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Special episode: How to close down oil and gas

40m 30s

Special episode: How to close down oil and gas

The Centre for Decommissioning Australia (CDA) was established in 2019-2020 in response to the oil and gas industry's need for coordination and preparedness for upcoming decommissioning work. It functions as an independent, not-for-profit body. Decommissioning refers to the obligation to safely and permanently remove infrastructure at the end of an asset's production life. In Australia, this represents an estimated $60 billion liability involving about 6 million tons of material, primarily steel and concrete, from both offshore and onshore sites. The work is technically challenging, especially for large fixed offshore platforms, with major removal projects scheduled, such as in Victorian waters. A key driver for CDA's creation was regulatory change after the Northern Endeavour incident, which shifted industry practice towards more timely decommissioning rather than delayed removal. CDA is funded by a West Australian government grant and fees from its approximately 160 member companies across the supply chain. Its role is to coordinate the industry, attract technology, and advocate for safe, efficient operations that maximize recycling and proper well plugging, while its current focus remains on oil and gas, though future offshore wind will face similar regulatory requirements.

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You're listening to a special episode of Energy Insiders, presented by Jarls Parkinson and brought to you by Australia's most anticipated energy event, energy exchange Australia. From March 10th to 12th at the Perth Convention and Exhibition Centre. Dr Francis Norman, thank you very much for joining the Energy Insiders Podcast, the special episode. Thank you, thanks very much for being here and looking forward to the conversation. Yeah, well look what we just actually start off with, you're the head of the centre of decommissioning Australia. What is it? What does it do? I thought that would go to me the first question. Yeah, Centre to decommissioning Australia, we were, I'll use the term, a government minister used when I was talking with him a few years ago, so we were invented in 2019 in response to a recognition in broadly speaking in the oil and gas industry, so operators, government regulators, supply chain and so forth, that we were heading into a period of a lot of activity in decommissioning. We didn't really have our industry wasn't ready for the volume of work, we didn't have any sort of body if you like, that could go out there and spruke what was coming up, that could act as a coordinator, try and entice people to come here, bring technologies here and so forth. So yeah, we were, as I say, invented in 2019, 2020, and then since then we spent, well we spent the first 18 months, the term I use often is we were incubated inside of another organisation. And then in December 2021, we spun out as an independent, so we function as an independent offer profit industry, body now for the decommissioning industry for Australia. And what the decommissioning industry, I guess, is the next question. So in the context of what we do, decommissioning applies to the oil and gas industry. And it is essentially the obligation that the industry has at the end of the production life of any oil and gas asset to safely and in perpetuity, close down and remove the facilities and the assets that have been used to extract the hydrocarbons and then to in the satisfaction of the regulators and the ministers in charge to leave it in as good a condition as they can on completion. So it's just offshore, is it onshore as well? So both Australia is unusual compared to a lot of the jurisdictions that we deal with around the world in that it has a significant onshore as well as offshore. So often when we talk, when we first started, we looked at who was doing this around the world, not say UK Brazil, sorry UK Norway Denmark Holland, Gulf of America, Gulf of Mexico, as it was referred to back then. Brazil, most of those jurisdictions, the majority of their work is offshore. For Australia, we've got a very significant offshore piece and that's really where the focus has been. It's about most of our focus has been to date, but we also have a very large onshore oil and gas footprint that over time will reach end of life. Yeah, and you just mentioned sort of hydrocarbon industry, but I'm guessing it should also apply, I see from the website, it should also apply in future to the offshore wind industry that apply also to the onshore wind and solar industry. So the way I would refer with that is right now in the offshore space, when Australia does get to the point of installing offshore wind. It's going to get there. The installed offshore wind facilities will have to comply to essentially the same legislative requirements as the oil and gas industry. And what's happened there is that the regulator for safety and environment for the offshore wind industry is has mirrored the regulations that we have for the oil and gas industry. So right now for oil and gas, the base case is full removal. And unless you can demonstrate certain things can be left behind without causing any without causing any long term issues. And in the onshore space, onshore things like onshore wind, quite honestly, they're a little bit of a mess. There's because of the times when some of these were installed, people hadn't thought about what they were going to do with them and the reached end of life, who carries financial