Offshore oil and gas operations are inherently hazardous to the environment, posing environmental risks and impacts throughout all stages of the operations: exploration, development, production, and decommissioning. Offshore decommissioning consists of the process of planning, funding, and implementing measures aimed at safely closing, repurposing, or removing the infrastructure and equipment used in the exploration and production of oil and gas in the marine environment, and at mitigating their impacts. It encompasses a series of activities, including the safe plugging and closure of wells, the removal of equipment and pipelines, the repurposing of platforms, the disposal of non-usable materials and potentially polluting products, and the cleaning of surrounding areas. In some cases, it also entails the rehabilitation of the extraction site as close as possible to its prior condition. Decommissioning typically occurs after the oil or gas resource is depleted or its production is economically unviable. The impacts of climate change, the imperative of the energy transition away from fossil fuels, and the adoption of increasingly stringent climate policies are likely to push the oil and gas sector to expedite the decommissioning of many of these operations, highlighting the need for robust regulation of liability for the decommissioning of oil and gas infrastructure.
Countries can use various legal instruments for governing oil and gas operations and their environmental risks and impacts, from statutes to decrees or regulations to investor–state contracts. Domestic statutes, decrees, and regulations are the ideal instruments to govern the environmental liability for decommissioning of offshore oil and gas infrastructure, since they apply across the industry and are, in principle, not subject to negotiation with private entities. Statutory and regulatory frameworks can establish the scope of decommissioning (activities, facilities, territory, timing, trigger, etc.), the minimum content and standard of obligations, and enforcement and funding mechanisms.
Martin D. Brauch, Esteban F. Fresno Rodríguez & José L. Gallardo Torres,
Provisions on Liability for Decommissioning Upstream Offshore Oil and Gas Infrastructure in Investor–State Contracts,
Available at: https://scholarship.law.columbia.edu/sustainable_investment/19