Drifting Opinions - scripties.uba.uva.nl
Transcript of Drifting Opinions - scripties.uba.uva.nl
Drifting Opinions:
Shell’s Abandoned Oil Platforms in the North
Sea
Julia Eshuis - 11895721
Lotte Zandbergen - 11886862
Sacha van Dijk - 11715790
Wanda Puijk - 11283300
Date: 22 december 2019
University of Amsterdam
Wordcount: 7036
Course: Interdisciplinary Project
Supervisor: Mieke van Vemden
1
Table of Contents
Table of Contents 1
Abstract 2
Introduction 3
Theoretical Framework 5
Interdisciplinary Integration 11
Selected methods and data 13
Results 15
Conclusion , Discussion and Recommendations 19
References 21
2
Abstract
This paper provides an interdisciplinary view on Shell’s abandoned oil platforms located at the Brent
oilfield in the North Sea. Discussed is whether or not the entire platforms should be decommissioned
or if part of the structure should remain. This research uses an interdisciplinary approach by
combining the knowledge of three different disciplines; biology, earth sciences and business
administration. The aim of this research is to give an advice to Shell on this issue. This was done by
making an cost-benefit analysis of the advantages and disadvantages of removing or leaving the
platforms. In which is focused on artificial reefs, which can provide for ecological connectivity. In
addition, the spread of toxins into the abiotic environment and the effects which are associated with
this process negatively affects marine organisms are investigated. Further, the organizational structure
plays a large role in the decision making of Shell, which can be explained by the internal and external
environment.
3
Introduction
The North Sea is one of the largest areas of offshore oil and gas exploitation. But now it is closing
down. Many of the oil rigs have reached their expire
date and the wells are not able to exploit profitably.
Focussed in this research is on the abandoned oil rigs,
owned by Shell. Specifically the Bravo, Delta and
Charlie structures located in the Brent oil field. These
structures are estimated to hold 11.000 tonnes of oil
and toxins mixed with sediment (Cockburn, 2019). The
discussion around the oil rigs concerns the question
whether or not these oil rigs should be completely
decommissioned or if the legs should remain in the
North Sea. Multiple European countries are involved,
the United Kingdom, Germany, Sweden, Belgium,
Luxembourg and the Netherlands. The countries are
involved because they are connected to the marine
protected areas in the OSPAR region (figure 1). The
different actors don’t see eye to eye on the future of the platforms. Shell prefers to leave the concrete
legs in the North Sea, considering the costs of decommissioning (Shell U.K. Limited, 2017). The
United Kingdom supports this, while the other countries firmly disagree with this decision. They align
with the OSPAR agreement, which states that the non-functioning oil platforms should be removed
entirely. This, for protection of the marine environment and out of feare on how other oil platforms
will be handled in the future (Cockburn, 2019) (Molenaar, & Elferink, 2009). The protected areas
that are covered within the OSPAR agreement are seen in figure 1. Besides the different countries also
environmental organisations, such as Greenpeace, showed concern about the local marine
environment. Fearing for oil pollution in the Brent area, as well about the effect of possible release of
toxins and other harmful substances (Gilblom, K. 2019, October 14). Despite all the concerns, the
platforms became habitats for many species. Uncertain is whether the total North Sea ecosystem will
be affected when the platforms are removed (Wolfson et al., 1979).
The controversy around this issue makes it hard for companies like Shell to make decisions. It is
important for Shell to focus on their market position. Sustainability is a rising trend due to the
consumer demand, many companies are thus forced to anticipate on this trend (Amran & Ooi, 2014).
It’s necessary for Shell to know which decision would be the most sustainable before incorporating it.
Eventually, Shell needs to strive to a more sustainable future to keep a long-term relevant and healthy
organisation (Sluyterman, 2010). On the other hand, the corporate culture of Shell strongly influences
their decision making. This can make it harder to incorporate more sustainable and less profitable
strategies in their management (Schoemaker & van der Heijden, 1992).
An interdisciplinary approach is integrated to discuss this issue. Interdisciplinary research
aims to answer a question or solving a problem that is too complex to to be dealt with on a
4
disciplinary level, instead multiple disciplines are addressed (Klein & Newell, 1997). By the
integration of interdisciplinary concepts, theories and techniques a clearer overview of the complex
problem, the potential solutions and intervening points can be determined. The disciplines used in the
proposal, Earth Sciences, Biology and Business Administration, are suited because they cover most
aspects of the issue. To help organizations like Shell in their decision making the following research
question will be investigated: ‘What are the environmental and business related motivations for
decommissioning (or leaving) the oil platforms in the North Sea?’. The different disciplines, which
are encountered in this problem, will each be individually investigated. The objective is to link these
different findings and provide an interdisciplinary overview of all the theories. Detected will be
whether the removal of the oil platforms is the most sustainable action to implement and how such an
action will influence Shell.
5
Theoretical Framework
Spreading of chemical contamination in the environment
An important source of pollutants is drill waste, which consists of two concepts: drilling fluids and
drill cuttings. For oil extraction, drill fluids, also called drilling muds, are used as counter pressure
against the deep sea pressures and are released into the sea water. This way, no high concentrations of
oil can be released into the sea (Rose, 2009). But, these fluids can contain small amounts of
hydrocarbons and petroleum, which are brought to the surface. Furthermore, it can contain several
metals, like arsenic, barium, chromium, cadmium, copper, iron, lead, mercury, nickel, and zinc. With
high concentrations these metals can become toxic to benthos (Tornero & Hanke, 2016).
The drill cuttings are rock fragments, produced by the drill penetrating into the seabed. As these drill
cuttings accumulate over time, they cause widespread of sediment contamination beneath and around
the platforms, which will also negatively affect benthos as they live on the seabed (Tornero & Hanke,
2016) (McFarlane & Nguyen, 1991).These accumulated drill cuttings are called cutting piles and
contain concentrations of hydrocarbons, heavy metals, dispersed oil, and to a lesser degree
radionuclide. According to the studies of Davies et al. (1984) and Grant & Briggs (2002), that looked
at several sediment samples in the North Sea, the smaller the distance from the platform, the higher
the concentration of oil and heavy metals was found in the sediments.