liability, who's responsible for a wind farm on a farmer's paddock that's been there for 25 years. There's some real challenges still to work through in there. For us right now, oil and gas, just offshore is around about a $60 billion Australia industry. If you take $20, $20 and that could be significantly more or it could be a little bit less than that to fully remove everything over the full lifecycle that takes out to 20, 60, 65. For a little team of four people, that's the big enough industry at the moment for us to try and work our way through. This sounds like an absolute, so you're not touching onshore wind or onshore solar. We don't at the moment. We don't. Many of the companies that form our network, if you like, we're so we're a partner based, a member based organization. Many of those companies there will and are doing decommissioning works for onshore power stations, refineries, defense and all sorts of other industries. Because we're in all the coal-fired power stations have been decommissioned. So that hasn't come up to your remit then, so you're specifically. So who funds your organization? Now there's a question I've never heard before. Who funds us? Like we, we were incredibly fortunate that first off where we were incubated for those first few years was in a federal government agency by the name of NERA. NERA was one of the six industry growth centers. As NERA was reaching the end of its funding, we in discussion with them took the option to spin and spin quarter out. So they helped us up until that point. So they got us up, they got us running, they got us started along with support from industry as well who saw the need for what we had. The next phase, if you like, that they're going into sort of over the last three and a half years where we are now. The big believer in us in those very early days was the West Australian government. They provided us with a four year grant. We're in year four of that now and that enabled us in those first couple of years as we were really starting to get going and becoming independent. That enabled us to really sort of get going and build our capability quickly. And then as time has gone by, we've signed on somewhere around about 160 what we call partner companies, so members. And there's a fee associated with each of those memberships. So we're at the point now where we've got what I would say a pretty healthy balance between industry and some ongoing support from our friends in the West Australian government. So yeah, we try then through that to function and operate as independently as we can because we have such a broad member base. It's service sector companies, it's the supply chain, right the way through, it's the oil and gas companies, it's government and so forth. We are we're not the banning of big oil or something like that. No, we're not. No, we're not. We try and be dispassionate and the way I would often refer to which is we advocate in in lower case for the benefit of the industry as a whole so that the industry is able to do the work that needs to be done efficiently safely and give us these these best outcomes that we can have. That the wells are plugged in perpetuity done properly first time. That the infrastructure gets removed safely gets brought to shore when it gets the shore in the offshore context of the obviously the thon shore is already there in the offshore context it gets brought to shore and then once it arrives on shore we have a well equipped capable industry here who can dismantle that material and then recycle as much as possible through all of that. That's our that's our those are our guiding lights I guess as an organization. Okay, so tell us some told you a little bit about the scale of the challenge. I mean you mentioned $60 billion in the industry. I guess that's not $60 billion a year but it's $60 billion total total remit of you know and then that would be a guesstimate I guess. I sort of figure in one of your reports that you published last year of 5.7 million tons of staff. Yeah, stuff stuff. Yeah, pipes and platforms and platforms structures. Yeah, well, so tell us about. Yeah, they they 5.7 million tons of stuff assuming full removal and this is where it gets quite great that some of this material will be left in situ. This thing's like a pile that's been driven 60 meters into the seabed to try and remove that I mean they were installed there to be there forever to try and go in and remove those things would be a horrible horrible job. So some things will be left in situ and that will be decided on a project by project basis between the owner and the and the regulator. But fundamentally that 5.5 whatever let's call it 6 for the for argue for round numbers that 6 million tons of material. is made up. First the largest portion in there is carbon steel. It's regular steel like, I mean, it's it's a slightly nicer steel but it's the similar sorts of steel to what your carb bodies construction steel would be used and that forms the structures that sit out there in the ocean. It forms the structures that sit on shore. It's the material in the pipelines. So that's the largest single proportion. Interestingly, the next proportion by weight is concrete. Concrete is used to weight. So if you lay a pipeline on the seabed and you're going to fill it with gas, you want that pipeline to be heavy enough that it's going to stay where you put it. So you put a concrete weight coating on the outside. So if those pipelines get removed then this would be a lot of concrete will come out with there. We also use concrete. We lay what the concrete mattresses which look