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Britain’s retirement party begins

The North Sea oil industry that underwrote Britain’s 1980-2008 neoliberal debt-binge is coming to an end.  Oil and gas production has fallen by more than 60 percent since the 1999 peak.  And since 2004/5 Britain has become increasingly dependent upon imports to meet its energy needs (ultimately a much greater threat to the economy than Brexit).

There is, however, one last binge to be had before we’re done.  According to Greig Cameron in the Sunday Times:

“It is the oil industry equivalent of a buzzards’ picnic. As the North Sea is drained of its oil and gas, so time is running out for the giant rigs that for decades have been piping fuel up from the seabed. Many of the basin’s workhorses are going to be little more than huge carcasses dotted across thousands of miles of open ocean and sharp eyes are turning to the potential feast on offer.

“You can see why. North Sea decommissioning is an embryonic £50 billion industry, a huge enterprise in which rigs and pipelines are removed, hauled ashore and painstakingly picked apart.”

Between now and 2022, 148 fields will be decommissioned; followed by a further 84 between 2023 and 2027.  Around 840,000 tonnes of materials will have to be brought onshore for recycling or safe disposal; and 1,600 wells will need to be sealed.

The final cost of this last gasp party is likely to be higher than Cameron’s £50 billion.  Government ministers have put the cost at £60 billion; and there is no reason to expect that decommissioning will buck the trend and come in on time and within budget.

The bigger question is who gets to pay for all of this?  In theory, the big oil companies were supposed to have set money aside against the day when the oil ran out.  But most of the big players have gone, and have sold the liability to smaller and less secure companies.  Indeed, as we saw with the now discredited Carillion, it is all too easy for a private company to collapse at a moment’s notice; leaving the public to pick up the bill.

If I were a betting man, I would put money on most of the wells remaining unplugged and most of the infrastructure remaining where it is.  But there again, by the time we reach that point, money (at least in pounds) is not going to be worth much.

As you made it to the end…

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