A sectoral sustainable development study
of the UK offshore oil and gas sector
Professor Paul Ekins (PSI)James Firebrace (JFA/UKOOA)
Robin Vanner (PSI)Presentation to the Offshore Forum
Monday 8th December 2003
The UKOOA-PSI Study• Two year programme
– April 2003 to May 2005• Funding
– PSI externally funded by EPSRC grant under DTI Sustainable Technologies Initiative
– UKOOA contribution largely in kind through data provision and industry analytical input
• Governance– Joint UKOOA-PSI Management Group with
representation from four companies and secretariat
Objectives•To develop a generic sectoral sustainable development methodology
•To deliver useful insights into important issues for the oil and gas sector
Method•Material flow analysis•Energy flow analysis•Value chain analysis•Case studies:
– Decommissioning– Offshore energy use– Produced water– Employment
Materials as a carrier of value and energy
(Material M, Value V, Energy E )
M V = z M,V > z+x, E < E
Input material Material M, Value V, Energy E
Emissions & discharges V < 0, Waste E
Process (V = £x, E =E)
Dimensions related to the project Environmental Concern
‘Clean seas’ Emissions/climate change Landfill
1. DECOMMISSIONING (footings, drill cuttings, pipelines)
Material flow
Energy flow
Financial flow
2. OFFSHORE ENERGY USE (EU emissions trading)
Material flow
Energy flow
Financial flow
3. PRODUCED WATER (oil in water, energy use, ‘no harm’)
Material flow
Energy flow
Financial flow
The upstream oil and gas sector
Low-grade heat Emissions Low-grade heat EmissionsOnshore Offshore
Produced waterOilGas Produced Fluids
Elements left in-situ
.
Material FlowsSolid material flowProduced fluidsOil Energy FlowsGas High-grade energy flow
Water Low-grade energy flow
System boundary - Oil & gas upstream sector (All flows have associated financial flows)
Energy systems
Production Systems
Commissioning process
Recycling process
Landfill
Commodity sectors
Energy sectors Decommissioning process
The decommissioning process
Drill cuttings
SeaLeachate
Leachate On-shore
Leachate
PipelinesSea-bed
Covered by OSPARNot covered by OSPAR
Atm
osph
eric
em
issi
ons
System boundary - All flows are potential material flows with associated energy and financial flows
Barge & crane
Lower Jacket & footings
( >55m below sea
Top side
Upper jacket ( <55m below sea
level)
Rec
ycle
Landfill
Rec
ycle
d m
ater
ials
Drill cuttings
Operational energy flows
Low-grade heat loss
DieselGas
High grade heat loss
Utilisation of high-grade heat
Extraction of heat
Diesel EmissionsGas
Low-grade heat loss
Energy flows Low-grade heat lossesPowerHigh-grade heatLow-grade heat
System boundary - Oil Rig (All flows within the system boundry are energy flows with associated financial flows)
Power System
Heat system
Gas export
Energy consuming Systems
Oil export
Gas compression
Produced water purification
Re-injection of produced water
Produced fluids separation
On-site accommodation
Coo
ling
Syst
em
Others
The produced water system
HeatGas export
Crude oil export
Mineral impuritiesProduced fluids Shipped in chemicals
Re-injected produced water Low-grade heat
Power Sludge
Produced water discharge
Material flowsProduced fluidsProduced fluid impuritiesGas Energy flowsOil PowerWater High-grade heatintroduced chemicals Low-grade heat
System boundary - Oil Rig (All flows are material flows with associated financial flows)
Oil
and
gas r
eser
ve
Separation System Chemical Additives
Produced water treatment (de-oiling)
Decommissioning issue objectives:
1. Capture the wider (material, value and energy) implications of the various possible decommissioning solutions;
2. Present these flows in a way that allows for comparison between the solutions; and
3. Inform the development of the generic sectoral sustainable development model from the insights gained from use of the methodologies.