like chocolate blocks held together with with rope. We lay them over pipelines to protect them and so forth. So a lot of that material will get removed. Then you start to get into nonferrous and other metals so all the coppers and fancy grates of stainless steels and so forth. A lot of plastic, well it seems like a lot of plastic. There's about 400,000 tons potential of your plastic which when you say it like that is a lot of plastic. Most of that is on the outer skins and the internals of cables and flexible pipelines. That material will all get removed as well. So all of this will come out. And then as I said the next job then is to decontaminate the things that have had hydrocarbons flow through them so that they can then be recycled. And that is the the decontamination is quite a challenging task to do. Some of these things don't want to let go. You get some of these stuff it hangs on, it gets itself almost engrained into the material. But once all that and that's being done then you've got a lot of very high value material there. And then the next phase and it's really interesting that we have this sort of thread if you like through the middle of what we do which is the traditional decommissioning, the closing removal and so on. But then at each end we've got like a bulb of extra curricular things. The recycling piece is a fascinating area on the one end and on the other end is alternate uses for these fields once we've extracted all of this gas. So can we use them for carbon sequestration? Those sorts of things as well. So my day job can be very variable. Let's put it that way. Yeah, yeah. And what about the sort of the physical challenges of actually getting this stuff out of the ocean as it were? I guess a floating platform can simply be towed or something. I mean, I don't know. I'm just getting it. They're told. Yeah, yeah, yeah. It's like it floats. I guess you can tow it. It's really just the subsea infrastructure isn't it? The stuff one is the big challenging ones are what we call the fixed assets. It's the fixed structures. So you have what we call a jacket which is essentially an open frame metal structure. Looks like an electrical pile on except it's heavy duty. It's big pipes that this is made from and they stand on the seabed and then they protrude out through the waves at the top. And these can be 40, 50, 60, 70, 80 meters and more tall. So you've got this huge steel structure that stands, you know, that's on the seabed to hold the top sides in place. And then on the top side, the top sides itself is where you've got accommodation modules where the workers would live while they are while they're working off shore in this along with process equipment that receives cleans and so forth the hydrocarbons before it then goes back up the side into a pipeline. All right. So that's not getting tied away. That no you have to that's tough. No, you've got to come in with very clever technologies you could put the legs of the jacket. You cut the top of the jacket, you remove the top. The top sides would come off on a very big crane onto a badge. That badge would then take things into shore. The jackets themselves you'd cut the whole jacket in one piece or you cut it into maybe a couple of slices and then they would get loaded onto a badge and brought a shore as well. The largest most complex one that we've got coming up in Australia is going to be in Victorian waters in it's over the Christmas period 27, 27 into 28. As always we still refer to them. Exxon. I've got one of the world's largest heavy lift vessels. So essentially a very big boat with a crane on each end to come in and lift 12 of these platforms out in one three month period over that Christmas period. And when I say large heavy lift vessel you imagine two oil tankers assembled as a catamaran with with a crane on each end. That's essentially what you're looking at with this thing. It is a monster. And in the best straight too. In the best straight. Which would be fun as anyone who's sailed across us. Yes, I think I think a catamaran of that size is probably going to be relatively stable even in the best straight but it is still going to be a phenomenal and these are so you know these technical challenges what get a lot of people in our industry out of bed on a morning because these are these are things that weren't they weren't designed to be easily removed. They were designed to be robust and to survive all sorts of climactic conditions for decades. And now they're at that point where right thank you you've done your job. Now we want to take you away, retire you, recycle you. They don't want to come out. So this is going to be some fascinating work over these next few years. And the Victorian oil fields are interesting because they're probably the first and probably the first to close, the first to open, the first to be. They were the first ones to open and they they on scale like this this will be the first and probably the only time in Australian waters we'll have so many platforms come out at once. Western Australia we've got a number of quite small platforms. Some of these literally you know monopile so just one single leg with them with a small process equipment on the top. But we also have three very large you know 20, 25,000 tonne top sides and 20, 25,000 tonne platform structures. So we've got we've got a real mixed bag here and we've got an enormous quantity of flexible nobilicles as we refer to them essentially cables and flexible pipelines to to remove as well which is where all this plastic sits. Fricksegoals and the billicles. Yes. Oh we guess wonderful