Scrap and Storage Markets in the Gulf of Mexico—I. Decommissioning Operations

Abstract

The purpose of this four-part series is to review the scrap and storage markets in the Gulf of Mexico associated with the offshore industry. Very little has been written about the scrap industry related to the oil and gas industry, and thus, our aim is to provide a general overview on the topic summarizing the results of the study (Kaiser and Pulsipher, 2007). We begin with a review of offshore infrastructure in the Gulf of Mexico and the stages of decommissioning that generate waste product. We review the waste disposal hierarchy and describe how structures at the end of their lives are bought and sold.

Keywords:

• disposal options
• offshore structures
• recycle
• scrap steel

Notes

The OCS of each coastal state generally begins three nautical miles from shore for all but two states—Texas and Florida—which are three marine leagues (nine nautical miles), and extends at least 200 miles through the Exclusive Economic Zone.

Unless special circumstances hold. For example, if the operator is pursuing drilling activity on the lease or an adjacent lease, or an active pipeline crosses the lease, then conditions may warrant an extension of the lease termination.

Brokers provide liquidity to the market by taking positions or bringing buyer and seller together.