Secret subsidy: Tens of billions in North Sea clean-up costs to be dumped on the public

15 Dec 2016 admin

North Sea oil has generated billions upon billions of pounds in corporate profit since drilling began in the 1960s and 70s. But as oil extraction shifts into decline, it becomes time to clean up the mess – the rigs, pipelines and platforms that dot the sea floor.

A general principle in law and common sense is “polluter pays”. If you make a mess, you clean it up. This was the case with North Sea oil – until lobbying changed the framework.

Over the past 15 years, oil corporations like BP and Shell have demanded ever greater subsidies. Governments in London and Edinburgh backed their demands. In the process, a large part of the liability for decommissioning (removing and dismantling oil platforms) was dumped on the public.

A fiscal timebomb was created. Nobody knows exactly how much decommissioning will cost – the lowest estimates are around £30 billion. A new GMB report estimates it could be over £100 billion – of which taxpayers will have to fund between 50-75%.

That means you and I could be paying somewhere between £50 and £75 billion. For something the oil companies should have sorted out.


Scotland could be a global hub for decommissioning – breathing life into dockyards that lie still.

But, the potential benefits of decommissioning – jobs, busy ports, work for contractors – aren’t even happening. The Northeast of England has won a couple of decommissioning contracts, but Scotland pretty much nothing.

Instead, rigs are being sliced off from the seabed and towed away to Norway and Turkey. The rig which ran aground on Lewis in August was on its way to Turkey.

Trade unions in Scotland are furious – especially as thousands lose their jobs in Northeast Scotland as BP and Shell slash their workforce. But neither London nor Edinburgh governments have an industrial strategy in place to ensure rigs are dismantled in UK docks. Instead, we’re providing the funding for more forward-looking industrial strategies in Norway and Turkey.

We could use the process of decommissioning to build a truly just transition. But instead, it looks like the UK public will pay out over £50 billion to clean up the mess left behind by the oil industry and protect their profit margins.

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