By: Elena Kobrinski Keen, Doctoral Candidate, Harte Research Institute for Gulf of Mexico Studies, Texas A&M University – Corpus Christi
Decommissioning of offshore oil and gas infrastructure has become a focal point of attention in the United States and globally due to an unforeseen moving target: financial responsibility and cost estimation. By law, all offshore oil and gas structural material must be removed, and this process is known as decommissioning. However, events that have unfolded in the past two years in U.S. regulation have highlighted that this legal requirement is not easy to implement. Faced with a $2.3 billion dollar current estimate in backdated decommissioning costs and an outward projected estimate of $30 to 40 billion and counting, the U. S. federal government is looking for answers. They are pressing for a quick response from an oil and gas industry whose financially lucrative interests on the Outer Continental Shelf (OCS) in the Gulf of Mexico are under the strongest governmental challenge in decades.