Another high pollutant of the abiotic environment is produced water. It is the largest waste stream that
comes from offshore oil and gas industries (Fakhru’l-Razi et al., 2009). Produced water is separated
from the oil, a part is injected into a well and the remaining is released into the sea water (Utvik,
1999). The major compounds that are found in produced water are dissolved and dispersed oil
compounds, dissolved formation minerals, chemical compounds, solids and dissolved gasses.
Polyaromatic hydrocarbons (PAHs) that are present in oil, have a low solubility in water, and
therefore the dispersed oil consists of small droplets suspended in the produced water. Further, PAHs
can be persistent in the environment and accumulate in biota (Fakhru’l-Razi et al., 2009) (Utvik,
1999).
When offshore oil rig platforms are being removed, it is likely that the accumulated drill cuttings, also
called cutting piles, will be released into the sea water, due to physical disturbance, including storms
and trawling. Further, biodegradation and other diagenetic processes that might occur in the piles over
the years, can produce other potentially pollutants, like organic acids.Therefore, the longer it takes
before the platforms will be decommissioned, the more pollutants will enter the sea (Bakke et al.,
2013). What is more, cutting piles disturbances will cause benthic disruption. In cases when removing
the lower part of the platforms is not possible or too dangerous, these remaining parts can form
artificial reefs (Tornero, & Hanke, 2016) (Breuer et al., 2004).
6
Once the underwater frameworks of the platforms stay, the steel of the structure will eventually
corrode. Typical steel frameworks consist out of 90% steel, 2% aluminium and 0.3% copper, and can
due to corrosion, leach contaminants such as PCBs, residual oil, iron, lead, cadmium and mercury into
the sea water. These contaminants will pollute the marine environment and can accumulate within in
fish and other organisms (Adedayo, 2011). The steel corrosion rate depends on the depth beneath sea
level. The highest corrosion rate occurs in the splash zone, which has a maximum of 16 mils per year
(which is the same as 0.406 mm per year). The lowest corrosion rate is seen at the sea bottom, which
has a minimum of about 2.5 mils per year (same as 0.064 mm per year) (Ault, 2006). However,
according to Li et al. (2004), sea water with sand can also cause for erosion of the steel below the tide
levels. As a large area of the North Sea contains sand at the sea bottom, the corrosion might also take
place at the bottom of many platforms in the North Sea.
In addition to the cutting piles that have formed because of drilling waste, most contaminants that
were generated during the drilling practices were stored in underwater tanks near the oil platforms.
These tanks are stored in the concrete structures of the platforms and they were used for the refining
and cleaning of the produced water that has been in contact with oil particles (appendix 2). The
storage tanks contain produced water, sand and clay particles and crude oil. Depending on the
materials of the tanks, they can have a life spend differing from 1 to 30 years. If the tanks are treated
with corrosion resistant paint, the life spend can be extended slightly (Anderson, 1968). If the tanks
have the be removed in case of decommissioning, then firstly the tanks need to be emptied. This is
done by drilling a hole in the walls of the suburged storage tank. The liquid is then pumped out
through a pipeline (Kruger & Rossitto, 1974). The drilling of the hole in the tank needs to be executed
carefully to avoid spills. Operations such as these are risky since there is a change of leakage of the
insides to the environment. In addition, these tanks contain large amounts of contaminants and if
released all at once could cause serious harm to the organisms surrounding the submerged tanks
(appendix 2).
Effects of chemical contamination on biota
The effect of metals released in the environment on biota depends on whether they are biologically
essential for organisms or not. Nonessential metals do not have a biological function in organisms,
and their toxicity increases with rising concentrations. The essential metals, that are entering the
abiotic environment are necessary for biological processes in organisms and can cause serious
problems in case of too high or too little concentrations. Toxicity of essential metals can occur at high
concentrations or in case of metabolic deficiencies (Sfakianakis et al., 2016).
If in a polluted area the transfer of heavy metals in high concentrations can lead to tissue damage in a
higher food chain level, this relationship is called the food chain effect (Dallinger, Prosi, Segner &
Back, 1987). Accumulation of metals is either due to the uptake through contaminated water of
sediment, or by eating contaminated food sources.
7
Algae are positioned at the bottom of the food chain. It is known that algae can absorb heavy metals,
this process is known as biosorption. Biosorption is described as the passive uptake of surrounding
metals. Biosorption is a metabolically passive way of metal uptake, meaning no energy is needed to
be able to take up ions. Since the process is passive, there is no selection for specific metals. Also,
biosorption of metals can occur in dead biomass, continuing to take up metals due to the
concentrations difference between the cell and the environment. Since the metals do not enter the cell
but stay in the cell structure, biosorption does not cause toxicity of the algal cells.
Bioaccumulation differs slightly from biosorption. Bioaccumulations is the build-up of substances in a
cell, due to active uptake of the substance. Active uptake means that energy is needed from the
organism to be able to take up the metal. Bioaccumulation leads to an increase of metal concentration
inside the cell, when concentrations run too high risk of toxicity is present. Heavy metals, such as
copper zinc and cobalt, can have adverse effects on the cell growth, metabolism and photosynthesis
efficiency of the algal species. According to Dallinger et al., (1987) there are three main ways in
which heavy metals can enter the biological system of fish. The first one being entry through the gills,
the second way is through the digestive system and the third, although in lesser extend is absorption
through the skin surface.
