The Federal Government has unveiled its much-anticipated “Roadmap for Establishing a Decommissioning Industry,” a detailed plan aimed at recycling Australia’s offshore oil and gas infrastructure.
The roadmap, released today by Resources Minister Madeleine King, comes as Australia faces a projected $60 billion in offshore petroleum decommissioning activity over the next 30 to 50 years.
Environmental groups such as Friends of the Earth Melbourne (FoEM) have welcomed the release of the roadmap but have voiced significant concerns about its omissions.
FoEM Offshore Gas Campaigner Stan Woodhouse praised the initiative’s long-overdue attention to decommissioning but criticized the lack of meaningful regulatory reform and financial mechanisms to ensure the industry’s accountability.
“In the absence of clear regulation, we can expect cowboy activity from one of the most polluting industries in the world. Holding them to a low environmental standard sets a dangerous precedent for the future of the Australian decommissioning industry,” Woodhouse stated.
Key criticisms include:
Weak Regulatory Standards: Australian regulations governing decommissioning fall short of international best practices. Currently, Australia lacks minimum well-plugging and abandonment requirements, leaving room for environmental and safety risks.
Insufficient Financial Mechanisms: While the roadmap acknowledges the cost of decommissioning must be borne by the industry, it does not specify how funds will be raised. FoEM advocates for extending the offshore petroleum cleanup levy and introducing bonds, similar to those required for offshore wind projects, to ensure funds are set aside for decommissioning activities.
Lack of Purpose-Built Facilities: The roadmap recognizes the need for infrastructure investment but points out that no Australian port currently has the capacity to handle all decommissioning requirements. FoEM has proposed establishing a specialized facility in Geelong to service rigs in the Bass Strait, ensuring proper recycling and disposal.
Woodhouse also expressed concern over ExxonMobil’s proposal to use the Barry Beach Marine Terminal in Corner Inlet—a Ramsar-listed wetland—as a site for breaking down topsides contaminated with hazardous materials, including hydrocarbons and asbestos.
“In South Eastern Australia, where rigs are due for decommissioning, neither Government nor Industry are prepared for the job. A roadmap without clear detail and set dates merely serves to kick the can further down the road,” he said.
FoEM’s recommendations emphasize the urgent need for stronger regulation, a robust funding model, and dedicated facilities to manage the complex and costly process of decommissioning offshore oil and gas infrastructure.
“Decommissioning is expensive and offers no return on investment. Companies catering to shareholder value will naturally try to cut corners. By extending the offshore cleanup levy, the Australian Government can ensure the right thing gets done,” Woodhouse concluded.
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The Albanese Government first signaled its commitment to tackling this pressing issue in May 2023, allocating up to $4.5 million in the federal budget to develop the roadmap.
This initial investment set the stage for identifying repurposing, recycling, and waste disposal pathways for decommissioned infrastructure, as well as exploring opportunities to re-skill oil and gas workers for the emerging decommissioning sector.
Additional funding was allocated to ongoing decommissioning work for the Northern Endeavour Floating Production Storage and Offtake platform, with costs recouped through the Laminaria and Corallina Decommissioning Levy.
Publications from the Offshore Decommissioning Directorate include:
- CSIRO’s (Commonwealth Scientific and Industrial Research Organisation) Exploring regional opportunities and social acceptability for offshore oil and gas decommissioning and resource recovery: summary report
- Australian Academy of Technological Sciences and Engineering’s (ATSE) Offshore oil and gas decommissioning technologies and careers for Australia’s emerging industry report
- KPMG’s O&G decommissioning supply chain: current state report and scoping study
The roadmap represents a critical first step toward addressing Australia’s offshore decommissioning challenge. However, environmental advocates and industry stakeholders alike are calling for clearer commitments and actionable plans to ensure that the process is conducted responsibly, safely, and sustainably.
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