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Article

Toward a Sustainable Decommissioning of Offshore Platforms in the Oil and Gas Industry: A PESTLE Analysis

Department of Economics, Management, Institutions, University of Naples Federico II, 80126 Naples, Italy
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Author to whom correspondence should be addressed.
Sustainability 2021, 13(11), 6266; https://doi.org/10.3390/su13116266
Submission received: 29 April 2021 / Revised: 25 May 2021 / Accepted: 28 May 2021 / Published: 1 June 2021
(This article belongs to the Special Issue Innovation and Entrepreneurship for Well-Being and Sustainability)

Abstract

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The growing complexity of environmental challenges has progressively led to the emergence of Sustainable Business Models (SBMs) able to embed economic, environmental, and social flows in a unified value network. All sectors are demanding innovative and sustainable solutions, including the oil and gas industry, which aims to address the issues about the decommissioning of offshore platforms. However, although the relevant literature highlighted the potentialities related to a multi-reuse of these structures, the effect of Sustainable Decommissioning (SD) on macro-environmental factors is still an open question. Based on these considerations, this study follows a Political, Economic, Social, Technological, Legal, and Environmental (PESTLE) analysis according to semi-structured interviews conducted with oil and gas key informants and stakeholders in the Italian context. The results of the analysis can provide a novel thinking for addressing the challenges related to a sustainable decommissioning of offshore platforms and shed light on the importance of synergistic efforts by local entrepreneurship and institutional arrangements to combine economic and environmental sustainability with social needs. This paper can contribute to the emerging field of sustainable business models related to the decommissioning of offshore platforms and suggests avenues for future research.

1. Introduction

Countries, organizations, and citizens have been called to pursue in the coming decades the 17 macro-objectives—also called Sustainable Development Goals (SDGs)—defined by the United Nations General Assembly on 25 September 2015. The SDGs aim to foster the organizational operationalization and integration of sustainability, addressing the current and forthcoming stakeholder needs, and ensure a better and sustainable future for all, balancing the economic, social, and environmental development with a big impact on employment, innovation, climate change, and blue growth [1]. In this sense, there is a growing awareness in the business context of the relevance of sustainability issues and the need to meet the challenge of sustainable development to face increasingly thoughtful environmental and social concerns. For this reason, over the past 10 years, the topic of a Sustainable Business Model (SBM) has become the subject of increasing attention and has grown rapidly in the literature and in several industries, driving companies and scholars to explore new entrepreneurial opportunities for improving the impact of the organizations on the three pillars of sustainability—profit, people, and planet [2,3,4,5,6]. The applications of these models include innovation, management and marketing, entrepreneurship, energy, fashion, healthcare, agri-food, supply chain management, circular economy, developing countries, engineering, construction and real estate, mobility and transportation, and hospitality [6,7,8,9,10]. Moreover, in the oil and gas industry, innovative solutions are demanding the inclusion in competitive strategies of sustainable business models able to support the energy transition and mitigate the effects of climate change and the environmental crisis [11,12]. One of the most urgent issues related to this field, in terms of social, environmental, and technical impact, regards the decommissioning of offshore platforms [13,14,15,16]. All over the world, indeed, there are many offshore platforms which, during the period of operation, have assured the extraction of hydrocarbons into the sea. However, once the reservoir has been depleted or the structure has surpassed its shelf life, they have become large-scale structures whose disposal process is complex and expensive, and impacts the environment. In recent times, the decommissioning activities for offshore platforms have been increasingly discussed, particularly because their service life is approaching the end all around the world. Decommissioning specifically refers to the series of processes involved in deactivating a facility at the end of its life, as well as its deconstruction and dismantling and the removal of components for reuse, remanufacturing, recycling, storage, and/or disposal [17]. The international guidelines stated that abandoned or disused offshore installations or structures on any continental shelf must be removed. However, the considerable costs of decommissioning as well as environmental considerations have led to a gradual change in international regulations toward a more flexible approach if technical estimations allow it. Indeed, experts and scholars have agreed that the partial removal options can deliver better environmental outcomes than complete removal for platforms in terms of biodiversity enhancement, provision of reef habitat, and protection from bottom trawling, aspects that are instead negatively affected by the complete removal [18,19]. This awareness has led some nations to leave obsolete structures to act as artificial reefs and/or to find alternative solutions for their sustainable reuse of these assets [20]. Several scenarios have been studied in the literature, involving the energy production from wind [21,22] and photovoltaic farms [23] in the decommissioned offshore platforms, aimed to produce renewable energy exploited to produce hydrogen [24], to permit the methanation process, or to produce fresh water from the desalination process. In this direction, a Sustainable Decommissioning (SD) is intended as a process that tries to achieve the most efficient and sustainable solution by taking into consideration the technical aspects as well as the environmental impacts, by assessing a multi-conversion of these assets aimed at improving social well-being and local entrepreneurship initiatives [22,25,26]. However, although the relevant literature highlighted the potentialities related to a multi-reuse of these structures, the influence of the sustainable decommissioning of offshore platforms on macro-environmental factors and, particularly, on social well-being and local entrepreneurship is still a collective and open question, especially in the Italian context, which has not yet been investigated in those terms. In Italy, there are 138 platforms nearing the end of their production cycle, which will thus have to be dismantled. In the Northern Adriatic Sea alone, 21 platforms will be decommissioned by 2021–2022 [27].
To investigate the influence of the Sustainable Decommissioning (SD) of offshore platforms on macro-environmental parameters, the study follows a PESTLE analysis (also known as PEST or PESTEL) according to semi-structured interviews conducted with oil and gas key informants and stakeholders—including experts, practitioners, and scholars in the Italian context.
This kind of analysis was originally designed as a tool to assess the external macroenvironment in which an industry or business operates [28]. It is generally considered useful in identifying and understanding the key political, economic, social, technological, legal, and ecological parameters that are likely to affect a complex process such as the decommissioning of offshore platforms. It can help decision-makers reflect on potentialities or issues that are likely to impact on the success of their initiatives. The PESTEL analysis has been applied as a framework for strategic-level decision-making and supports the development of future scenarios and business models [29].
After a literature review on sustainable business models and their influence on the oil and gas industry, the issue of the decommissioning of offshore platforms from a sustainable perspective has been discussed. Afterwards, we illustrate the research methodology based on the PESTLE analysis. We then discuss the results and highlight the main implications and limitations of the research.