Nevertheless, recently researchers have discovered that the biosorption and bioaccumulation
processes of algae can in fact help clean up contaminated sites (Chojnacka, 2010), (Jahan, Mosto,
Mattson, Frey & Derchak, 2004). The idea behind this is that the algal biomass, either dead or alive,
will take up metals due to the high concentrations of metals outside the cell. When surrounding metal
concentrations increase, the cell will absorb and retain the metals, reducing the concentrations in the
environment. Looking at it from this perspective, algae can actually be used to reduce the amount of
contamination in a specific area. In theory these algae can be used to clean up the contaminated sites
at the abandoned oil rigs in the North Sea. However, the studies conducted on algal removal of toxins
has only been performed in laboratory settings and no conclusions can be drawn about if the metal
removal by algae can be released in natural marine environments
Fish take up metals mainly through the gills and digestive system. Whether the substance becomes
toxic depends on the concentration, metal form, distribution and fish species. Gills of fish are the
primary organs of gas exchange, they play an important role in the uptake of essential metal ions from
the environment. Through the gills the metals are dispersed throughout the different organs, some
organs accumulating more metals than others (Dallinger et al., 1987).
According to Sfakianakis et al. (2016) heavy metals have been associated with a number of fish
deformities in natural populations. Multiple physiological systems in fish are affected by metals and
this can lead to destructive effects on the survival, growth rate and welfare of fish. According to
Dallinger et al., (1987) metal contaminated food sources pose a much higher risk to fish than the
absorption of metals through contaminated water. A reason for this is that contaminated water holds a
much lower concentration of metals than contaminated algae or fish, which is eaten by other fish.
8
Dallinger et al., (1987) showed that marine ecosystem contamination is mostly related to elevated
metals levels in sediments macrophytes and benthic animals rather than high concentrations of metals
in water. Since microalgae such as Chlorella vulgaris are benthic organisms, meaning they live in the
sediment of the seafloor, these algae can be exposed to and take up high concentrations of heavy
metals. These metals can be transferred to higher trophic levels and if concentrations reach high
enough, the tissues of marine animals can become damaged. Nevertheless, as Dallinger et al, (1987)
mentions, the experiments done to prove this were done in an experimental setting, where all food
sources for the observed fish were injected with high metal concentrations. Since in natural
environments not all food sources are necessarily contaminated with high metal concentrations and
the fish can choose their prey, the result may be invalid and not representative for natural ecosystems.
In a study conducted by Sankhla & et al. (2016) showed that fish that have been subjected to chemical
pollution could contain of high concentrations of cadmium and lead. This may lead to health
complications in humans if ingested and accumulated over time. Complications include renal failure,
damage to the brain, nervous system, and kidneys (USGAO, 2000).
Artificial reefs
The Rigs to Reefs program is developed to turn non-functioning gas and oil rigs into artificial reefs
(Baine, 2002). Artificial reefs are men made structures mimicking characteristics of natural reefs and
placed on the bottom of the sea (Sayer, 2002). Most of the North Sea bottom is covered with mud and
sand, 20% coverage consists of hard substrate such as coarse sands, gravels and rocks. Rigs can
provide a hard substrate within intertidal zones that normally lack these, on which coral populations
can develop (Coolen, 2017). The programs goal is to provide a “win-win” situation for both the
environment as for oil and gas companies. The artificial reefs should support conservation of the
benthic habitat and they should provide cost savings for the oil and gas industry (Macreadie, Fowler
& Booth, 2011).
Furthermore, artificial reefs can function as stepping stones within the matrix of soft sediment in the
North Sea and thus stimulate ecological connectivity (Macreadie, Fowler & Booth, 2011). Organisms
may use the structures to spread to new areas, which normally wouldn’t be reached in a single
generation (Coolen, 2017). Populations persistence normally depends on the ecological connectivity
between different natural reefs. Ecological connectivity is of great importance because it stimulates
many ecological and evolutionary processes. It provides a possibility for ecosystem recovery after a
disturbance, it helps to maintain genetic diversity, it retains species diversity and it creates population
replenishment (Foley et al., 2010). But, recent anthropogenic actions and environmental processes
have caused an increase in the spatial distances between reefs (Cowen & Spongaugle, 2009). This
makes it harder for species to migrate around, and thus for gene flow to occur. The formation of
artificial reefs might thus form a solution for these complications (Foley et al., 2010).
9
The decommissioned oil rigs are used as fishery enhancement devices by stimulating the total fish
species biomass. They are implemented to help localized fishery management, fishery protection,
aquaculture and recreational needs (Sayer, 2002). Questioned by Bohnsack (1989) and Sayer (2002) is
if artificial reefs really stimulate the production of new fish biomass or that fish are just aggregated
towards the artificial reefs from the surrounding areas by instinctive orientation responses or current
and thigmotropic responses. According to Bohnsack (1989) artificial habitats can only add to an
increase in population biomass when fish populations are limited by the availability of habitat (‘the
production theory’). When the amount of available habitat is limited also the risk of predation, food
availability and reproductive output is affected (Macreadie, Fowler & Booth, 2011). So, for reef
dependent fish species, who live isolated on artificial reefs can be more important. When population
growth or other life stages aren’t dependent on reefs, artificial reefs are unlikely to increase the total
biomass (Bohnsack 1989; Aabel et al, 1997).
Shell’s perspective
The organizational structure explains how the company operates and what guidelines they follow
regarding the structural layout of the company and how this affects their decision making (Volberda et
al., 2011). In Shell’s case they started of with a functional structure. A functional structure is defined
by having vertical linkages in each department and a key point in such a structure is hierarchy (Grant,
2002). Advantages of this structure is that it creates economies of scale and in-depth knowledge and
skill development (Volberda et al., 2011). After this structure they moved towards a more complex
matrix structure. However, as the industry Shell is in development they found these structures to be
less profitable and fitting so they slowly transitioned to a divisional structure. A divisional structure is
characterised by having different division within a company, each with the ability to make their own
choices. This creates more independence and can help speed up the decision making process
(Volberda et al., 2011). Another concept is greenwashing. Shell claims to have entered the renewable
energy sources market, however there are doubt whether the actually focus on these sources or just
claim to for better PR (Dahl, 2010). The organizational structure can help explains Shell’s decision
making regarding the oil-platforms.
