Democrats seek stricter regulation of offshore oil and gas infrastructure

By Ari Natter on 10/14/2021

WASHINGTON (Bloomberg) --House Democrats are making the case for stricter regulation of thousands of abandoned wells, platforms and pipelines off the U.S. coasts following the biggest off-shore spill in California in nearly 30 years.

A hearing by the Subcommittee on Energy and Mineral Resources comes as anger over oil fouling Huntington Beach has renewed demands for offshore oil drilling bans and led to bills mandating expensive leak detection equipment and new spill reporting requirements.

“Aggressive oversight and regulation of offshore oil and gas infrastructure are needed to ensure the fossil-fuel industry doesn’t use the bankruptcy process and other legal maneuvers to escape their environmental obligations and shift the cleanup costs onto American taxpayers and local communities,” Democratic staffers on the House Natural Resources Committee subcommittee wrote in a hearing memo.

It’s also leading to fresh scrutiny of aging offshore oil and gas infrastructure. Of 55,000 oil and gas wells drilled in federal waters off the U.S. coast, 59% or roughly 32,000, have been abandoned, according to prepared testimony by Donald F. Boesch, a University of Maryland Center for Environmental Science professor.

In addition, 18,000 miles (29,000 kilometers) of decommissioned pipelines snake the ocean floor in the Gulf of Mexico “and we do not know where all of them are or the companies that put them in place,” Boesch said in his written testimony.

One such pipeline, a 12-inch pipeline that still held oil, was damaged earlier this fall by Hurricane Ida, and created a miles long oil spill off the coast of Louisiana.

“Leaving oil and gas infrastructure in place can be a ticking time bomb, with the potential for damage from storms, accidents and corrosion all leading to more costly decommissioning efforts,” said Rob Schuwerk, North American executive director of the Carbon Tracker Initiative, an independent financial think tank.

Committee Republicans, for their part, plan to assert that the benefits of offshore oil and gas production include domestic energy security, jobs and federal revenue.

“Any proposals to reform financial assurance requirements should ensure adequate protection for the U.S. taxpayers without adding undue burden to operators,” Republican staff wrote in a hearing memo.

Decommissioning offshore oil and gas infrastructure could cost the industry as much as $50 billion, Schuwerk said in his written testimony, citing estimates from the Interior Department’s Bureau of Safety and Environmental Enforcement.

While Interior Department rules require the removal of offshore oil and gas equipment, companies have been able to avoid permanently plugging old wells and federal rules do not require companies to provide adequate bonds to cover full decommissioning costs, according to committee Democrats.

“Weak and outdated Interior Department offshore pipeline regulations expose U.S. taxpayers to significant costs associated with cleaning up pollution and removing old oil and gas infrastructure from the ocean,” they wrote.

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