2. Literature Review

2.1. Sustainable Business Model (SBM)

Over the years, Business Models (BMs) have become increasingly discussed in academic research and business practice due to their impact on industrial value chains and on the final customer [2,3]. Originally, business models were introduced to articulate value propositions, by identifying a market, recognizing the value chain, positioning the firm, combining assets to produce supply, and detailing revenue mechanisms and cost structures [30]. However, growing environmental concerns, along with the urge to keep up with sustainable development goals, have changed the worldwide competition rules among firms and pushed towards the adoption of sustainable models [5]. In this context, the alternative concept of the Sustainable Business Model (SBM) has been broadly investigated due to its potential to bring a competitive advantage to organizations by boosting the conventional business models, with the aim of meeting sustainable development goals while maintaining productivity and profitability [4]. Thereby, profit generation, which was the main purpose of traditional business models, has been linked to a social and environmental perspective, and the concept of value, originally intended from an economic point of view, is now viewed from a wider perspective [31]. In this way, value creation has surpassed the single stakeholder viewpoint to achieve the wide goal of employing proactive multi-stakeholder management, innovation, and a long-term perspective to meet sustainability goals [5,32]. Compared to the traditional business models, which are characterized by creating, capturing, and delivering value [33], by developing new market opportunities and generating revenue streams [34], the sustainable business model results from the proposal to pursue economic value together with ecological and social value through a progression of continuous practices [35]. Geissdoerfer et al. (2018) examined several definitions used in academic works and proposed the following definition for sustainable business models: “Business models that incorporate pro-active multi-stakeholder management, the creation of monetary and non-monetary value for a broad range of stakeholders and hold a long-term perspective” [5] (pp. 403–404). Therefore, the consolidated literature about sustainable business models has pointed out the creation of customer value as well as the integration of social, ecological, and economic activities [6,36]. Recently, the topic of sustainable business models is rapidly growing in the literature and in several industries, driving companies and scholars to explore new opportunities for improving the impact on the three pillars of sustainability—profit, people, and planet [37]. In this scenario, firms which adopt sustainable business models can achieve optimal “win-win” situations, where economic, environmental, and social benefits—often referred to as the “triple bottom line”—can be realized for relevant stakeholders and networks [38,39,40]. This usually means increased profit and differentiation power for the supplier and reduced environmental load and increased social well-being for the whole network, including suppliers, customers, other stakeholders, and society [41,42,43,44]. In particular, final consumers may be motivated to adopt sustainable innovations because of their positive ecological and symbolic attributes, which refer to environmental benefits and positive characteristics to oneself and others [45]. Research on these models uncovers a variety of ideas about possible directions for solutions to ecological, social, and economic problems by stimulating the dissemination of new technologies, eco-innovations, and forms of organization which can contribute to the firm’s performance in the alignment of their business to more sustainable practices [35,46,47,48].
Although in recent years research on sustainable business models is rising considerably in management studies and in the strategic and innovation management field [49,50,51], how sustainable business models work in the real world is still an underexplored area. The applications of these models include innovation, management and marketing, entrepreneurship, digital, energy, fashion, healthcare, agri-food, supply chain management, circular economy, developing countries, engineering, construction and real estate, mobility and transportation, and hospitality [6,7,8,9,10,52]. In the oil and gas industry, some studies on sustainable business models have been carried out [11,12,53]. However, further research efforts are needed to address the future changes in this industry, due to its harsh operational environment.

