The question of how to efficiently use existing infrastructure to accelerate the energy transition is front and centre in the race against climate change.
Most offshore oil and gas infrastructure in Australia will reach the end of its lifespan and require decommissioning in the next 30 years, with some being decommissioned in the next decade, and whilst the current regulatory approach in Australia requires the removal of all offshore infrastructure as the 'base case', innovative alternatives to decommissioning offshore oil and gas infrastructure is gaining traction.
"Repurposing oil and gas infrastructure for offshore renewable energy projects presents both opportunities and challenges for governments, regulators and proponents alike.
The regulatory and economic case for repurposing
Decommissioning in Commonwealth waters is governed by a suite of legislation, policies and standards, as well as a range of international conventions. Nationally, the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth) (OPGGS Act) and associated regulations provide the legal framework for exploration and recovery of petroleum and greenhouse gas activities in Commonwealth waters.
As is often the case, there is scope for exceptions to full removal if titleholders can demonstrate that an alternative decommissioning approach delivers equal or better environmental outcomes whilst meeting all applicable requirements under the OPGGS Act and regulations, including well integrity and safety-related matters, and other applicable laws such as the Environment Protection (Sea Dumping) Act 1981 (Cth).
"So, there is indeed scope for repurposing offshore oil and gas infrastructure," says Perth-based environmental law specialist, Jade Nelson, Special Counsel, DLA Piper.
Economic considerations
The Australian government estimates it will cost industry at least $60 billion by 2070 to decommission oil and gas infrastructure and the Centre of Decommissioning Australia estimates 5.7 million tonnes of material will need to be removed from offshore facilities.
Rather than decommissioning oil and gas infrastructure – which is an expensive and environmentally challenging process - repurposing it for alternative renewable energy applications may significantly reduce costs associated with new construction and accelerate project timelines, allowing developers to bring projects online more quickly, and assist the Australian Government's pursuit of its net-zero commitments and targets of 82% renewable energy into electricity grids by 2030.
Environmental considerations
Decommissioning oil and gas infrastructure typically involves complex logistics, leading to increased carbon emissions and potential environmental disturbances.
"By repurposing even some structures and pipelines, ecological impacts associated with dismantling and reworking marine environments may be avoided.
And some players in the oil and gas industry are already exploring this narrative as part of their proposed decommissioning plans," Jade Nelson added.
Such an approach also aligns with the drive to reduce waste and promote the circular economies.
Potential renewable applications
Decommissioning offshore oil and gas infrastructure is an important aspect of the energy transition. Innovation, along with cost and time-efficiency, is driving renewable applications to explore the utilisation of repurposed offshore platforms including to:
- support turbine installations, which has the potential to significantly reduce the costs and logistical challenges of new offshore wind projects;
- support the installation of floating solar technology in the production of solar energy;
- develop energy storage solutions such as batteries or hydrogen production facilities; and
- develop multi-purpose offshore platforms to harness multiple energy sources (e.g. wave, wind).
While the potential for repurposing offshore oil and gas infrastructure is significant, several challenges will need to be addressed as a matter of priority," Jade Nelson said. Challenges such as:
- Regulatory – The existing regulatory environment must be adapted to facilitate the repurposing of oil and gas infrastructure for renewable energy projects. Frameworks allowing for a safe and sustainable transition of these structures to new uses must also be developed in a comprehensive fashion.
- Technical – The technical challenges associated with modifying existing platforms to support renewable energy in the harsh offshore environment must be addressed with safety, resilience and sustainability as paramount considerations. Addressing these challenges will involve detailed assessments of the structural integrity and suitability of the existing infrastructure to ensure an efficient and safe transition to renewable energy applications.
- Stakeholder – stakeholder collaboration and engagement will be critical, including with government, environmental and indigenous groups and local communities, at the onset of the planning process to ensure concerns are addressed, and support fostered, for the repurposing initiative.
Repurposing offshore oil and gas infrastructure offers a unique opportunity to accelerate the renewable energy transition while optimising existing offshore end-of-life infrastructure. Embracing this innovative approach will facilitate a more sustainable energy future and assist both government and business' pursuit of their net-zero commitments and renewable energy targets. Navigating these opportunities and their respective challenges will require a mutual willingness to collaborate, innovate and lead sustainable change.