terminology in industry we really do. Has it been done in Australian? Have we decommissioned our first offshore platform or we've done a few small ones. Just a few small ones okay? Yeah just this week literally I think as we are recording this Santos are on with their next one. They're removing one that's known as the Harriet Alpha platform which is right now will be the largest platform to be removed from Australia. And it's from memory it's around about a thousand tons so the the substructure is a thousand tons and then the top side I think is about two and that will get removed it's in the northwest so it's up sort of Karatha offshore Karathri area and it will get removed brought but put onto a couple of barges and then brought down to Quinnan South of Perth for dismantling and recycling. Right okay. And I mean you said that you guys were invented in 2018 and you could be invented but is that because the industry also you know didn't really think too hardly too hard about them. I'm also focused on building these things that they could last. It wasn't maybe focused on why did you need to be invented? It was because of how large the step change was there was the significant change of legislation that went through at in that 2019-2020 period off the back of a very well documented there was a project called the Northern Endeavour which is what they call a floating production storage offloading so essentially an oil tanker that receives oil from the sea from from from Subsea Wells the owners had gone into administration they they fall out from that was that at the time require the responsibility then for the commissioning fell to the federal government. So federal government said okay yep that's the law we'll take it on but there was a few things that came through from that. The first was they changed the legislation so if it when it happens in the future it's less likely that it will fall back to the government. Next one was they brought in a levy so they are recovering all of the costs for the decommissioning of the Northern Endeavour from the industry itself so all of the companies that produce hydrocarbons are now paying into the recycling and their decommissioning costs for the Northern Endeavour but the other thing that really made a difference and the reason probably the biggest reason to invent us was there was a change of expectations from government to the regulator and then from the regulator to industry that's they had to start doing this work in a more in a more timely manner. So we're in the past industry it said look we've finished producing from this particular well we'll close it in we'll make sure it's safe we'll monitor it and then when we have collided critical mass when we have a large volume of material we'll come back and we'll do all the decommissioning works on it and government essentially came back and said we'd actually like you to do it more soon than that and that meant that there was this significant catch-up phase that industry had to enter and that was really what was the what's the trigger for then looking around saying, okay, we can do small jobs now and again with what we have without coordination, but we really needed the coordination and the effort of a body like ourselves to get on with that. That sounds like what's happening there, I might be living to conclusions here in Victoria, for instance, you said there's massive calmer end sort of what I was thinking coming through and whipping away, whipping away, not quite as easy as that, but it doesn't have these platforms, so presumably some of these things have been sitting there for a while, not producing, just waiting for someone to come along and take away. S.O. had planned to start there, my understanding at least, sorry, S.O. had planned to start the planning to do the removal around about, probably around about now, whereas the government said no, we'd actually like you to start it immediately please and we'd like to get on with it a bit sooner, so it messed with the plans of a few of these companies, it forced things, forced activity to come forward a little bit, but for us what it meant was we got to be put in place ahead of time, ahead of, so we've been along the journey as the industry has taken on more and more of this work, and I would actually say that it's been really effective to have an organisation like us helping to coordinate as a single point of knowledge if you like for industry, particularly, this is a global industry, a lot of the technologies we rely on are international, they're coming out of the UK, they're coming out of Norway, they're coming out of the US, they're coming out of wherever, we needed mechanisms and advocacy to attract those companies and for them to think, oh, actually spending two, three, four years with my technology based in Australia is something that's worth doing. So you knew the equipment and you knew the expertise to be here to actually do these projects, or do it. And what we're hoping now, because Australia is one of the future restrictions in the world that has this time expectation now on its decommissioning, because we are doing so much of this now here, we actually have an opportunity to catch up and in some cases get ahead of some of the rest of the countries and some of the other jurisdictions that are doing this work. So we will then have a chance both to prove these technologies here, also build up our expertise to then work as a supporting partner, if you like, as for one, we're better term with all of our, particularly our Asia-Pacific nation friends, practically all of our Northern neighbours are