2.2. The Impact of Sustainability on the Oil and Gas Industry

In recent years, sustainability has become a key consideration for oil and gas companies which aim to implement serious changes in their competitive strategies and business models. This industry, among the largest in the world, includes the global processes of exploration, extraction, refining, transporting (often by oil tankers and pipelines), and marketing of petroleum products, which are vital to many industries and to the maintenance of the industrial civilization, making it a critical concern for many nations.
For the past 20 years, increasing climate concerns, linked to global warming due to increasingly evident and intensive human activities, as well as extreme atmospheric events and the increase in temperature, have certainly highlighted the urgent need for companies operating in the energy industry to rethink their strategies. In this context of changing global energy balances, the redefinition of strategic approaches and business models has become a key issue to mitigate risks and seize new opportunities [54,55,56]. Recently, several companies operating in the oil and gas industry have been directing their activities toward sustainability, trying to support the efforts of different countries toward mitigating the effects of climate change [11,12]. Accordingly, future energy scenarios have been developed to outline their business strategies, in line with the national decarbonization objectives and with an ever-increasing commitment to the energy transition. Oil and gas companies, by operating in a highly environmentally, economically, and socially sensitive industry, need to make a reasonable effort to act responsively regarding regulators and other stakeholders [57]. Due to the high impacts and harsh operational environment, the assessment of the effects on sustainability caused by members of the supply chain associated with the oil and gas industry, as well as the adoption of a sustainable business model, have become essential elements for a proper social well-being [58].
Figure 1 illustrates the interconnecting social, economic, and environmental dimensions of sustainable development associated with the oil and gas industry. Specifically, the value chain of oil and gas companies can deeply impact either positively or negatively on the economic growth, social progress, and environmental stewardship. In this sense, the adoption of an innovative and sustainable business model could encourage the energy transition, paving the way for the transformation of the global energy sector from fossil-based to zero-carbon by the second half of this century. As oil and gas will remain a core part of the global energy mix in the foreseeable future, companies will need to develop proactive and transparent sustainability approaches that will allow them to maintain their license to operate in their traditional business, whilst identifying and securing new opportunities arising from the transition to a low-carbon economy. By doing this it may be possible to preserve ecosystem services relating to humanity in general, food, clean water, and flood protection, which would otherwise be under severe threat from the energy industry [59]. In addition, a sustainability-based innovative business model can act as a driver of entrepreneurship, by improving the local economy, creating new jobs and business opportunities [60]. Therefore, since a sustainable approach has become a fundamental issue in a global market strongly characterized by innovation, ecological concerns, energy transition, and internationalization, oil and gas companies are progressively repositioning themselves through actions related to renewable energy [61] and to the reconversion of offshore platforms based on sustainability and safety principles [22].