Offshore structures• Total of 266 structures on the UK
continental shelf. Key ones are:– 33 large fixed steel– 196 small steel– 11 concrete gravity based structures– And other mobile and small structures
• Decommissioning experience:– Several smaller structures have been
decommissioned.– To date, no large steel structures which are
fixed to sea bed have been decommissioned.
Decommissioning costs
Material flows• Typical large steel
structure:Around 40,000 tonnes
• ~90% Steel• 2% Aluminium• 0.3 Copper• ~90% or more
recoverable (economically recoverable after dismantling)
• Large cuttings pile:Around 40,000 tonnes
• Mostly bed-rock• Containing drilling
muds ~3-4%.
Typical breakdown by mass of large steel structure and facilities:
Topsides
Footings
Jacket
Pipelines
Material end-points: (Technical decommissioning options)
1. In-situ:– Leave standing– Toppling
2. Onshore disposal:– Reprocess (recycle and landfill waste)– Re-use (e.g. quay)
3. Offshore disposal:– Deep sea– Shallow water (reef)
In-situ solutions• Pipelines & Drill cuttings
– Regulated by UK DTI
• Structure - Regulated by OSPAR– Only footings part of structure has a possible derogation
from the presumption of ‘clean sea’• Footings: ‘bottom part of a steel jacket including the lower
jacket legs and piles fixing the structure to the sea bed’• Not designed to be removed• Typically tens of metres high above sea bed• Only if jacket is >10,000 tonnes
– If derogation from presumption of ‘clean sea’ for footings is sought:
• Justification on environmental and / or safety grounds, as well as on the practicability of removal (OSPAR).
• Must leave 55 metres navigation clearance
Onshore solutions• Re-use of unprocessed materials:
– What are the materials, energy and value of the structure which would have been built if the structure was not used?
– e.g. a previous decommissioned structure was cut up and used as a quay.
• Process materials onshore:– Recycle: saving of raw material and possible energy savings.
• What ‘value’ does the recovered material have?– A proportion of the material is unrecoverable and has to go
to landfill• Therefore has negative value (gate fee)• Rates of landfill: ~10%
Provides perception of ‘clean seas’ and conservation of resources.
Offshore disposal solutions• Deep sea disposal
– Removes structure away from harm to human activities and interests. No detailed data.
• Shallow water disposal– Marine conservation area (> fish stocks)– Popular in the USA – dumping of cars to
develop area where people actually pay to fish.– Trace amounts of contaminants remain after
cleaning
Neither solution allowed in Europe under the OSPAR agreement.
Decision support methodsHow do you trade off the various ‘values’?
1. Economic valuation type models:• Puts all costs and benefits in monetary terms (including
non- use values)– Theoretically logical– Who does the valuing?– Do people trust process if they do not like the outcome?
2. Materials Flow type analysis:• Systematically captures and tracks all of the significant
flows of materials.• Assesses the usefulness of all material end points and
input material in terms of their financial value and energy content.
• Provides a summary of the wider public benefits and impacts of returning the structure to shore, and highlights the additional decommissioning costs to achieve the public goods associated.
Impact categories1. Quantitative impacts:
• Material flows – inputs, wastes, emissions (tonnes)• Energy flows (GJ)• Value flows - expenditures, revenues (£)• UK employment (jobs)
2. Qualitative impacts and issues:• Clear seabed• Health and safety• Marine environment• Resource stocks/conservation• Landfill• Marine biodiversity/fish stocks• Fishing industry
Decommissioning solutions
In-situ Structure Recovered structureOffshoreRecovery
Replacement process
Recovered Material
Landfilled Material
Alternative use
Equivalent use process
Summary Outcomes Matrix
Conclusions• No results as yet• Results will enable:
• Direct comparison between different quantitative outcomes (e.g. which decommissioning solutions use most energy/produce most emissions, which have the highest expenditures?
• Discursive comparison between different qualitative outcomes (e.g. which solutions are best for fish stocks/marine biodiversity, or the fishing industry)
• Different expenditures for different solutions will enable implicit valuation of the non-financial outcomes should they be adopted
