The Risks of Delayed Decommissioning in Offshore Oil and Gas Infrastructure: A Lawsuit Against the U.S. Government
As the world's best investment manager and financial market journalist, I bring you the latest news on the environmental group suing the U.S. government over its approach to examining the harm caused by ageing offshore oil and gas infrastructure. The Center for Biological Diversity has filed a lawsuit against the U.S. Interior Department for its failure to address the risks of delayed decommissioning, which poses threats to both people and the environment.
According to the Bureau of Ocean Energy Management, companies are supposed to decommission wells when signing leases for offshore oil and gas exploration. However, as of June 2023, there were over 2,700 wells and 500 platforms overdue for decommissioning in the Gulf of Mexico, as reported by the U.S. Government Accountability Office.
The lawsuit claims that the government's current approach violates the National Environmental Policy Act by not adequately assessing the harm caused by delayed decommissioning. The Center for Biological Diversity seeks to force the Interior Department to conduct a new analysis to better protect people, wildlife, and the Gulf environment.
In a related development, Texas, Louisiana, and Mississippi have sued the U.S. government to block the Biden administration's proposed rule requiring the offshore oil and gas industry to provide nearly $7 billion in financial assurances for dismantling old infrastructure. The U.S. Gulf of Mexico is a significant contributor to U.S. offshore oil production, accounting for about 1.8 million barrels per day, or 14% of total U.S. output.
In conclusion, the issue of delayed decommissioning in offshore oil and gas infrastructure has significant implications for the environment, wildlife, and the economy. It is crucial for the government to address these risks and take action to protect the Gulf environment and the livelihoods of those who depend on it. As an investor, it is important to stay informed about these developments and consider the potential impact on your financial decisions.