2.3. Sustainable Decommissioning (SD) of Oil and Gas Offshore Platforms

Over the next decades, the decommissioning of oil and gas platforms will be one of the main industrial, social, economic, and environmental challenges worldwide, due to the hundreds of platforms, millions of tonnes of infrastructure, and thousands of wells that will need plug and abandonment (P&A), removal, and recycling [13,14,15,16]. The decommissioning of oil and gas offshore platforms refers to the series of processes involved in the deactivation of a facility at the end of its life, as well as its deconstruction and dismantling and the removal of components for reuse, remanufacturing, recycling, storage, and/or disposal [16]. In terms of international guidelines, the United Nations Convention on the Law of the Sea (UNCLOS III) 1982 [63], together with the International Maritime Organization’s (IMO) Guidelines and Standards for the Removal of Offshore Installations and Structures on the Continental Shelf and in the Exclusive Economic Zone (EEZ), which were adopted in 1989 [64], set the most widely used decommissioning requirements across the globe. IMO guidelines stated that abandoned or disused offshore installations or structures on any continental shelf or in any EEZ must be removed, except in several cases based primarily on the depth of the water and the size of the structure [65]. This legislation has played a significant role in setting standards and has provided a framework for decommissioning that has influenced the approaches in many nations. However, a case-by-case approach based on the multicriteria decision analysis applied to oil and gas platforms can be useful for assessing the decommissioning options of offshore assets and frame the several impacts from an environmental, health, safety, social, and economic point of view [66]. In Europe, there are four cooperation structures which contain specific decommissioning requirements: (i) The Convention for the Protection of the Marine Environment in the North-East Atlantic of 1992 (following earlier versions of 1972 and 1974)—the OSPAR Convention (OSPAR) [67]; (ii) The Convention on the Protection of the Marine Environment in the Baltic Sea Area of 1992 (following the earlier version of 1974)—the Helsinki Convention (HELCOM) [68]; (iii) The Convention for the Protection of Marine Environment and the Coastal Region of the Mediterranean of 1995 (following the earlier version of 1976)—the Barcelona Convention (UNEP-MAP) [69]; (iv) The Convention for the Protection of the Black Sea of 1992—the Bucharest Convention [70]. The European Community is a party to the first three Conventions. For the Black Sea region, one priority of the European Commission is that the Bucharest Convention be amended to allow the European Community to accede [71]. In all other cases, the Regional Seas’ conventions and protocols indicated only general commitments to the protection of the environment and marine ecosystem. However, the considerable costs of decommissioning as well as environmental considerations have led to a gradual change in international regulations toward a more flexible approach, if the technical estimations allow it. Indeed, experts and scholars agreed that the transport of the topsides and jackets of large steel structures to shore, as currently required by the regulations, is not always an ecologically justified solution, and a more flexible case-by-case approach to decommissioning could benefit the environment [18,19]. Based on these considerations, the possibility to leave the structures in place, along with the footings, cuttings, and pipelines, with subsequent monitoring, could also be justified [72]. More specifically, the partial removal options were considered to deliver better environmental outcomes than the complete removal of the platforms in terms of biodiversity enhancement, provision of reef habitat, and protection from bottom trawling, aspects that are instead negatively affected by the complete removal. This awareness has led some nations to leave obsolete structures to act as artificial reefs and/or to find alternative solutions for their sustainable reuse [20]. In this direction, several scenarios have been studied in the literature, involving the energy production from wind [21,22] and photovoltaic farms [23] in the decommissioned offshore platforms, aimed to produce renewable energy exploited to produce hydrogen [24], to permit the methanation process, or to produce fresh water from the desalination process. Moreover, sustainable initiatives for the reconversion of these assets could bring several social benefits, from an employment and entrepreneurship point of view. In fact, the marine context can provide an increasing number of maritime-related job opportunities related to goods and services on seafood, shipping, fishing, as well as tourism activities: the largest share of such jobs is related to seafaring tourism and the enormous range of activities on offer (e.g., health, cultural, creative) [73]. The reconversion of these platforms in favor of multi-purpose initiatives has significant potential also in terms of the reduction of operational costs for the offshore energy and aquaculture industry by means of concerted spatial planning and the sharing of infrastructure [74]. In such a direction, a revision of the offshore decommissioning regulatory framework appears necessary, including a temporary suspension of the obligatory removal and the adoption of a sustainable perspective [75,76]. In this sense, Sustainable Decommissioning (SD) can be defined as a process that tries to achieve the most efficient and sustainable solution by taking into consideration the technical aspects as well as the environmental impacts, by assessing a multi-conversion of these assets aimed at improving social well-being and local entrepreneurship initiatives [22,25,26]. Indeed, nations and regions have taken different approaches to decommissioning, with policies ranging from the complete removal of structures in the North Sea to rigs-to-reefs programs and alternative use options in the USA and Southeast Asia, and other regulators currently reviewing permissible alternatives to complete removal [77]. At the European level, recent regulations—in line with the Blue Economy perspective outlined by the OECD (2016) [78]—aim to develop new standards for the sustainable reuse of decommissioned oil and gas platforms by combining aquaculture, recreational activities, and renewable energy production systems. However, although the relevant literature highlighted the potentialities related to a multi-reuse of these structures, the effect of the sustainable decommissioning of offshore platforms on macro-environmental factors and, particularly, on social well-being and local entrepreneurship, is still a collective and open question, especially in the Italian context, which has not yet been investigated in those terms.