The internal environment focuses on all the aspects of the company that are within the company.
Some concepts here are the Strengths and Weaknesses, from the SWOT-analysis, and their resources,
capabilities and core competencies. These concepts can help show where Shell’s strong and weak
points are, and how these can be influenced to then influence their decision making regarding the oil
platforms. Moreover, this theory gives more insight into the internal aspects that influence and move
the company (Sluyterman, 2010) (Volberda et al., 2011).
The external environment looks at all aspects that influence a company that are not influences from
the company itself, the influence comes from outside. The external environment is challenging and
complex and it affects a firm’s strategic actions (Volberda et al., 2011). Concepts within this theory
are Opportunities and Threats, from the SWOT-analysis, competition and Porter’s Five Forces model,
10
which analysis the industry’s competitive forces and judges how attractive a certain industry is. By
looking at the external environment Shell motivation for exploiting this industry can be explained and
external factors that could influence Shell to be more environmentally conscious can be sought out
(Eketah et al., 2011)
In conclusion, the organizational structure plays a large role in how Shell makes their decisions and
the internal and external environment largely explain why Shell makes certain decisions. The
divisional structure provides Shell with a division dedicated to the abandoned oil platforms, which can
speed up the decision making process since the division does all the research and all the decision-
making regarding the decommissioning process (Appendix 1). The internal and external environment
can largely explain why Shell would decide to leave the legs of the platforms in place, which is
discussed in the results (Appendix 1)
11
Interdisciplinary Integration
To determine the interdisciplinary integration of this research, two techniques were addressed: the
redefinition technique and the organisation technique. Further, with help of these techniques, an
integration framework (see fig. 1) was made to visualize the connections between the concepts and
theories of the different disciplines. The redefinition technique redefines related concepts in different
disciplines to bring out a common meaning. In this research the common meaning is the effects that
would happen when the platforms will be removed or not. All disciplines will be affected in these two
scenarios, these effects however do differ between disciplines and are different per scenario. The
organisation technique defines commonality between concepts, redefines them, organises them and
maps the causal links between them. The commonality between the concepts is that they will all be
consequences of the removal of the platforms or the remaining of the platforms. Between these
concepts, causal links were made, which is seen in the integration framework.
The framework consists of two sub frameworks: one of the consequences of when the platforms will
stay and one of when the platforms will be removed entirely. Every concepts per discipline is
indicated in a colour, earth sciences in green, biology in red and business administration in yellow.
Between these concepts the causal links are indicated with black arrows. The starts of both
frameworks are indicated in purple.
Sub framework of the platforms that stay in place
When the platforms stay in the North Sea, the spreading of chemical contamination will continue due
to corrosion of the underwater frameworks, which will continue for a long period of time. The
pollutants will accumulate in fish, microorganisms and algae. Due to the food chain, these chemicals
will also accumulate in humans. All this will cause societal upheaval, which will give Shell a bad
reputation and will be put in an uncertain position. However, the platforms can form artificial reefs,
which can provide for conservation of endangered species and increase ecological connectivity in the
North-Sea environment. When leaving the platforms in the North sea, Shell does earn more profit than
when the platforms would be decommissioned. Due to this, there is more money for innovation and
changes in the future.
Sub framework of decommissioning of the platforms
When the platforms will be decommissioned, there is a chance that cutting piles on the seabed will be
disturbed. When the cutting piles will be disturbed, contaminants will leach into the environment for a
short period of time. Consequently, there will be accumulation of contaminants in fish,
microorganism and algae and due to the food chain, they will accumulate in humans. However, when
no disturbance of the cutting piles occurs, there will be no further leaking of contaminants into the
environment. As a result, there will be less societal upheaval against Shell, which will give Shell a
better reputation. However, the removal of the platforms causes a lot of effort and money, which
12
results in a lower profit for Shell. Therefore, Shell will have less money for innovation and changes in
the future.
Figure 2. Integration framework of two scenarios: when the platforms will stay in place and when
they will be removed entirely
13
Selected methods and data
This research uses an interdisciplinary approach to the research question. The issue discussed in this
paper is a complex and interlinked issue that needs to be addressed in an overreaching manner. The
point of interdisciplinary research is to cross the boundaries of an academic discipline to find a middle
ground that overbridges the gaps between disciplines. This research will integrate the theories and
methods of all disciplines involved to give a overarching and insightful viewpoint of the issue.
A complex problem can be researched by investigating the relationship between different institutes.
This is what is implemented during an interdisciplinary research. A complex problem is defined as a
multi-level phenomena involving a mutually interacting actors and factors, and their functions cannot
be localised in any specific component (Tromp, 2018). The issue that is addressed in this paper can be
divided into the social, economic, technical and science system. Society is asking for efficient, cheap
fuel in high quantities. To answer to these demands the technical system created the oil platforms,
which had far reaching consequences for aquatic ecosystems. The platforms are now becoming
redundant and need to be removed. But the current sustainability trend in society pressures the
removal to not be harmful for the environment. At last, the economic sector, in this case Shell, is
directed to be maximum efficient, while winning the most profit at the same time. The removal of the
platforms will bring massive costs, which are preferably avoided. All these multi layered
organisational structures contain different interconnected actors which not act in linear ways and thus
make this problem a complex problem.
When implementing interdisciplinary research boundaries between the different disciplines are
crossed and interactions of the disciplines are searched. Theories, results and insights are integrated
(Menken & Keenstra, 2016). The integration of the different theories can help to bridge the
knowledge gap in this investigation. The total effect of the removal of platforms will be investigated,
instead of looking at the individual effects each theory describes.
