Peak Oil is You
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Page added on June 8, 2017
Moored off the port of Rotterdam, Netherlands, Pioneering Spirit looms so large that it is difficult to recognize as a ship. The crew of 450 is dwarfed by the cranes and pipes that dominate the sprawling layers of decks.
For decades, Edward Heerema, head of Allseas, the Swiss-based energy services company, dreamed of building a giant vessel to install oil platforms offshore. But the Pioneering Spirit has found another purpose: dismantling oil fields in the British North Sea.
With oil prices dropping sharply in the last two years, Mr. Heerema said he was now just focused on finding enough work to meet his payroll. “I can’t say how long it will take to pay for itself. Maybe 10 years, maybe 30 years,” he said of the ship.
The British North Sea was once a crucial source of oil for the world. At its peak in 1999, it produced about 2.9 million barrels of oil a day, more than Kuwait or Iraq at the time.
Since then, production has generally been in a long slide as oil fields discovered decades ago are exhausted and high costs discourage new exploration. Its diminishing fortunes have been cemented by the rise of renewables and the push for cleaner alternatives to oil.
“It is one of those signs that we may be at a tipping point,” said Anthony Hobley, chief executive of Carbon Tracker, a nonprofit group that studies the investment risks of the shifting energy landscape. “We may well be at that critical point in history where people will say that this is the point where the oil industry reached its peak and began to decline.”
This spring, the Pioneering Spirit headed to the Brent field in the North Sea, a major oil and gas trove named after the Brent goose. The field helped define the business, giving its name to Brent crude, the global price benchmark for oil.
After 40 years of production, the field is nearly pumped out. And a group of four platforms in the field — giant rigs that stand around 1,000 feet tall and weigh a combined million tons — are gradually being shut down.
This spring, the Pioneering Spirit transported one platform to its final resting place, a shipyard in Hartlepool in northeast England where it is being dismantled and sold for scrap. An industry in itself, this so-called decommissioning process creates jobs and profits along the journey.
Discovered in 1971, the Brent field was one of several major finds that turned the North Sea into a world-class oil region. Companies like Royal Dutch Shell, which operates the Brent field, and Exxon Mobil, its co-owner, focused their investments in the West, after a wave of nationalization in the Middle East and elsewhere.
The North Sea is a vast operation, with more than 300 fields scattered across 95,000 square miles. Shell built four giant platforms in the Brent field, called Alpha, Bravo, Charlie and Delta, capable of withstanding giant waves and hostile weather.
Fields to be decommissioned by 2022
Other North Sea fields
Exclusive economic zone boundaries
Brent field
DENMARK
North Sea
IRELAND
GERMANY
BRITAIN
NETH.
100 MI.
Shell must safely dismantle these monsters and plug more than 100 wells below them. The company estimates that the process will last a decade and cost billions of dollars, some paid by British taxpayers.
Such exercises will be increasingly common in the North Sea and other oil regions. Around 100 platforms are expected to be dismantled in British waters over the next decade.
Shell figures that hiring Pioneering Spirit to cart the platforms to shore where they can be dismantled is cheaper and safer than busting them up at sea. “The biggest risk is putting people on helicopters,” said Alistair Hope, Shell’s project director, referring to the usual means of transportation to offshore platforms.
The oil companies do not want a repeat of the mid-1990s. Back then, Shell’s plan to sink a piece of Brent equipment, called Brent Spar, in the ocean depths caused a bruising fight with environmental groups led by Greenpeace and prompted stricter regulation.
Delta, the first platform to be taken apart, consists of what is known as a topside, a kind of offshore petroleum factory and hotel with accommodation for more than 160 people. The platform rests on concrete legs that weigh a combined 300,000 tons.
In late April, Pioneering Spirit lifted the ungainly structure off the legs and carried it off like a spider grasping prey. Shell wants to leave the concrete stumps, which contain some oil, in place at sea, saying they pose minimal risk to shipping routes and have less chance of polluting the environment that way.
Once Brent Delta reached the port in Hartlepool, the platform became the property of Able UK.