heading into a decommissioning wave, countries like Brazil are on a journey similar to ours there maybe 18 months behind us, if you like, in terms of when they got started. So we're actually, we have an opportunity as a coordinated industry here to take this knowledge and this expertise that we're building now, and take it back out into the rest of the world. That's my optimistic view for where I'd like this to be in a few years. And look at the decommissioning industry and the recycling industry. I mean, that's have some sort of, you know, the right issues with it. I mean, I think we've seen in some in the mining industry, sort of, mines being abandoned by, you know, someone going bankrupt and nobody picking up a tab and, you know, the creation of phantom companies, you know, millions of Australians take care of it and putting stuff into yellow bins and red bins and green bins and then read stories about how it all sends up in the same place and doesn't go anywhere and goes into the same landfill. And I think your own report also that one that was produced in June last year talks about, oh, how did you guys describe it? It was sort of a, it's a, I've kind of never figured it out. The industry just so many changes, you know, you get people to merge and then they get snapped up by others. It's a very transient industry. I think it is very transient, yes. Which sounds like an issue. It shouldn't be a transient issue. Recycling, I get very frustrated in Australia about our recycling and the lack of maturity and the lack of governance and so forth around our recycling industry. Not specific to my own industry, more broadly speaking. Exactly as you say, you know, individual families, they do a great job, they wash out the metal cans, they put them in the recycling bin, they put the plastics in there, they go away and you trust that this will eventually get recycled, find a good home somewhere and all, far, far, far too often. We hear stories of soft plastics stored in a warehouse and then the warehouse burns down or things getting shipped off to other countries. And I would love to see more effort nationally into building recycling industries, waste management in a much better way so that we don't just put things into landfill. I think the high level of governance, particularly at the oil and gas industry, has both through its own efforts and also, honestly, through the scrutiny that it gets from everybody else. Is really driving it towards trying to find the best way as possible to recycle so much this material. And it actually, whole industry, more robust than yours. Yeah. Yeah. That the 40,000 tonnes a year of scrap steel that's going to be generated through the oil and gas industry's decommissioning contributes, in round numbers, it contributes about one tenth of what you need to feed an electric arc furnace to turn scrap steel back into good steel again. So we've got that as an opportunity in there. The high grade stainless and so forth, we have no industry in Australia to recycle that. That will get exported. But if we can consolidate it and export it, we can make sure at least that high grade stainless steel that comes out of the valve from the oil and gas industry, the mining industry, our power industry, will find it's way back into something similar or into some high grade cutlery or whatever that steel itself goes. High grade cutlery. High grade cutlery. If you're going to put food in your mouth, you want to know it's not rusty. But then the plastics and the polymers is a really interesting, really challenging space. Simple plastics, the things that make the water bottles that we buy and things like that, they're relatively easy to recycle. But then you get very quickly into where more complex polymers vehicle tires, you see so many pictures of just mountains of car tires and truck tires around the place. In the oil and gas industry, these flexible cables and flexible pipelines, they are built through both mechanical strength and very clever chemistry in the polymers to last and be almost indestructible. But then when you want to recycle them, you first with having to deal with all of these challenges. So we've got some really, really interesting challenges to work through in there. There's some amazing research going on at a couple of our universities at the moment to start to look at those. The next challenge then is scaling. And the plastics that they're dealing with, the polymers they're dealing with there are not that different from the plastics and polymers that go up to make cables in coal-fired power stations, like we were talking about earlier transmission lines and so forth. So there is a large volume of this. So we have a lot of opportunities. A lot of this work I presume needs to be done sub-seeing at depth. The removal of all our stuff, yep, don't have to get that. That's already an extraordinary working conditions for the people working on the oil rigs as they're operating. I mean, teams of them and they spend the whole weekend sort of pressurized environment and just ready to be able to do whatever it is that they need to do down there. And I guess that's going to be the same thing. So I mean, do we have an specialist? Do we have an fixed betease? Do we have enough funding for this oil? The money is there. The oil and gas companies themselves are all very aware that they are responsible for paying their costs and they all are making sure that they have the money available to cover the costs that they have as these projects go forward. They are all came to explore obviously technologies that make it more efficient, safer