3. Methods and Data

To investigate the influence of the Sustainable Decommissioning (SD) of offshore platforms on macro-environmental parameters, this study aims to carry out a PESTLE analysis. This kind of analysis originates from marketing analysis, but it is also used for assessing the external influences and factors which impact long-term sustainability in different industries. For this reason, it is broadly applied in sustainability studies, especially because it can shed light on different facets correlated to economic, environmental, socioecological, and geopolitical sustainability [28,79,80,81]. Unlike the SWOT analysis, which identifies issues in the generalized categories of strengths, weaknesses, opportunities, and threats, the PESTLE analysis classifies issues as political (P) economic (E), social (S), technological (T), legal (L), and environmental (E) [82]. The PESTEL analysis is a comprehensive environmental screening approach to identify and assess the critical macro-environmental factors that can affect the working conditions in an industry and the performance of the firms operating in that industry [83].
In the context of this paper, a PESTLE analysis can help to deeply investigate the key factors influencing the intricate and multifaceted process regarding the sustainable reconversion of offshore infrastructures and its impact on collective well-being and local entrepreneurship initiatives. In this case, the PESTLE criteria are focused on issues which policy-makers and decision-makers as well as companies should address to support the sustainable decommissioning decisions by evaluating numerous variables, including environmental, financial, socioeconomic, and health and safety considerations.
The Italian context of offshore platforms has been selected for the PESTLE analysis. A case study approach can help in an in-depth investigation of the dynamics of a complex context from a particular standpoint [84,85,86]. This qualitative methodology can be particularly suitable for investigating, as in this case, phenomena which refer to multi-dimensional constructs that are not well operationalized (through quantitative variables) and defined semantically in all their shades of meaning in the extant research. The Italian context has been selected because it is characterized by many platforms which are nearing the end of their production cycle and will thus have to be dismantled. In fact, in Italy, several offshore oil and gas installations (mainly jacket steel platforms) were developed during the 60s and 80s of the previous centuries, and some of them reached or are approaching the end of their field life, as depicted in Table 1. Specifically, 34 platforms [87], positioned in very shallow waters, have already reached the end of their economic life and were decommissioned, whilst about 138 offshore oil and gas platforms are still in operation in the Italian coast within and outside the 12-mile zone, mainly in the Adriatic and in the Strait of Sicily. The future of offshore platforms represents for the Italian context still an open question. However, the perception of the Italian public regarding the decommissioning of offshore facilities in the oil and gas industry has changed over the years. Indeed, a growing attention to projecting, environmental impact assessment, and public awareness has been observed in the past decades in the territory [88]. In recent years, several round tables with the involvement of the Italian Ministry for Economic Development, oil and gas companies, and various associations discussed sustainable decommissioning, leading, in 2019, to a plan with guidelines issued by a ministerial decree in February 2019. By June 30 of each year, the Ministry of Economy Development publishes the list of facilities that must be removed and those that can be reused: in the latter case, interested enterprises have one year to apply for the reuse of these assets.
To investigate the PESTLE variables, a qualitative approach was performed (as described in Figure 2), drawing from a sample of six individual interviews and one focus groups of four participants, totaling 10 in all. The semi-structured interviews [81] have been conducted with key informants and stakeholders—including experts, practitioners, and scholars—belonging not only to the oil and gas industry, but also to the green energy section, tourism, NGOs, as well as the aquafarm industry in the Italian context to consider the whole actors who participate or can participate in the sustainable decommissioning process.
A crucial step in this research was the identification of the appropriate respondents from the oil and gas industry, as well as other sectors which could have a role in the sustainable decommissioning of offshore platforms, with deep knowledge of the environmental and sustainability practices. In a timespan of three months (from February 2021 to April 2021), three researchers examined 10 key informants belonging to the following main stakeholders’ groups: (1) company in oil and gas industry, (2) entrepreneurship in green energy, (3) entrepreneurship in tourism and recreational activities, (4) entrepreneurship in the aquaculture industry, (5) non-profit organization. The interviews and the focus group session were carried out online due to the pandemic limitations. The interviews lasted 60 min on average and were composed by open-ended questions. The interview protocols were sent in advance to the respondents, as it was deemed that this would help them better collect their thoughts. Additional data from the websites of the respondents and reports were used to form a concrete view of their sustainability practices and the conditions of the sectors analyzed [81,89,90]. Secondly, the researchers proposed the questions regarding the sustainable decommissioning of offshore platforms. However, although the researcher followed the guide established for the interviews, the experts were encouraged to interact. The interviews were transcribed by notes and recorded to guarantee a more consistent transcription [91]. The interview protocols were transcribed, and a two-pass process was adopted for data verification.
The steps of the methodological framework have been summarized in Figure 2, following Rastogi and Trivedi (2016) and Rashid et al., (2019) [92,93].

4. Results and Discussion: PESTLE Analysis about the Sustainable Decommissioning of Offshore Platforms

The results of the PESTLE analysis are summarized in Figure 3. According to the data analyzed, the PESTLE criteria are focused on potentialities and issues related to the political, economic, socio-cultural, technological, legal, and environmental considerations on the sustainable decommissioning of offshore platforms in the Italian context.

4.1. P–Politics

Political variables play a central role in the reconversion of offshore platforms. Indeed, as highlighted in the literature, a gradual change in international legislations is taking place regarding offshore platforms, and a more flexible approach is emerging based on the partial removal or readaptation of facilities according to the circumstances of each case. This has been caused especially by global influences related to sustainable approach and circular economy principles, that have pushed toward a more a sustainable reconversion of offshore platforms. As emphasized by a key informant related to the green energy business: “Baltic countries have already made great strides in making their energy systems cleaner. Growing evidence suggests that the Baltic countries have enormous potential for offshore wind energy, which could have a revolutionary effect for the entire region. Italy should follow their example”. Also in the context of the North Sea, several initiatives based on the readaptation of oil and gas platforms in photovoltaic and wind energy systems have already been carried out. These initiatives are well accepted by the local population because the plants are positioned on offshore platforms which are located far away from the coast [94]. However, another interviewee, related to a prestigious Italian non-profit organization, pointed out that “Governance should apply a bottom-up decision-making process by being awareness about the difficulties of local companies and by helping concretely the individual actions to create sustainable and economic value and improve the social wellbeing. In fact, a sustainable reconversion of offshore platforms can bring value by contributing to the creation of new entrepreneurship initiatives as well as to a better social welfare thanks to the production of green energy, […]. A strategic role is covered by public-private partnership which should act as a driver of value co-creation.” This is in line with several European and International projects based on partnerships between local governments and private business which have actively contributed to the stimulation of new knowledge and a common understanding of the sustainable decommissioning of offshore platforms, such as the 4POWER project, where experts from ten regions of nine EU member states engaged in an intensive dialogue on the regional policy dimensions of offshore wind energy development, or the ENTROPI project—Enabling Technologies & Roadmaps for Offshore Platform Innovation, which aims to advanced Key Enabling Technologies (KETs) along the value chain to accelerate the deployment of multi-use offshore platforms, particularly for renewables and aquaculture.