Furthermore, this research will consist of a literature review. Therefore, the data used will mostly be
secondary data. It’s important that both the negative and positive effects about leaving or
decommissioning the oil rigs will be obtained per discipline by investigating the peer reviewed
papers. These will eventually be weighed against each other to form an advice for Shell. Further, in
this research no experiments will be set up, but experiments from other scientists will be analysed.
This is done because there is simply a lack in time and money to investigate certain rigs ourselves. In
addition, for background information on the disciplines, several academic school books and online
articles will be used as reference.
To obtain more up to date information, an interview will be done to complete the research. This will
form the primary data for our research. The interview is conducted with Mathijs Smit, who is an
ecotoxicologist for Shell (Appendix 1) (Appendix 2). The interview is held over Skype, on the 4th of
14
december. During the interview we will ask Mathijs about the effects of the platforms on marine
organisms and his idea on artificial reefs. Further, we will discuss the important factors that obtain the
perspectives for Shell on this issue. The goal is to gain more insight in how Shell deals with
interdisciplinary problems, like the abandoning of the oil platforms.
Once the data is collected, important theories and their concepts will be analysed from the literature
and will be described into a data management table (see Theoretical framework). With this theoretical
framework an integrated framework will be made with the help of Draw.io (https://www.draw.io),
which is a program that helps designing diagrams. These the theoretical and integrated frameworks
will help to answer the sub questions of the different disciplines, and they will help to draw a
conclusion to answer the main research question.
Concluding, with help of the literature review, the interview and the frameworks, a cost-benefit
analysis will be made. This will help give a clear overview of the negative and positive effects of
leaving or decommissioning the platforms. Further, it will help to give answer on the main research
question and it helps to provide advice for Shell whether the platforms should stay in the North Sea or
should be decommissioned.
15
Results
Motivations for leaving the platforms
Benefits of leaving the platforms
✓ Restore reef habitats
✓ Increase of local biodiversity
✓ Protection for overfished stocks
✓ Stimulate ecological connectivity
✓ Less toxicity in food chain
✓ Less initial costs for Shell
Costs of leaving the platforms
⨯ Increase Homogeneity
⨯ Infiltration of exotic species / diseases
⨯ Pollutants will continue to leach into the
environment
⨯ Shell’s reputation damage, loss of long-term
profitability of the company
Table 1. Cost-Benefit analysis for leaving the oil platforms in the North Sea.
Benefits of leaving the platforms
Natural reefs are observed to occur on trawling grounds (Fosså, Mortensen & Furevik, 2002).
Trawling is a fishing method, which can cause damage to the ecosystems observed on the bottom of
the ocean (Bergmark & Jørgensen, 2014). The natural occurring reefs support a high diversity in
benthos, but already between 30% and 50% of the natural reefs is damaged by this method of fishing
(Fosså, Mortensen & Furevik, 2002). The artificial reefs that are now developed by the Rigs to Reefs
program restrict access for trawls and thus form a trawling free-zone (Macreadie, Fowler & Booth,
2011). This can stimulate the growth of corals that would otherwise be lost due to human practices,
and provide protection for overfished stocks. Artificial reefs in the North-Sea might thus compensate
for the loss of this habitat, which can increase the ecological connectivity as well. 90% Of the species
that live on the artificial reefs are not observed to be present in the soft bottomed surroundings. So,
Artificial reefs will have a strong effect on the local biodiversity (Coolen, 2017). However, the
solution is not that straightforward. Communities living on artificial reefs can differ noticeably from
communities living on natural reefs. Researched is that hard coral covers on artificial structures are
significantly lower than on natural patches, and that artificial reefs contain a lower diversity in coral
species. One of the explanations for this is that artificial reefs are relatively young compared to natural
reefs (Burt et al., 2009). Researched should be how species composition on artificial reefs will
develop over time. And, if other aspects such as higher sedimentation rates on natural reefs and the
differences in habitat characteristics don’t play to much of a role in determining the reef composition
(Burt et al., 2009).
The abandoned oil rigs still contain tanks filled with liquid waste from the drilling practices. As long
as the tanks remain under water and undisturbed chances of leakage are rather small. However, if the
16
liquid inside the tanks needs to be removed in case of total decommissioning, the chances of leaking
are much bigger. Therefore, if the tanks have to be removed it could be a big and risky operation. So,
leaving the tanks in place would be a safe option to avoid large spills of drilling waste in the
environment. Also, there will be no disturbance of the cutting piles in case of leaving the platforms in
place.
Shell now has a divisional structure, which allows divisions to have their own decision making power.
A divisional structure combined with the vertical linkages the company still has can explain how the
decision around the platforms can be made rather quickly and only involves the people relevant for
this problem. This makes the decision fast, but not necessary democratic, given that not the whole
company can decide on the future of the platforms (Schoemaker, 1993). The internal and external
environment both show the company is in a highly competitive and fast moving industry industry
(Hokroh, 2014), which also explains why Shell would want the least expensive solution for the
platforms, which is leaving the legs (Shell U.K. Limited, 2017). Because, when they save costs then
can use this money to remain relevant and profitable as a company within the oil industry. This is why
having less initial cost is seen as a benefit by Shell.
Costs of leaving the platforms
Ecological connectivity can be increased by creating artificial reefs, this because they function as
stepping stones. But, this increase in ecological connectivity can also have less positive consequences
for the North-Sea environment. First, genetic homogeneity can be increased when it’s easier for
individuals to migrate around a larger area. This makes species more vulnerable to all sorts of events.
Secondly, there will be a reduced change in the occurrence of allopatric speciation (Macreadie,
Fowler & Booth, 2011). And thirdly, it will be become easier for exotic species to access the North-
Sea environment (Page et al., 2006). Also, When Shell decides to let the platforms stay, it can lead to
an increase of chemical contamination. Because the frameworks of the structure will erode
(theoretical framework). Lastly, a cost for Shell can be reputation damage, which can long-term result
in loss of profitability for the company. The decision to leave the platforms let to a lot of protesting by
activists and OSPAR countries that are not in agreement with the decision, which can lead to
profitability loss for Shell (McLean, 2019) (Appendix 2).