and less expensive to do some of this removal work. There are some very clever technologies out there for the removal space particularly. We deal with some really clever technology companies that we have come to Australia to help us with this industry. We do podcasts and webinars the same as you folks do and we actually did a webinar last week with it's actually UK based company. And what they have built is essentially a circular saw that works, so I'll say, that you that has a long, the college has spread about like an extended arm with grabs on it. And this is designed specifically so you can go along when you've got to remove a pipeline from the seabed. You you lay this thing on a grabs hold of a length of the pipeline and then the saw comes down and cuts it to length. You pick it up using these grabs you put it in what you call a basket. So like a half half shipping container on the seabed and then you lift that basket up when it's full and you put it on a badge. And that is such an efficient way to remove this material. It comes out in nice clean cut sections because the ends have been nicely cut you can then go through when you can recycle it, you can clean it out properly. Those sorts of technologies are starting now to come through because people are seeing the volumes and the challenges and the technology needs that we have. It's, yeah, every day is a school day for me, honestly. this. And then you mentioned your short wind industry, which is going to come under your sort of remit, as I understand now, we haven't actually built our first offshore wind farms, but we hope to do so sometime in the next five years. So what can we learn then from, you know, for that industry as it sort of thinks about, you know, I mean, those installations should last 30 years. I mean, they might be able to be upgraded or whatever. A lot of what they do is above the water, but they need foundations, cables, another thing below the water. What are we learning? What can you learn? The learnings, I think the learnings, and this is not just for the offshore wind, this is for any offshore installation. Now when it's being applied in new oil and gas installations offshore as well, is designed for one of two things, either designed to be removed or designed using materials and seek approval as early as possible for the things that you don't want to remove to be allowed to be left in situ. So if you're going to use concrete, let's say if you're going to use concrete for a part of this, make sure that that concrete and the reinforcement that's inside that concrete is as approval or gets prior approval to be left in situ. If you're putting all the structures in design them in such a way that they can be relatively easily removed. That way when you come to have to come to take them out, you know exactly what you've got to do. You can plan for what your liabilities are. They above the waves pace. The turbine blades are the early turbine blades are notorious for being very very hard to recycle, but the new blades are being made with materials that are much much much more friendly to being recycled and reprocessed. Similar with all of the other equipment that's in there as well, that essentially it's built in such a way that you can either remove and recycle or you know or can have as best confidence as possible that the things that are going to be really hard to remove like something like a pile into the seabed has ideally been pre-approved for removals. So we've been left with any sort of fed accomplice which we rather wish we hadn't because things were built 40 or 50 years ago. What's really not with recycling, removing in mind? I think in the I think in the olangas industry there are a few of those around the world that are going to be an ongoing challenge that we have still got to address. There are some what they call concrete gravity structures. So these are essentially, you know, I talked about these steel jackets that we have the top sides on. We have a few that are made of concrete and these things were not built to be removed. Now they concrete is a pretty benign material, but if you've got an 80, 90,000 ton concrete structure, this is no where you're going to get that thing out of the water. So we've got there's a few in Europe, there's a few in Canada's got a couple, there's a few off the Russian coast, we've got three in Australian waters so that those at some point there will have to be a conversation held between the owners and the regulator to agree, you know, what the future is and how we manage those. Beyond that, it's just dealing with these things on a case by case basis. As I said, things like the big the big trunk line, so a big, you know, a heavy duty big sized pipeline that connects an offshore structure to an onshore processing plant. Some of those, because the gas by gets into those is pretty clean, we could probably build a pretty solid case for those to be left in situ, but we have to go through all of the science and everything else to understand that leaving these in situ is is not going to leave a legacy problem for future generations. And I see that in your report, you mentioned sort of NIT-0 on Australia has a target of NIT-0 by 2050. So in what way does that sort of driving either the urgency or the scale of what you guys are doing? Because I guess NIT-0, I don't think it means no or a guess production by 2050, that's probably unlikely, but it assumes a lot less than what's happening now. Yeah, and that will be, I mean, it's, to me personally, I think that's an inevitable transition that we will work through, that we will, that we will