4.2. E–Economics

Economic considerations bring to light a fundamental aspect of the sustainable decommissioning of offshore platforms, i.e., the possibility to promote the economic growth of the local entrepreneurship. In fact, in accordance with the key informants, the reconversion of these structures can be considered as an economic stimulus from different points of view, which include:
  • Marine weather centers;
  • Extraction plant of salts or minerals from seawater (e.g., the extraction of magnesium from seawater);
  • Construction of a regasification station (the liquid gas would arrive with ships, treated on the platform and sent ashore with the same sealine that transported the gas extracted in the previous life of the plant);
  • Wind turbines, solar panels, and tidal energy;
  • Popular point of interest for tourism initiatives and sports activities (e.g., scuba diving, water skiing, parasailing);
  • Creation of an artificial reef suitable for marine repopulation, which would also have a function of attraction;
  • Development of a sustainable aquaculture business.
During the focus group, an engineer expert in oil and gas offshore platforms pointed out that: “It will be necessary to analyze the geography of the platforms and their characteristics in order to understand how they can be adapted in terms of creation of new business initiatives”. However, this economic stimulus for business development could result in an improvement of the employment rates in the Italian territory, as highlighted by the literature [59]. “We need a cultural and economic revolution that makes Italy 100% green, contributes to create jobs and protect climate and environment”, reported a key informant related to an important environmental association. Sustainable decommissioning can provide an increasing number of green-energy-related jobs as well as maritime opportunities linked to goods and services on seafood, shipping, fishing, as well as tourism activities, thanks to the provision of innovative recreational and well-being outdoor services [73]. Moreover, as mentioned in interviews and the consolidated literature, the development of high-impact sustainable entrepreneurship initiatives, related to green energy, sustainable tourism, and aquaculture, can attract the final consumer, who may feel motivated to adopt sustainable products or services because of their positive ecological impact and collective symbolic attributes [45].

4.3. S–Social

Socio-cultural variables shed light on the possibility that the sustainable decommissioning of oil and gas offshore platforms could improve social well-being by acting as an incentive for the energy transition as well as a driver of income redistribution and career enhancement. Dr. Stefano Silvestroni—President of the Shipbuilding (Confindustria Emilia Romagna offshore artifacts section) and Chairman of the Board of Directors, Rosetti Marino Group—said in a local report from Ravenna entitled “A window on the future of energy” (2019) that a sustainable initiative related to offshore platforms can improve social sustainability, since they are a key source of employment and income in several sectors, such as construction, infrastructure, tourism, aquaculture, and so on. These entrepreneurial activities can lead to tens of thousands of jobs, characterized by higher standards of health, environmental protection, and safety in the workplace. The reconversion and the maintenance of these assets will require the collaboration between structural engineers, energy experts, and project managers who will reciprocally play a key role in the monitoring of the platforms’ efficiency and safety and will ensure that the entrepreneurship initiatives are carried out in line with environmental protection standards. According to the valuable example of the United Kingdom, a sustainable decommissioning could support the energy transition, increase high-value jobs, and safeguard the expertise necessary to achieve a lower-carbon future [95]. This scenario can contribute to an improvement of air pollution, CO2 emissions, as well as food security, with a high impact on social well-being in the long run [96].
Other considerations regard the environmental and safety risks inherent in leaving unused structures in the ocean, and in the emergence of potential conflicts with other users of the Federal OCS (i.e., commercial fishing/aquaculture, military activities, transportation industry, other oil and gas/renewable energy operations, etc.). In this sense, a respondent belonging to an environmental association reported that: “We must avoid accidents as in the case of the Paguro and Adriatic IV platforms where huge structures moved in the sea and several damages occurred”.
On the other hand, decommissioned offshore structures could become a local point of interest by offering a particular natural experience and a convenient platform for tourists and citizens interested in recreational activities. One of the interviewees, founder of a start-up concerning a platform for tourism-recreational activities, said that “Offshore platforms could become a very interesting point of interest in the Italian landscape! A lot of activities could be programmed in this place. For instance, some people might be interested in visiting such a naturalistic place. On the other hand, sports enthusiasts could use these platforms for several activities such as snorkeling, surfboard, and so on. Those facilities could become a privileged place to observe the sea and could host a spectacular aquarium at a lower level, […]. However, albeit right now due to the pandemic the tourism sector is experiencing a crisis, our internal analysis shed light on a massive increase of proximity tourism in the next months”.