Motivations for removing the platforms
Benefits of total removal of the platforms
✓ Shell’s reputation
✓ Alignment with OSPAR Agreement
Cost of total removal of the platforms
⨯ Risks/ costs of removing the entire platforms
⨯ Risk of cutting piles disturbances
⨯ May lead to more toxicity in food chain
Table 2. Cost-Benefit analysis for decommissioning the oil platforms in the North-Sea.
17
Benefits of removing the platforms
The question rises how long the oil industry will remain profitable, given that oil is a finite resource
and will run out (Patin, 1999) (Odell & Rosin, 1980). This also forces Shell to focus on the future and
how to keep a relevant and profitable industry in a future where there may be no more oil left. This
future perspective could force Shell to make more sustainable choices regarding future platforms to be
removed (Millett, 2003).
When Shell decides to remove the platforms entirely, this would be in alignment with the OSPAR
agreement, which states all abandoned oil platforms should be totally decommissioned. This would
remove the discussion between Shell’s decommissioning team and OSPAR, because their decisions
would aligned (Appendix 2).
Costs of removing the platforms
The decommissioning team of Shell performed extensive research, called an comparative assessment
(Appendix 2), on this topic and according to them the risks and costs of total decommissioning are
both high (Appendix 2). This research involved both internal and external factors of the Company
(Appendix 2). Because of this research Shell decided to apply to the United Kingdom Regulator, the
final decision maker, to be an exception on the OSPAR agreement and to leave the steel legs of the
platforms in the sea (Appendix 2).
If Shell decides to remove the platforms, it can lead to high consequences for the environment. It can
for example lead to cutting piles disturbances. The high polluted cutting piles are extended as far as
600 m from the platforms. About 100 to 300 m from the platform, the toxicity in the sediment can
cause a mortality of benthos, such as amphipods (Lakhal et al., 2009). The concentrations hardly
change over time and are likely to remain within the cutting piles. However, when physical
disturbance from instance platform activities, storms and trawling occurs, there is a chance that the
cutting piles surrounding the platforms might be disturbed and will release contaminants into the sea
water (Tornero, & Hanke, 2016) (Breuer et al., 2004). Also, there is a high risk of chemical leaking
from the tanks (Appendix 2).
Since the toxic contaminants in the cutting piles can spread throughout the water if disturbed by
human practices, best would be to leave the cutting piles in place. If these toxins do spread it can
cause a number of complications in the local marine food chain, by transference from lower trophic
levels and eventually these contaminants can reach the human food system. In this case it would be
best for the surrounding organisms and environment to leave the cutting piles and underwater
structures in place and let the toxins stay on the groundbed.
Advice
We would recommend to decommission the oil rigs.The pollutants descent from the tanks form a
higher risk for the biotic environment and food chain than the pollution caused by erosion of the
18
platforms or disturbance of cutting piles.The tanks will only stay intact for a limited amount of years.
Meaning, that the tanks will need to be removed anyway in the future, leaving the platforms standing
is only a form of procrastination. Why take the risk of letting a natural disaster disturb the cutting
piles and tanks. Especially, with the expected increase of natural disasters arising because of global
warming. Thereby, we find it inequitable if only Shell would be aloud to form an exception on the
OSPAR agreement. If all the other oil and gas companies are able to remove their platforms safely,
why not Shell?
Thereby, the benefits arising from artificial reefs have a short term relevance and a high uncertainty.
Artificial reefs don’t deal with overfishing and other environmentally harmful human activities, they
are thus not seen as a long term sustainable solution. In our opinion artificial reefs can be seen as a
temporary way to restore the lost natural reef environment. And, thus be appropriate for mitigating
resource losses or enhancing fish populations because of habitat limitations, until saturation occurs
when reef resources no longer limit populations.
Form a business perspective, this solution would also be the best in the long run, given the depletion
of the oil resources and the reputation of the company.
19
Conclusion , Discussion and Recommendations
In conclusion, the results that are established in this interdisciplinary research are broad,
contradicting and hence display the complexity of this problem. It is a difficult problem to approach
due to the conflicting results owing to the complex marine ecosystem and Shells corporate culture.
In short, the oil rigs that have been used extensively for oil drilling have leaked heavy chemical
around the platforms over the years. If shell decides to remove the lower parts of the platforms, this
may cause the contaminants to spread further than 600 m around the oil platforms. The release of
contaminants will occur in a short period of time. The pollutants could be harmful for the organisms
living in the benthos or higher organisms that eat the primary producers. Further, the total removal of
the structures will be a high risk operation due to technical problems that may arise when removing
the tanks. Which form the biggest concern, when looking into possible ways of pollution.
Nevertheless, the total removal of the oil structures will benefit Shells reputation and the future of the
company due to the sustainable decision.
When Shell decides to let the platforms stay, it can lead to an increase of chemical contamination as
well. Once the underwater frameworks of the platforms stay, the steel of the structure will eventually
corrode and keep on releasing polluting materials. The releasing of pollutants, due to corrosion, will
go on for years. In addition, the leaving of the platforms will benefit Shell financially, because leaving
the structures is the least expensive solution for Shell.
Leaving the platforms in place can provide a habitat for the species that are unable to establish
populations on sandy bottoms. To be clear, this can only be seen as a benefit if it would help the
biodiversity in the North Sea to increase to the level that would have existed when natural reefs
wouldn’t have been destroyed. So, artificial reefs can be seen as a temporary way to restore the lost
natural reef environment. And, thus be appropriate for mitigating resource losses or enhancing fish
populations because of habitat limitations. This, until saturation occurs when the reef resources no
longer limit populations.
