Exxon will likely to leave subsea equipment on seabed after production – ERM consultant

Nov 19, 2021 News

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By Renay Sambach

Kaieteur News – At the end of the economic life of Guyana’s fourth oil field, ExxonMobil will likely leave its subsea equipment on Guyana’s seabed. This is according to Environmental Resources Management (ERM), consultant Todd Hall.
The aforementioned was disclosed during the final public scoping of Esso Exploration and Production Guyana Limited (EEPGL) ¬¬¬¬¬¬ – ExxonMobil’s subsidiary, Environmental Impact Assessment (EPA) Study.

The Environmental Protection Agency (EPA) facilitated the event to ventilate their concerns and signal their intention to litigate against EEPGL, if their demands are not met in writing, in the EIA to be prepared. ERM is the firm that prepared the EIA for EEPGL to submit to the EPA.
The exercise saw participation from stakeholders locally, regionally and internationally, including Canadian-Based Guyanese, Dr. Jerry Jailall who queried the company’s decommissioning plan for Guyana’s fourth oil project, Yellowtail.
Decommissioning is a process entailing the removal of industrial installations and any relevant structures that have come to the end of their productive life – the safe removal of pipelines and other infrastructure that were fixed to the ocean floor to extract the oil.
Dr. Jailall first highlighted that according to the Yellowtail proposal, at the end of the field production, flow lines, umbilical cables, mooring lines, anchor piles, and other subsea equipment will be abandoned on the seabed.
He then noted the fact that leaving subsea equipment on Guyana’s seabed after production seems to be contrary to best practices in the oil industry. This led to Dr. Jailall asking “Which best practice standards, have you abided to for this study? Is it a World Bank or International Finance Corporation standards? Whose guidelines are you using?”
He also asked, what is the risk in the difference of leaving all the toxic junk on the sea floor and following international best practices? How is this proposal for Guyana’s fourth oil project good decommissioning practice and the guidelines that the EPA is using to assess the decommissioning part in the EIA?
The environmental consultant, who responded to Dr. Jailall’s questions, first noted that there is a preliminary decommissioning plan that is included in volume three of the EIA. In fact, Hall stated that the current plan envisions that the subsea equipment will be disconnected after it is flushed and prepared and potentially left in place on the sea floor. “The decommissioning plan also states that alternative strategies will also be considered during the detailed decommissioning plan development, based on the results of a series of comparative assessments that are described,” the environmental consultant added.
In response to Dr. Jailall’s question on which best practice standards were used, Hall disclosed that the comparative assessments are based on consideration of international guidance, specifically that from the United Kingdom (UK), as well as other international guidelines.
Hall then highlighted that Dr. Jailall’s question was based on decommissioning which is not only in the preliminary stage but is something that is expected to happen 20 years from now. He also noted that in the years to come science and technology will evolve and that a detailed comparative assessment will be done shortly before the decommissioning is proposed and as such, current situations and current regulations can be taken into account.
Nevertheless, earlier this year it was reported that ExxonMobil’s subsidiary EEGL can recover $47B in decommissioning costs by 2024 –years before Liza Phase One Project in the Stabroek Block actually comes to an end; in the next 20 years. This “abnormality” was highlighted in the Center for International Environmental Law (CIEL) publication called, “TOXIC ASSETS: Making Polluters Pay When Wells Run Dry and the Bill Comes Due.” Founded in 1989, CIEL uses the power of law to protect the environment, promote human rights, and ensure a just and sustainable society.
CIEL cited that an independent report by the Institute for Energy Economics and Financial Analysis (IEEFA) estimates that EEPGL could charge Guyana as much as USD$227 million or GY$47B in amortized abandonment costs between 2020 and 2024.
Moreover, in August last, it was reported that in Louisiana, oil companies sought bankruptcy, selling assets to evade a cleanup bill. US based news agency, The Washington Post, highlighted how the negligence of oil companies can exasperate the effects of climate change and how they can hinder the implementation of a solution designed to mitigate those effects.
The newspaper states that the Gulf of Mexico swallows a football-field-size piece of Louisiana’s coastline every 100 minutes on average, with islands that have historically acted as barriers to hurricanes headed toward coastal communities losing significant ground. Without them, Louisiana is more vulnerable to climate change and severe weather.
In order to mitigate the effects of encroaching seas, a plan was devised to restore and rebuild the State’s coastline, with geologists estimating that up to 11,000 million cubic meters of sediment are needed to restore the State’s coastline.
At first that much material had initially posed a logistical hurdle because of its procurement and transport. However the State has opted to utilize the sediment off of Louisiana’s coast however, there is a problem.
Syed Khalil, a geologist with the State’s Coastal Protection and Restoration Authority put the problems facing the plan into perspective and notes that about 58 percent of the offshore sediment in the gulf that could be used to rebuild Louisiana’s coast is blocked by pipelines.
Canals dug through the wetlands to build and service pipelines — which create pathways for saltwater to flow into the marsh — are also partly to be blamed for Louisiana’s coastal erosion. Now, those pipelines, and the companies that owned them, are hindering the solution.
According to The Washington Post, a Houston-based energy company is asking a federal bankruptcy court for permission to walk away from its aging infrastructure in the Gulf of Mexico.
Fieldwood Energy LLC is attempting to shift responsibility for removing 1,715 wells, 276 platforms and 281 pipelines of oil and gas companies that previously held leases for the same area, according to court documents. Under existing federal regulations, companies remain liable for decommissioning infrastructure on areas of federally owned seafloor where they previously produced oil and gas. But the former holders of the Fieldwood leases — including Chevron, BP and Shell — are attempting to get out of that obligation because of the cost, estimated at US$9 billion.

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