From Rigs to Riches: The promise of oil and gas decommissioning in a just transition

By Peder Ressem Østring - Just Transition Research Collaborative, February 24, 2023

The recycling of oil rigs can provide new jobs within the circular economy, particularly beneficial for oil-dependent regions. If we get it right, the process of cleaning up after the fossil economy can itself serve as a bridge from fossil dependency towards a just transition.

Globally, there are over 7000 offshore oil and gas platforms. Together with other structures and pipelines, these form an impressive built environment. If we are to have a fighting chance of keeping global warming well below 2°C however, virtually all of these installations would have to be shut down, dismantled and recycled. This process — known as offshore decommissioning — is already taking place, but will see a dramatic increase in the coming decade. It will be increasingly necessary to confront the ways in which decommissioned infrastructure is handled, both with regards to the environment and labour conditions.

A case study of the decommissioning of oil and gas infrastructure in the North Sea shows some of both the possibilities and challenges decommissioning presents in terms of a just transition.

While some oil companies would like to leave the oil platforms in the sea, eagerly promoting the idea of repurposing old rigs as artificial reefs, this is not allowed under current regulation. After the plans of Royal Dutch Shell of dumping the oil storage tanker Brent Spar in the North Sea in the 1990s was met with massive public scrutiny and campaigns from environmental organizations, regulations came in place that effectively banned the practice of abandoning manufactured structures in the North-East Atlantic.

Companies have since sought other ways of disposing of the problem with structures put out of commission. Another approach for cutting costs for the oil supermajors has been to send old floating rigs for breaking in the global South. This has taken place under horrendous conditions for both workers and the environment, as has been uncovered by the BBC.

Both these false solutions are in reality ways of externalizing costs of cleaning up after the fossil companies. Both approaches should be rejected, while insisting on the principle that the polluter should pay.

In Norway, the country with the most offshore oil and gas structures in the North Sea after the UK, there is a strong discourse underlining the importance of offshore jobs. With well over 150,000 jobs tied to the fossil industry, many households and communities are deeply embedded in what has been described by several scholars as ‘the oil industrial complex’. However, some of these workers could be engaged in the process of shutting down and cleaning up after this industry.

Today, a couple of hundred people are working in one of the two active demolition yards in Norway, both of which are located in the oil-dependent south-western regions. The largest barrier for this number to increase has been found to be the unpredictability of when large-scale decommissioning projects will take place. Oil companies can change their plans about when to decommission on a whim, based on the volatile fluctuations of the price of oil and other factors. As a result, the industry relies heavily on temporary workers in conjunctures of peak activity, while very few are employed full-time.

The good news is that a planned phase out of the oil and gas industry would lead to a substantial increase in the number of people engaged with recycling components from the mastodons of the North Sea. Moreover, the skills of demolition workers are highly overlapping with competence currently employed in the oil and gas supply industry, where whole communities along Western Norway are reliant on the jobs that constructing new oil platforms, vessels and infrastructure can provide.

Building the future society in a carbon-constrained world would have to entail making use of the physical infrastructure inherited from what Andreas Malm calls fossil capital. This is suggested by research grappling with how the world can sustainably create a whole new energy infrastructure without exceeding planetary boundaries in the process. To break away from our current carbon lock-in, we need the rapid deployment of renewable energy on a mass scale. However, structures such as windmills have an insatiable hunger for large quantities of steel, copper and aluminium. Interestingly, these components are already being recovered in significant numbers from decommissioned oil platforms.

Moreover, the rapid expansion of offshore wind compels us to find ways to ensure that these structures are handled in a rational and environmentally conscious manner after they have been worn out. This needs to happen in a way that both maximizes recycled material, while ensuring decent conditions for workers. As wind turbines have an expected operating lifespan of around 20 to 25 years, windmills that were installed in the 1990s and early 2000s are now nearing retirement. As these structures start to be put out of commission, we are faced with a virtual tsunami of offshore tonnage coming from the first generation of offshore windmills, set to dwarf that coming from offshore oil and gas. This is as much an opportunity as it is a challenge. Done right, the decommissioning industry can be a way to secure green jobs and lessen the need for extractive industry, all the while making use of the skills of oil workers in the supply industry.

Labour unions that up until now have been lukewarm to the talk of a green transformation would have a greater incentive to support a plan that involves the prospect of decent new employment for their members. Unions will also play a key role in ensuring that the jobs within decommissioning are decent, safe, and well paid. One major challenge will be to avoid the proliferation of dirty and dangerous jobs in the wake of the relatively lucrative employment found in the fossil industry. Getting organized labour on board for such a plan will not be easy, but without the collective agency of unions the just transition will be confined to the sphere of rhetoric.

Through a planned phase out of offshore oil and gas, the fossil infrastructure of today could form the basis for the renewable infrastructure of tomorrow. New jobs in the field of recycling can help to ensure that neither workers nor regions deeply embedded in the oil economy are left behind, all the while avoiding the practice of sending off our marine “waste” for breaking in the global South — or simply dumping it the sea. Integrating the decommissioning industry with a programme for a just transition is surely no panacea to the multiple crises we are facing. Still, any meaningful new green jobs that can be created along the coasts of oil-dependent regions like Norway holds the potential of sugaring the pill that a transition otherwise would represent for oil workers and their communities.

Peder Ressem Østring (@pederoe) is a human geographer and adviser at Norwegian People’s Aid where he is writing the report Inequality Watch 2023. At the time of writing he was doing an internship for the Rosa-Luxemburg-Stiftung in Berlin within the field of international climate policy. His research interests include the decommissioning industry of the North Sea and how it can align with principles of a just transition.

This think piece is part of the Just Transition(s) Online Forum. Views expressed are those of the author and do not necessarily represent those of the Just Transition Research Collaborative or its partner organizations.

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author.