In the mid 1990s, Peter Stephenson, Able’s owner, bought an old shipyard, capitalizing on the industrial area’s decline. When the financial crisis struck, he took advantage of cheap steel prices to invest £28 million in facilities, like a reinforced dock to bear the weight of the platform.
As Able workers break apart the rig, Shell will continue to watch over the process, to make sure that hazardous or polluting material like asbestos or small amounts of remaining oil are handled properly.
Workers will strip off anything valuable, like brass valves or other metal equipment. Larger pieces will gradually be cut loose and brought to the ground. They will most likely be sold to steel mills, which melt scrap to make new metal.
Mr. Stephenson, 70, has squeezed a fortune of an estimated 430 million pounds out of unwanted properties over the last six decades. At 19, he started out buying a broken front loader, a machine for scooping dirt into trucks — then fixing it and hiring it out. He later moved into demolition.
In recent years, Able has dismantled ships for the United States Navy, as well as the French aircraft carrier Clemenceau. He recently began buying idled coal-fired power plants, breaking them up for scrap and redeveloping their sites.
Mr. Stephenson sees value in everything.
He has turned the living quarters of a scrapped BP offshore platform into a makeshift motel and office for workers of drilling rigs that come into the yard for maintenance. A helicopter deck is being cut up for bridging material.
The future of energy is represented, too. A torpedo-shaped device discarded by General Electric was a prototype for a machine that generates electricity from ocean waves.
As the Brent Delta platform moved through the channel, a group of Mr. Stephenson’s friends, family and associates ate roast pork and stuffing, ham and peas pudding and other regional fare in a white tent pitched by the water. Winning a big job is a lift for a region that has been hit by the decline of some mainstay industries like the recently shuttered Redcar steel plant visible in the distance.
“This proves the northeast can still do stuff,” said Marcus Walker, a project director at Coolsilk, a local real estate investment firm.
Mr. Stephenson says the Brent contract will preserve or create up to 50 jobs. His company makes a practice of hiring and buying locally. A catering company called The Old Butchers Sandwich Shop provided food to guests and workers on the yard.
“There have been a lot of peaks and troughs over the last few years,” said Heidi McCullagh, who runs the catering company. “When a contract comes in, you have suddenly got a queue at the door.”
15 Comments on "Digging the Graveyard of Oil’s Past"
rockman on Thu, 8th Jun 2017 7:00 am
These giant lift vessels are rare and very expensive. About 20 years ago the Rockman evaluated a GOM field as a potential production acquisition. Was one of the deepest fixed platforms out there. But had to use the abandonment cost in the economics and it killed the deal. It was going to cost $5 million to just mobilize the rig from the North Sea. And then another $20 million in ops cost (1993 dollars). A bit of trivia: the platform was installed long ago by the company run by President George Bush long before he became the POTUS in 2001.
But fortunately the feds changed the regs at the last moment. We could just cut the too 100′ off the 600′ tall platform and drop it to the sea floor. Platforms essentially become artificial reefs over time so the feds and Texas would rather them stay. So we would just have to put a perminant nav buoy on it and give Texas a $million to monitor it in the future. Getting the abandonment cost down to $5 million made the economics work. And our competition had already gone away. Did some more drilling based on new 3d seismic and the field, which changed hands long ago, continued to produce. Also allowed another field in the area to be economically developed by tying into our production equipment and pipeline system…for a price. Revenue we had not counted on.
Cloggie on Thu, 8th Jun 2017 8:39 am
The story is about the unstoppable decay of the North Sea oil business. 40 billion barrel have been extracted and an estimated 24 billion may still be hidden in the unlikely case that anybody would care to look for them.
The story mentions maritime entrepreneur Heerema and the impression could arise that the poor fellows are filing for bankruptcy soon, but nothing could be farther from the truth:
http://www.offshorewind.biz/tag/heerema-marine-contractors/
After 40 years of production, the field is nearly pumped out. And a group of four platforms in the field — giant rigs that stand around 1,000 feet tall and weigh a combined million tons — are gradually being shut down.
Well, there is very lucrative destination for these millions of ton of steel: wind turbines as dumping oil rigs in the North Sea is not allowed. This illustrates the idea that mining for iron ore could gradually decline in the future, because there is so much steel stored above the ground in this form or in the form of cars.
