to Reefs Workshop

John Smith

Mr. Smith is a Senior Environmental Coordinator with the Minerals Management Service's Pacific OCS Regional office in Camarillo, California. He has a B.S. degree in geology and an M.S. degree in mineral economics from Pennsylvania State University. He has 25 years of service with the U.S. Department of the Interior, the past 15 with the MMS, where he has served as senior environmental coordinator for major oil and gas exploration and development projects.

~From Transcript ~

In my talk today, I'm going to be covering the federal OCS federal management services responsible for managing oil and gas, the rigs development.

I'm going to give you a brief overview of our facilities, discuss the outlook for decommissioning on the OCS, the MMS policy and requirements for decommissioning, briefly our Gulf of Mexico experience and also some cooperative activities we have with the State Lands and other agencies.

Just briefly about the MMS of course, we are responsible for administering 1.5 billion acres of OCS land. We have 8,000 leases. We have 4,000 production facilities, 23 of which are off shore of the coast of California.

This accounts for about 25 percent of our oil and gas production. And we also collect revenues for onshore and offshore which come to about $4 billion each year.

If we look at your facilities on the OCS, we have a total of 23 platforms, 15 in the Santa Barbara channel, four in San Pedro Bay and four at the Santa Maria basin. The water depths of these range from a shallow of 100 feet to about almost 1200 feet.

They range in age from 11 to 32 years. And the size range is significant. As you can see, the relatively small structure is 1,500 tons.

Once again, 19 of these 23 structures are located off the counties of Ventura and Santa Barbara and in the Channel, facilities are located anywhere from three to ten miles offshore.

This gives you a little bit of an idea of what we're looking at in terms of the age of the facilities. All of our 23 facilities are in a range of about 10 years old. 19 of them are greater than 15 years old. 14 greater than 20 and 5 greater than 30. And the important point to keep in mind that is the typical life of an off-shore platform is 20 to 30 years.

So we have a fairly significant number of our facilities that are nearing the end of their economic life.

This is also interesting in terms of the water depth in the Pacific region relative to that of the Gulf of Mexico. A number of our structures are in very deep water. We have nine structures from 0 to 200 feet of water. 6 in the 200 to 400 feet category. And 6 in the 600 plus category.

As far as decommissioning today around the world, the deepest structure that's been removed is in about 400 feet of water depth. You can see in the future the Pacific region we're definitely going to have some world class projects in terms of size and complexity.

I think this illustration is an interesting one. This was prepared by Chevron several years ago. It gives you an idea of the size of the structures we're talking about.

On the right-hand side is the Statue of Liberty. That's about 300 feet high. On the left-hand side is the Empire State Building. It's about 1,200 feet high. Two of our platforms you can see right of the Empire State building.

We have a number of our platforms in the across the Pacific.  The important point here is it's going to be a significant technical engineering challenge to remove these facilities.

At least the same as what put them in and if not greater challenge. One of the problems we have in Southern California in terms of looking at the future in decommissioning is there's a complete lack of infrastructure. There are no heavy lift vessels stationed upon the West Coast capable of removing these platforms at the present time.

Also the disposal of the large quantity of material is known to be a challenge as well. There are no onshore scrap yards in Southern California that can accommodate the steel from these facilities. So this definitely provides some limitations and disposal options.

The OCS decommissioning outlook, we have no announced plans at the present time. We are aware that industry is in the preliminary planning stages in certain phases. The MMS forecast is that we review and study the first project found at OCS would be likely within the next five years, and we would expect decommissioning of six to eight facilities by 2010.

Briefly our Gulf of Mexico experience. Of 5,800 platforms that have been installed in the Gulf of Mexico, 1,800 have been decommissioned. 150 of the reefs have been reefed since the mid-1980’s. 

Texas and Louisiana have major reef programs which are focused on use of platform structures.  I have been instructed that even in Florida, which has expressed some fairly strong opposition to OCS oil and gas exploration and development, they have seen the benefits of taking certain facilities for platforms for fishing reefs off shore in that state.

This is a year or two old. But this chart does give an indication of what the consensus is as far as reefing platforms. As you can see, in the Gulf of Mexico that, if you enter the 150 reefs in the 200 to 400 feet water depths, 84 percent of the platforms are reefs -- it was a strong preference for reefing in those depths.

There's going to be a similar incentives on the West Coast because of the water depths of our platforms.

MMS decommissioning requirements. The lessee must remove platforms within one year of termination of a lease. They must remove it to the depth of 15 feet below the mud line. They must clear the area of all obstructions.

And I want to emphasize this point. However, MMS does have discretionary authority to waive the requirements when appropriate to accommodate conversion to an artificial reef or reef habitat and conservation of other natural resources, et cetera. So there is that flexibility in our regulations.

Our policy is, we support and encourage the reuse of platforms and artificial reefs. However, the following requirements must be met. The structure must not impose an impediment in future mineral production.

The reuse plan must comply with the Army Corps of Engineers permit requirements and criteria in natural and artificial reef plan and the state fishing management agency must accept liability for the structure.

Bottom line here is that MMS is not a Permitting agency. We can accommodate the process and the interest of the state if it so desires in the artificial reefing of the structure.

In terms of planning for the future we've been working cooperatively with the State Lands Commission and other agencies since 1997 and are responsible for a large workshop in Ventura California on decommissioning attended by 400 people which was a cooperative effort planned by all.

And there's a large proceedings document that I think summarizes many of the issues that we're going to hear today. 

Following that, the Interagency Decommissioning Working Group was formed. It's composed of nine federal, state and local agencies and it's meant to continue the progress in terms of planning for the future for decommissioning.

We are working very well together with addressing the issue~about disseminating as much information we can to all parties to promote dialogue and communications and work with everyone to resolve these issues.

I wanted to emphasize also the MMS has expended quite a bit of money in terms of research on platform ecology studies in the Pacific O.S.C. regions. To date we have funded $4.3 million in studies. We are beginning to close some of the data gaps. But I’m aware that others exist.

Gulf of Mexico of course has had a program comparable of the size of ours. I'm not aware of the dollar amount spent there. But it's significant. We will have a report within the next month that summarizes all of the studies that we have funded.

Finally, one other significant event, is the U.C. California system has formed a select scientific advisory committee on decommissioning. So a group of scientists have been assembled to look into the issue and prepare a report.

It was stimulated to a large extent by Senator Alperr S.B. 241 which was mentioned earlier.