There are 17 offshore oil platforms in the waters of Cook Inlet, not far from Anchorage.
But did you know that six of those aren’t even pumping oil? That includes one platform that’s been shut off for more than 30 years. The state has the power to force the company that owns the defunct platforms to dismantle them, but that hasn’t happened.
Nat Herz is an investigative journalist working with Alaska Public Media and APM Reports, and he decided to figure out why the platforms are still there.
Listen:
This interview has been lightly edited for length and clarity.
Casey Grove: So, one of these platforms hasn’t pumped any oil since the first President Bush was in office — that’s George H.W. Bush — back in 1992. What’s the story with that?
Nat Herz: Yeah, I don’t know about you, but I was barely alive at that time. So, that’s called the Spurr Platform. It’s about 50 miles west of Anchorage in Cook Inlet, a little north of Nikiski. It was built in Alaska’s first oil boom, in the 1960s, when around 2.5% of all the oil pumped in the U.S. came out of the Inlet area. But by the 1990s, Spurr was losing money, and its owner decided to shut it off. So a top state oil and gas regulator told the company it was going to need to start the process of tearing it down and cleaning up the area.
CG: It’s been more than 30 years and Spurr is still there. What happened?
NH: This is according to the state’s formal correspondence with Marathon, which owned the platform at the time. It just kind of backed down, and pretty quickly, with no explanation. It took 15 more years before the state finally started to put some pressure on the company. But that all got put on hold when Marathon sold its interest in Spurr to a company called Hilcorp. Hilcorp now owns all but two of the platforms. And the state gave it years more to study reviving Spurr. Finally, last year, Hilcorp acknowledged that Spurr and its companion platform were no longer usable for oil production. But it still says the infrastructure could be useful in the future, and it doesn’t want to take it out yet.
Read the full story: This oil platform stopped pumping 30 years ago. Alaska still won’t make the owner tear it down.
CG: Why do the companies seem so reluctant to tear down these platforms?
NH: The short answer is cash money dollars. It is expensive. Removing all the platforms and related equipment could cost in the neighborhood of a billion dollars. That’s billion with a B. And so the companies want to avoid doing that for as long as possible. Richard Charter is an environmentalist who’s been pushing for the removal of the defunct oil platforms in the Gulf of Mexico and off the California coast, and he says the companies have run a similar strategy there.
Richard Charter: Well, in the law terminology, I think it’s delay, deny and diddle around.
NH: In the Gulf of Mexico, oil companies have convinced the government to let them leave some derelict platform infrastructure in place. They argued that this stuff is habitat for marine life. The government went along with it, but they made the oil companies pass along half of the money they saved to the taxpayers.
CG: So what have oil companies said the Cook Inlet platforms might be good for?
NH: Hilcorp and Marathon and the other companies that have owned Spurr and the other platforms have been throwing ideas for reuse for decades.
They’ve argued that the platforms’ giant legs help break up ice in the inlet, and that makes it easier for cargo vessels to navigate. They’ve said the Coast Guard or military could use them for research or training. Or they could be used for renewable power production: wind farms or maybe some kind of cutting edge tidal power generation.
CG: Has any of that actually happened?
NH: Well, it sounds like they do break up the ice, but not in terms of reusing the platforms for some new purpose. At least not yet.
It is true that Cook Inlet is a great place to potentially generate power from the tides. And so Hilcorp has been working with the University of Alaska to gather data and explore the idea. The company is also studying the conversion of platforms for wind power. But it’s far from clear that all of the platforms, or even any of them, will work to do this on an industrial scale.
CG: Is there any real problem with leaving these platforms in the water for that long?
NH: That’s really the billion dollar question here. They are certainly an eyesore, at this point. They’re pretty rusty and dilapidated, and they sit in an otherwise strikingly beautiful place, Cook Inlet. But from a purely environmental perspective, there’s not too much of a risk of collapse or leaks directly from the platforms. That’s based on the experts that I’ve talked to, even some who tend to be critics of the oil industry.
The bigger issue is about financial protections. Imagine a situation, like a spill or a blowout where an oil company is financially stressed or bankrupt. That means they don’t have access to the pretty substantial amount of money that’s needed to pull platforms out. The state has agreements with Hilcorp and other companies that require them to have a certain amount of money guaranteed for infrastructure clean-up. But it’s only a fraction of the estimated overall cost, and the state won’t say exactly how much.
CG: Where does this all stand now?
NH: So, things are definitely starting to get closer to where the state steps in to force Hilcorp to start the process of removal. It’s giving the company five years to see if it can come up with repurposing plans for some of the defunct platforms. Otherwise the state says Hilcorp needs to have the removal process started within five years after that.
The state also says it would be bad policy to push on this issue too hard right now. That’s because of the shortage of natural gas to heat homes and businesses in Anchorage. That gas is produced in large part by these offshore platforms, and officials don’t want to leave companies with less cash to invest in drilling more gas wells.
CG: Did Hilcorp have much to say?
NH: They did not agree to an interview. But they did say that this existing infrastructure in Cook Inlet is critical in ensuring it meets its natural gas supply commitments. And it says it makes significant investments to safely and responsibly decommission end-of-life infrastructure.
Nathaniel Herz is an Anchorage-based journalist. He's been a reporter in Alaska for a decade, and is currently reporting for Alaska Public Media. Find more of his work by subscribing to his newsletter, Northern Journal, at natherz.substack.com. Reach him at natherz@gmail.com.