find that the older, less energy efficient facilities through both their own age and also just the depletion of the fields that they're drawing from will reach end of life and will be removed. And as they come out, we'll, the ones that are left and the ones that are still to be installed around the world for that matter, will be cleaner and more efficient. So that will help to reduce a portion of that. The next space for us, the next space for me, then is the carbon sequestration space for some of these. The fields that we've drawn oil from and gas from over decades are the ones that scientists and geologists and so forth know the best about. So they're the ones that we know more, that we have the most confidence about repurposing for carbon sequestration. So we have, we have an opportunity there potentially. Potentially. Yeah, I don't know whether the attempts so far have been particularly successful, although they've been sort of less volume or more expense than what has happened. Maybe we're just, oh, it's not easy. It's not easy. Squirting gas, thousand meters back down under the ground into, you know, into something that looks like, that looks like a sandstone sponge is not an easy thing to do and we are learning a lot along the way. But it is to my mind at least and I'm not a geologist by any stretch of the imagination. But to my mind at least it's something that we need to be exploring and we need to be looking at. Similarly, the likes of plastics and polymers, when we're recovering them, we have to find ways where we either reuse them as plastics and polymers. Or we return them to a state where such as a synthetic gas or a synthetic liquid, where we can then use it as an alternative fuel. There's a lot of, you know, there's so many options. There's so many people doing some clever stuff in this space. You know, I guess from our side in the decommissioning space we're doing our piece to try and close down safely, remove, make sure that none of these wells ever leak into the future. There are a few, there have been a few instances or back in the day. We've been drilling wells around the world for about 150, 200 years. That's right. Oh yeah. And let's just say a hundred years ago the technology to plug a well was fairly agricultural. You know, I've seen four, I've literally seen photographs of and I've spoken to friends who found these where the idea to plug a well was to drop a cup of the cannonballs down it. Or a tree trunk because you're trying to fill a round hole so you drop a tree trunk down it or a telegraph pole or something like that. And then just, yeah, and then just hope that it works. Yeah, we're a lot better at it. Now we have some very, very well established standards and technologies for plugging wells, which means now when we plug, and you drop a cannonball down the well, that is not going to stop gas coming around and leaking up and getting to the surface. Now that's never happened in Australia. I've got to stress that. Our oldest wells back to the 50s. We have not, to my knowledge, we've never plugged a well with a cannonball or a tree trunk. We've used high grades, events and other materials to do our work here. But you know, we need to make sure that when we're plugging wells, we plug them properly. And when we plug them properly, they will never flow again. You will never then get random leaks of gas coming out in, you know, your stories from the US where an old well was found under a primary school and it's been leaking gas into the basement for a long time or they find a well 50 meters below the ground on a car park somewhere, things that were plugged using these very old technologies. So, part of what we're doing as well is making sure that when wells get closed, they get closed properly, they get closed for life and they won't leak anymore. Well, Dr. Francis Norton, thank you very much. Thank you for your organisation. I've left you some very weird mental ideas here, haven't I? I'm a bit distressed by all the cannonballs and tree stumps or stuff down wells, but I'm good to hear that that hasn't happened in Australia. All really interesting stuff and a lot of your work is actually going to be happening over your report. You've just done a report outlook, I mean, five puts seven million tons, sixty billion dollars and all of that interesting thing is happening over the next decade, I guess, that focus in Victoria and some of the early offshore wells in the NWA. So, you've certainly got a lot in your place. So my day job is very busy, but it's great to have these opportunities to talk more broadly. We don't get the chance to talk to folks like you that often. So, to have this chance to come on here and talk is absolutely brilliant. Yeah, in fact, no, for us, just to look into a part of the industry that we really look at. So it's been really interesting. So look, we'll let you get on with your busy day and thank you once again for joining this special episode of the Energy Insiders podcast. Absolutely pleasure. Thank you so much. You've been listening to a special episode of Energy Insiders brought to you by Energy Exchange Australia from March 10th to 12th at the Perth Convention and Exhibition Centre. Meet over 200 companies, here from 150 industry leading speakers, and joined thousands of professionals shaping the energy future from oil and gas, Decommissioning CCS, hydrogen to renewables, this is your chance to connect with the entire supply chain under one roof. Best of all, it's free to attend. Secure your place now at www.exaxbo.com.au Energy Exchange Australia, where energy leaders meet. [BLANK_AUDIO]