More research is needed on several topics to provide an informed decision about the dilemma
of leaving or decommissioning the oil rigs. Firstly, within this interdisciplinary research biology, earth
sciences and business administration have been implemented, however the input of other disciplines
can provide a broader perspective on the issue. For instance the political side of the issue, concerning
the laws and regulations of the decommissioning of the platforms, could add to this research being
more complete, given the political nature of the conflict between OSPAR and Shell.
In addition, this research has not included exact calculations or any field work, all conclusions
that have been made were influenced by literature. Artificial reefs are still relatively young compared
to natural reefs. More research is needed to conclude to what extent the species assemblage present on
artificial reefs is similar to those on natural reefs. And, if the mitigating function of the reefs will
actually provide the wanted outcome. Also, the exact concentration and effects of contaminants that
will be released into the environment in both scenarios (decommissioning or leaving) are unknown, as
it they are location- and time-dependent. It is of high importance to make correct comparisons
20
between the pollution rates, caused by erosion, disturbance of cutting piles or the leaking of the tanks.
Furthermore, the complex problem does not only concern a scientific viewpoint, but also a societal
and ethical aspect. Since the wellbeing of marine life is involved, and indirectly the health of humans,
it is important to consider the opinions of the people that may be subjected to the negative effects of
the removal or leaving of the oil platforms. More research on the subjects mentioned above should be
conducted to tackle the issue in a more informative and educated approach.
Despite the shortcomings of this research, an advice is given to Shell. When looking at the
costs and benefits of leaving or decommission of the platform, it can be concluded that to ensure as
less damage as possible, the platforms should be decommissioned. Leaving the platforms standing is
only a way of procrastination, as the tanks will not stay intact permanently. What is more, due to
climate change, disasters, as storms, are expected to rise, which will lead to cutting piles disturbances
even so. Further, artificial reefs are not seen as a long term sustainable solution, due to short term
relevance and a high uncertainty. Form a business perspective, this solution would be the best in the
long run as well, given the depletion of the oil resources and the reputation of the company, by
accepting the OSPAR agreement.
21
References
Aabel, J. P., Cripps, S. J., Jensen, A. C., & Picken, G. (1997). Creating artificial reefs from
decommissioned platforms in the North Sea: Review of knowledge and proposed programme of
research. Stavanger, Norway: Rogaland Research.
Adedayo, A. M. (2011). Environmental risk and decommissioning of offshore oil platforms in Nigeria.
NIALS J. Environ. Law, 1, 1-30.
Amran, A., & Ooi, S. K. (2014). Sustainability reporting: meeting stakeholder demands. Strategic
Direction.
Anderson, R. (1968). Undergroud liquid storage system. Chicago: Oil Company Chicago.
Ault, J. P. (2006). The use of coatings for corrosion control on offshore oil structures. Journal of
protective coatings & linings, 23(4), 42-46.
Baine, M. (2002). The North Sea rigs-to-reefs debate. ICES Journal of Marine Science, 59(suppl),
S277-S280.
Bakke, T., Klungsøyr, J., & Sanni, S. (2013). Environmental impacts of produced water and drilling
waste discharges from the Norwegian offshore petroleum industry. Marine environmental research,
92, 154-169.
Bergmark, P., & Jørgensen, D. (2014). Lophelia pertusa conservation in the North Sea using obsolete
offshore structures as artificial reefs. Marine Ecology Progress Series, 516, 275-280
Bohnsack, J. A. (1989). Are high densities of fishes at artificial reefs the result of habitat limitation or
behavioral preference?. Bulletin of Marine Science, 44(2), 631-645.
Breuer, E., Stevenson, A. G., Howe, J. A., Carroll, J., & Shimmield, G. B. (2004). Drill cutting
accumulations in the Northern and Central North Sea: a review of environmental interactions and
chemical fate. Marine Pollution Bulletin, 48(1-2), 12-25.
Burt, J., Bartholomew, A., Usseglio, P., Bauman, A., & Sale, P. F. (2009). Are artificial reefs
surrogates of natural habitats for corals and fish in Dubai, United Arab Emirates?. Coral Reefs,
28(3), 663-675.
Chojnacka, K. (2010). Biosorption and bioaccumulation – the prospects for practical applications.
Environment International, 36(3), 299–307. doi: 10.1016/j.envint.2009.12.001
22
Cockburn, H. (2019). North Sea oil rigs set to be abandoned while still full of crude oil and
chemicals. Retrieved september 18, 2019, from https://www.independent.co.uk/environment/north-
sea-oil-rigs-abandoned-shell-environment-climate-pollution-greenpeace-a9091651.html\
Coolen, J. W. P. (2017). North Sea reefs: benthic biodiversity of artificial and rocky reefs in the
southern North Sea (Doctoral dissertation, Wageningen University).
Cowen, R. K., & Sponaugle, S. (2009). Larval dispersal and marine population connectivity. Annual
review of marine science, 1, 443-466.
Dahl, R. (2010). Green washing: do you know what you’re buying?.
Dallinger, R., Prosi, F., Segner, H., & Back, H. (1987). Contaminated food and uptake of heavy
metals by fish: a review and a proposal for further research. Oecologia, 73(1), 91–98. doi:
10.1007/bf00376982
Davies, J. M., Addy, J. M., Blackman, R. A., Blanchard, J. R., Ferbrache, J. E., Moore, D. C., ... &
Wilkinson, T. (1984). Environmental effects of the use of oil-based drilling muds in the North Sea.
Marine Pollution Bulletin, 15(10), 363-370.
Fakhru’l-Razi, A., Pendashteh, A., Abdullah, L. C., Biak, D. R. A., Madaeni, S. S., & Abidin, Z. Z.
(2009). Review of technologies for oil and gas produced water treatment. Journal of hazardous
materials, 170(2-3), 530-551.
Fosså, J. H., Mortensen, P. B., & Furevik, D. M. (2002). The deep-water coral Lophelia pertusa in
Norwegian waters: distribution and fishery impacts. Hydrobiologia, 471(1-3), 1-12.