4.4. T–Technological

First, technological considerations involve the possibility that offshore platforms could become a catalyst of R&D activities and booster innovation. In this sense, the mayor of the city of Ravenna said in the report: “More and more often, I happen to receive managers who are faced with the choice of investing in our area or abroad. Here I firmly believe that one of our duties as administrators is to know how to provide answers to ensure such investments are made in the area because often this means maintaining or creating jobs.” [97]. The development of new skills in the future workforce and the collaboration with academia play a role in research and development. In this sense, the operators, supply chain, and regulators should be well connected with academic institutions to encourage the emphasis on relevant areas of R&D. As also highlighted in an annual Re-use decommissioning report (2020): “Innovation and collaboration are key to facing the challenge of decommissioning and repurposing our infrastructure”.
Innovation can also help to preserve crucial infrastructure and accelerate the energy transition in line with the international pressures and the Climate Agreement, which will lead to a substantial growth of wind farms and green energy parks in the coming decades. The focus group with experts belonging to an oil and gas Italian company confirmed that several innovative and sustainable projects have already been carried out in the Italian territory related to products developed at the elastomer research center and the implementation of initiatives for the development of energy from renewable sources. For instance, the ISWEC project is the first plant of integrated electrical generation from wave motion in the world. Thus, decommissioned offshore platforms could become a strategic and fundamental asset for green energy enterprises by potentially becoming a pioneering sustainable energy park. By combining wind, solar, and tidal energy, these structures, which at the end of their lives turn into waste that is complicated to dispose of, could become an innovative district in Italy dedicated to green energy and environmental sustainability.
A crucial role is covered by the adoption of information-sharing platforms which can act as useful facilitators for the establishment of entrepreneur relationships and opportunities in terms of a sustainable approach, as broadly discussed in the literature [98,99,100]. As reported by the annual re-use decommissioning report (2020): “The Masterplan was ready by the end of September 2016, and on November 18th of that year we presented it to Sandor Gaastra (Director-General Climate and Energy Policy). We deliberately kept the momentum going because all those directly involved were aware of the enormous potential of the project. One of the recommendations in the report was the creation of a National Platform for Decommissioning. This Platform should facilitate knowledge sharing, collaboration and innovation, and together with the operators, would be responsible for achieving the targets related to the reduction of costs.” [101]. However, as also mentioned in the interviews and according to international reports on decommissioning, further efforts are still needed in this direction to promote information-sharing platforms between different nations and entities involved in sustainable decommissioning. As highlighted in the OGA decommissioning strategies, the lack of robust data and the absence of a true collaboration between the organizations can affect the proper predisposition of a shared and consolidated model of sustainable decommissioning.

4.5. L–Legal

Under the legal regimes of most countries and in the Italian context, the default requirement is the complete removal of offshore structures from the sea floor. However, a sustainable perspective on decommissioning has led to a gradual change in international regulations toward a more flexible approach based on a partial removal of the facilities. Apart from economic considerations, which have influenced the decision of oil and gas companies to postpone the removal process if economic and technical estimations allowed it, social and environmental considerations have also pushed toward a reinterpretation of the main legislations. In Italy, the regulatory body for the oil industry is the Ministry of Economic Development (MISE). Within the Ministry, the National Mining Office for Hydrocarbons and Georesources (DGS-UNMIG) is responsible for granting exploration rights and production concessions. On 15 February 2019, the MISE issued a list of guidelines regarding the decommissioning of offshore platforms. These guidelines describe the procedure that must be followed for the decommissioning of Italian offshore platforms, considering several options, and specifying all the deadlines and duties linked to each decommissioning phase [102]. This declaration presents some advanced considerations, specifically the possibility of re-using the platforms, as well as a rich request for documentation to guarantee the best environmental management of decommissioning. However, as reported by different informants belonging to different industries, there is still the need to align laws, regulations, and policies across sectors.
In addition to environmental reflections, health and safety considerations play a central role in the predisposition of a legal framework. A key informant related to an important environmental association says: “First, it is important to clean up the assets and make them safe and functioning in order to reuse the resources in long term”. For instance, due to the frequent accidents and deaths on offshore platforms, a regulation focused on Safety Case has been established in the UK. The Offshore Safety Directive Regulations 2015 (SCR 2015) came into force on 19 July 2015, applied to oil and gas operations in external waters, that is, the territorial sea adjacent to Great Britain and any designated area within the UK continental shelf. The primary aim of SCR 2015 is to reduce the risks of major accident hazards to the health and safety of the workforce employed in offshore installations or in connected activities. The Regulations also aim to increase the protection of the marine environment and coastal economies against pollution and ensure improved response mechanisms in the event of such an incident. This is a written document which stipulates how a company demonstrates an effective safety management system is in place on any offshore installation. In the Italian context, a digital transformation program was launched in which the smart operator platform is designed to analyze possible applications for new digital technology to increase the level of safety at sites.
In addition, a comprehensive legal framework should refer to the employment laws to enhance positive social impacts on the local economy. In this sense, a sustainable decommissioning of offshore platforms could contribute to the improvement of this aspect. This is in line with 2030 Agenda, which, according to the world’s leaders, “has a strong normative character and sets a truly human rights centered path for sustainable development. […] that underlines the correspondingly central role of international labor standards in its realization.” International labor standards are debated, constructed, and adopted by means of a multilateral process which involves governments, workers, and employers, thus reflecting a broad support for those standards from the social partners, who are key actors in the global economy [103].