Podcast Summary

Key Points:

  1. The Centre for Decommissioning Australia (CDA) was established in 2019-2020 to coordinate and prepare Australia's oil and gas industry for a significant wave of decommissioning activity, acting as an independent, not-for-profit industry body.
  2. Decommissioning involves the safe, permanent removal and recycling of offshore and onshore oil and gas infrastructure at the end of its production life, with an estimated total liability of around $60 billion and approximately 6 million tons of material in Australia.
  3. The industry faces major technical challenges, particularly in removing large fixed offshore platforms, and is transitioning from a delayed approach to more timely decommissioning due to regulatory changes following the Northern Endeavour incident.
  4. CDA is primarily funded by a West Australian government grant and membership fees from around 160 partner companies across the supply chain, operators, and government, allowing it to advocate for efficient, safe, and sustainable decommissioning outcomes.

Summary:

The Centre for Decommissioning Australia (CDA) was established in 2019-2020 in response to the oil and gas industry's need for coordination and preparedness for upcoming decommissioning work. It functions as an independent, not-for-profit body. Decommissioning refers to the obligation to safely and permanently remove infrastructure at the end of an asset's production life.

In Australia, this represents an estimated $60 billion liability involving about 6 million tons of material, primarily steel and concrete, from both offshore and onshore sites. The work is technically challenging, especially for large fixed offshore platforms, with major removal projects scheduled, such as in Victorian waters. A key driver for CDA's creation was regulatory change after the Northern Endeavour incident, which shifted industry practice towards more timely decommissioning rather than delayed removal.

CDA is funded by a West Australian government grant and fees from its approximately 160 member companies across the supply chain. Its role is to coordinate the industry, attract technology, and advocate for safe, efficient operations that maximize recycling and proper well plugging, while its current focus remains on oil and gas, though future offshore wind will face similar regulatory requirements.

FAQs

The Centre for Decommissioning Australia is an independent, not-for-profit industry body established in 2019 to coordinate and support the decommissioning industry. It acts as a central point to promote upcoming work, attract technology and investment, and help the industry manage the increasing volume of decommissioning activities safely and efficiently.

Decommissioning is the obligation to safely and permanently shut down and remove oil and gas assets at the end of their production life. This includes removing facilities and infrastructure, decontaminating materials, and restoring sites to a condition satisfactory to regulators, with a focus on full removal where possible.

No, decommissioning in Australia applies to both offshore and onshore oil and gas assets. While the initial focus has been on offshore due to its scale, there is also a significant onshore footprint that will require decommissioning as assets reach end of life.

Yes, future offshore wind installations in Australia will be subject to similar legislative requirements as oil and gas, mandating decommissioning. However, onshore wind and solar currently face regulatory challenges regarding liability and processes at end of life.

The Centre is funded through a combination of a multi-year grant from the West Australian government and membership fees from around 160 partner companies, including service sector firms, supply chain providers, oil and gas companies, and government entities.

The offshore oil and gas decommissioning industry is estimated at around $60 billion total, involving approximately 5.7 million tons of material, including carbon steel, concrete, non-ferrous metals, and plastics, to be removed and recycled over the coming decades.

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