Foley, M. M., Halpern, B. S., Micheli, F., Armsby, M. H., Caldwell, M. R., Crain, C. M., ... & Carr,
M. H. (2010). Guiding ecological principles for marine spatial planning. Marine Policy, 34(5), 955-
966.
Gilblom, K. (2019, October 14). Greenpeace Scales Shell’s Offshore Brent Platform in Protest.
Retrieved December 1, 2019, from https://www.bloomberg.com/news/articles/2019-10-
14/greenpeace-scales-shell-s-offshore-brent-platforms-for-protest.
Grant, A., & Briggs, A. D. (2002). Toxicity of sediments from around a North Sea oil platform: are
metals or hydrocarbons responsible for ecological impacts?. Marine Environmental Research, 53(1),
95-116.
Hokroh, M. A. (2014). An analysis of the oil and gas industry’s competitiveness using Porter’s five
forces framework. Global Journal of Commerce and Management Perspective, 3(2), 76-82.
23
Jahan, K., Mosto, P., Mattson, C., Frey, E. & Derchak, L. (2004) Metal uptake by algae. Waste
management and the environment II. 224-232
Klein, J. T., & Newell, W. H. (1997). Advancing interdisciplinary studies. Handbook of the
undergraduate curriculum: A comprehensive guide to purposes, structures, practices, and change,
393-415.
Kruger, J., & Rossitto, V. (1974). Method and apparatus for removing liquid contaminants from a
submerged tank. New York: West Islip, N.Y
Lakhal, S. Y., Khan, M. I., & Islam, M. R. (2009). An “Olympic” framework for a green
decommissioning of an offshore oil platform. Ocean & Coastal Management, 52(2), 113-123.
Li, Y., Hou, B., Li, H., & Zhang, J. (2004). Corrosion behavior of steel in Chengdao offshore oil
exploitation area. Materials and Corrosion, 55(4), 305-310.
Macreadie, P. I., Fowler, A. M., & Booth, D. J. (2011). Rigs‐to‐reefs: will the deep sea benefit from
artificial habitat?. Frontiers in Ecology and the Environment, 9(8), 455-461.
McFarlane, K., & Nguyen, V. T. (1991, January). The deposition of drill cuttings on the seabed. In
SPE Health, Safety and Environment in Oil and Gas Exploration and Production Conference. Society
of Petroleum Engineers.
McLean, D. (2019, 14 oktober). Greenpeace activists climb North Sea oil rigs to protest
“unacceptable” decommissioning plans. Geraadpleegd op 21 december 2019, van
https://www.scotsman.com/news/environment/greenpeace-activists-climb-north-sea-oil-rigs-to-
protest-unacceptable-decommissioning-plans-1-5023080
Millett, S. M. (2003). The future of scenarios: challenges and opportunities. Strategy & Leadership,
31(2), 16-24.
Molenaar, E. J., & Elferink, A. G. O. (2009). Marine protected areas in areas beyond national
jurisdiction-the pioneering efforts under the OSPAR convention. Utrecht L. Rev., 5, 5.
Odell, P. R., & Rosing, K. E. (1980). Future of oil.
OSPAR Commission (z.d.). Mariene Protected Areas. [Illustration]. Consulted from
https://www.ospar.org/work-areas/bdc/marine-protected-areas
24
Page, H. M., Dugan, J. E., Culver, C. S., & Hoesterey, J. C. (2006). Exotic invertebrate species on
offshore oil platforms. Marine Ecology Progress Series, 325, 101-107.
Patin, S. A. (1999). Environmental impact of the offshore oil and gas industry (Vol. 1). East Nortport,
NY: EcoMonitor Pub.
Rose, M. A. (2009). The environmental impacts of offshore oil drilling. Technology and Engineering
Teacher, 68(5), 27
Sankhla, M. S., Kumari, M., Nandan, M., Kumar, R., & Agrawal, P. (2016). Heavy Metals
Contamination in Water and Their Hazardous Effect on Human Health-A Review. SSRN Electronic
Journal. doi: 10.2139/ssrn.3428216
Sayer, M. D. J., & Baine, M. S. P. (2002). Rigs to reefs: a critical evaluation of the potential for reef
development using decommissioned rigs. Underwater Technology, 25(2), 93-98.
Schoemaker, P. J., & van der Heijden, C. A. (1992). Integrating scenarios into strategic planning at
Royal Dutch/Shell. Planning Review, 20(3), 41-46.
Sfakianakis, D., Renieri, E., Kentouri, M., & Tsatsakis, A. (2015). Effect of heavy metals on fish
larvae deformities: A review. Environmental Research, 137, 246–255. doi:
10.1016/j.envres.2014.12.014
Shell U.K. Limited . (2017). BRENT BRAVO, CHARLIE AND DELTA GBS DECOMMISSIONING
TECHNICAL DOCUMENT (BDE-F-GBS-BA-5801-00001). Geraadpleegd van
https://www.shell.co.uk/sustainability/decommissioning/brent-field-decommissioning/brent-field-
decommissioning-
programme/_jcr_content/par/tabbedcontent/tab_1385449832/textimage.stream/1486502129278/afeb
af0d673b1d8c54d269f93603a210c208cb54/gbs-decommissioning-td-february2017.pdf
Sluyterman, K. (2010). Royal Dutch Shell: company strategies for dealing with environmental issues.
Business History Review, 84(2), 203-226.
USGAO, 2000. Health Effect of lead in drinking water. U.S. General Accounting Office reports.
Utvik, T. I. R. (1999). Chemical characterisation of produced water from four offshore oil production
platforms in the North Sea. Chemosphere, 39(15), 2593-2606.
Volberda, H.W., Morgan, R.E., Reinmoeller, P., Hitt, M.A., Ireland, R.D., Hosikkon, R.E (2011).
Strategic Management Concepts and Cases Competitiveness and Globalization. Cengage Learning
Emea.