The article doesn’t lose a word about the far more lucrative future of the North Sea after a few decades of oil: offshore wind.
These 200,000 km2 shallow water offer the potential for 2,000 GW nameplate or 1,000 GW average wind power or three times current EU electricity consumption of a 500 million economy (340 GW).
https://deepresource.wordpress.com/2017/06/08/gemini-wind-farm-live-data/
The existing and coming activity in the North Sea will dwarf anything we have seen in the past. 2,000 GW name plate capacity is the equivalent of 200,000 large 10 MW wind towers. These are unlikely going to be build, as there are so many alternative sites in the Irish Sea, Scotland, Baltic and French coast. And then there are all these roofs in Europe still waiting to be covered with solar panels. And then there is biomass, geothermal, etc., etc.
Cloggie on Thu, 8th Jun 2017 8:45 am
http://peakoilbarrel.com/wp-content/uploads/2015/05/A-North-Sea.jpg
North Sea oil production time line.
Sissyfuss on Thu, 8th Jun 2017 10:29 am
Questions, Rock. What is the procedure for capping those deep wellheads and what is the lifespan for said caps?
ALCIADA-MOLE on Thu, 8th Jun 2017 10:54 am
guys I just ate my month old eggs that I hard boiled. I told you it’s hard to get right but when logic is correct it’s very powerful. I told you boiled eggs means no surviving micros and the hard shell protects invading microbes.
I’ll let you know if I die but I doubt it. I believe in my logic, unlike a lot of you out there.
Listen, if peak oil is going to be an issue, don’t you think preserving technques would be useful, especially eggs?
This way you can live a bachelor life and no need for awoman. Don’t get me wrong, I don’t hate women. I just can’t score.
That’s all.
Love one another since if you don’t, the white (non-jewish women) will get stronger. I got my tax bills and I will report to her soon or she will jack up the interests. It’s not “Dah Joos” that do this. Everyone does it except me but only jews get the blame.
I was a paultard and our “R3VOLution” has the word LOVE in it. I lost money tons of money in gold so I’m no longer a paultard.
I only believe in teh 2nd nowaddays ….so that I can tell the bums and the druggies to keep their distance so i can mind my own biz.
LOve and peace to all homies.!
ALCIADA-MOLE on Thu, 8th Jun 2017 11:32 am
don’t forget to take pectin or something to chealate yoru blood of iron. i think cilantro is effective too.
it’d be good if someone do a controlled experiment by sending urine samples pre and post herb intake and see if there’s any changes.
i know cilantro did something major for me. i don’t know how it did it. i’m guessing it chelate heavy metals such as mercury and increased cells’ absorption of sugar.
when i took cilantro, my tolerance of sugar went up! This is not all good because large amount of sugar is bad and I love to binge on it.
But if sugar bothers you, try cilantro for a few days.
guys i was raised a catholic and i became a born again christian when i became a Paultard because Ron Paul was even purer thant all the popes combined. He has this aura around him because I became a true believe, teh kind eric hoffer wrote about.
Anways, don’t believe in anything, any religion, any non religon, or any ideas. there’s always a cult waiting for you, such as the cult of mollyneux. Look up youtube for it.
I don’t want adherences, expres or implied.
anywyas, some of the catholic priests adn waht they said about women would make ISIS blush. Guys, this really damaged my sister mentally . imagine being young and vulnerable to ideas!
Be yourself and reject smart and intresting people guys.
love to u homies.
ALCIADA-MOLE on Thu, 8th Jun 2017 11:39 am
gusy we need to break teh linke to alternative media by becoing our own alt-alternative-media. don’t u think i did my fair share of supporting alex jones when i was a pualtard? i lost of a lot of sheckles on that dude guys.
let the alt-media be wholely funded by Russia.
Don’t you think the belief in liberty does damages? Just ask Snowden and why he doensn’t like Russain food or the weatehr.
Recall in “Spy Catcher” we had educated eliltes from — of all places — Cambrdige University guys. These guys benefited so much fro tehir country but gladly sold tehir souls to the russians.
I can’t score and herew e have Snowden with very high IQ, awesome job, and a hot smoking girlfriend.
I ask you would Ron Paul take responsibility for it? If I have a gf 1/10th as hot as snowden’s I stay put, yes siree.
So we need to break teh alt-media. You already do it with your money but you don’t know it. I shop at big stores because tehy just don’t take my money outright and I have to take them to court…which is a waste of time.
Don’t give any sheckles to people who sole’s job in life is to expel hot air.
Let mollyneux beg the russians.
ALCIADA-MOLE on Thu, 8th Jun 2017 12:05 pm
http://i.dailymail.co.uk/i/pix/2017/06/08/13/40FACE9400000578-4582632-image-a-3_1496925888971.jpg
This marine fought for america then why wasn’t he commended for it? this is crap.
Taliban hid BIN and look what we did to them. Putin said he harbored people who attacked us. Then he said it’s a flase flag. This is somone the alt-media said is very sharp.
Really?
If I have a wife half as beautiful as this marin’s I wouldn’t be a snoden.
Snoden’s gf was 20x hotter and she’s in MOSCOW! crazy.
joe on Thu, 8th Jun 2017 1:09 pm
AM, you on meth?
rockman on Thu, 8th Jun 2017 1:09 pm
Sissy – ” What is the procedure for capping those deep wellheads and what is the lifespan for said caps?” SOP: fill the casing with a cement plug across all sections that were perforated and produced. Then set a “top plug” close to the top of the well and then cut the casing off below the sea floor. Despite what folks think cement actually becomes harder over decades…not weaker. WWI concrete bunkers are harder today then they were 100 years ago.
Which isn’t to say leaks from a plugged well are impossible. But remember the pressure dynamic. In depletion drives the reservoir pressures have been reduced below hydrostatic (pressure from a column of water at that depth) so any potential fluid movement is back INTO the reservoir.
Even in water drive reservoirs with little or no pressure decrease a lot of energy was used to FORCE the oil up the casing to the surface.
Bottom line: plugged and abandoned offshore well are very much less likely to leak oil after they are abandoned then when they are produced. IOW an idled platform is much more of a liability then one that has been abandoned.
A good example: I consulted with a abandonment company years ago. We worked up a bid to plug the wells and remove the platform from a shallow water Louisiana field. Our bid was just $5 million because we could refurbish the platform and sell it. But a hurricane blew it over first. No leaks because the dozen wells had “storm chokes” in them. Like temporary bottle stoppers. A fed regulation while waiting to P&A.
Our bid went from $5 million to $95 million. You always P&A ASAP.
Sissyfuss on Thu, 8th Jun 2017 2:30 pm
Thanks for the insightful and illuminating explanation, Rock. You truly know your schist.
Sissyfuss on Thu, 8th Jun 2017 2:53 pm
You’re a trip, Asshole. And you’re on a trip without leaving the house. Please remove the chip the aliens inserted in your butt. Your dumps will be more effervescent that way. Nanoo nanoo.
Anonymouse on Thu, 8th Jun 2017 4:18 pm
ALCIDA is just trolling y’all. Not as if his name alone doesn’t give enough clues….
Trolling is hardly a bannable offence here, so, just ignore it and eventually, nony, boatard, plantatard, clog-fraud or whichever of the regulars trolls is running ALCIDA this month, will get bored and wander off.
rockman on Fri, 9th Jun 2017 8:53 am
schist = a medium-grade metamorphic rock with medium to large, flat, sheet-like grains in a preferred orientation (nearby grains are roughly parallel). It is defined by having more than 50% platy and elongated minerals.
Jerry McManus on Fri, 9th Jun 2017 10:38 pm
I suppose it’s not all that unusual to decommission big pieces of equipment, but even still, those pictures of Shell’s Delta platform being hauled for scrap…
End of an era?
Maybe I’m being over-dramatic, but this article seemed to sum-up the whole peak-oil story in one big North Sea nutshell.
They did pander a bit to the “peak demand” psy-op, implying folks are simply growing tired of all that dirty old oil which has somehow “cemented” the fate of the oil patch.
I believe the jury is still out on that one…
Otherwise this article is a fine witness to one small but dramatic milestone in the decay of industrial civilization.