4.6. E–Environmental

Finally, environmental considerations are the key foundation of the reflections about the sustainable reconversion of offshore platforms. Since the 1990s, most large and influential environmental NGOs (eNGOs) have traditionally had one prominent discourse in relation to the offshore decommissioning of oil and gas platforms, due to their ecological impact. Recently, some eNGOs seem to align with an eco-centric narrative which tends to prefer, where this alternative is possible, the option to reconvert offshore platforms, in a perspective of “Giving Back to Nature”. For example, in Nexstep’s 2018 decommissioning report, Floris van Hest, director of Stichting de Noordzee, said: “From an ecological point of view, the re-use of the oil and gas infrastructure for new purposes may offer benefits, because we prevent the environmental impact of new construction and the decommissioning of installations” [101].
In this regard, during their productive lives, the platforms can support numerous and diversified fish and invertebrate assemblages, also useful as aquaculture food, many of which are of great ecological importance and/or protected by different international and national legislations. These favorable conditions are reinforced by the enforcement of exclusion zones around oil platforms that prevent the exploitation of living biological resources. It is therefore unlikely that the removal of these structures represents the best practice from an environmental/ecological point of view, and this awareness has led some nations to leave obsolete structures to act as artificial reefs and/or to find alternative solutions for their sustainable reuse [20]. One of the examples in the Italian context is the reserve of Paguro, which is the wreck of a drilling platform, built by Agip in Porto Corsini in 1963 for the extraction of methane. It is located about 11 miles off the coast, in the seabed off Ravenna: an artificial structure that collapsed in 1965 following an explosion, with the crater still evident on the muddy seabed south of the wreck. The submerged structure assumed the role of artificial reef and has become a pole of attraction for marine flora and fauna. The above has led to a revisiting of the regulations in favor of a more flexible approach, as outlined above, depending on specific technical and environmental assessments.
In addition to the reef, a sustainable decommissioning of these structures can positively impact the environmental ecosystem in different ways. Photovoltaic, wind farms, and systems based on wave energy can contribute to the replacement of fossil fuels for a more environmentally benign and sustainable future. A key informant related to the energy sector reported that: “Renewable energy initiatives based on photovoltaic, wind, and tidal energy can offer several benefits from an environmental perspective which include: the generation of energy that produces no greenhouse gas emissions from fossil fuels and the reduction of some types of air pollution. Furthermore, it is possible to diversify the energy supply and reduce the dependence on imported fuels”. Furthermore, these platforms could be reused as a strategic asset for the monitoring of the sea and for flora and fauna observation considering blue growth initiatives. In this sense, an interviewee related to an important Italian association of aquaculture, stated that: “In a hypothesis of re-conversion and alternative use of offshore platforms, certainly one of the opportunities may come from the development of Integrated Multi-Trophic Aquaculture (IMTA) technology able to reduce pollution and increase productivity and profit by transforming waste streams into new products. The offshore platform can be reused as a support structure where aquaculture’s specialists can use specific aquatic species as food, combine fed aquaculture (e.g., fish) with inorganic extractive aquaculture (e.g., algae) and extractive aquaculture (e.g., shellfish), and create balanced systems for environmental remediation (bio-mitigation). This would allow an improvement in production, a diversification of the product offered, and a reduction in costs”.

5. Implications, Final Remarks, and Conclusions

The increasingly urgent issues related to sustainability have triggered the need to balance all the social, organizational, and environmental concerns and have prompted future organizational efforts to define and adopt sustainable business models aimed at the well-being of the population and the improvement of the environmental conditions. In this scenario, the sustainable decommissioning of offshore platforms refers to a multidimensional and interdisciplinary challenge which requires a deep understanding of technical, legal, economic, financial, social, and environmental variables. The decommissioning of these structures is an issue that has gained a great deal of international attention and will require in the next years an open dialogue and exchange between institutions, oil and gas companies, enterprises, and environmental NGOs. Sustainable decommissioning is a process related to many branches of academia and industry and represents a current topic for local and international policy-makers and regulators which will have to be addressed in the coming years.
The PESTLE analysis carried out, grounded in empirical data from in-depth interviews, has shed light on the two sides of the sustainable decommissioning. The results of the analysis underlined the great potential of a sustainable approach to the offshore platform decommissioning process. In this regard, offshore green farms, along with aquaculture and other local entrepreneurial activities, have emerged as suitable candidates for the co-location/multiple use of these assets and as a viable economic and social stimulus for the local system. Only the combination of different entrepreneurial initiatives can ensure the economic viability of these initiatives. In fact, a multipurpose platform has significant potential for economizing operational costs for the offshore energy and aquaculture industry by means of concerted spatial planning and the sharing of infrastructure [63]. These initiatives, especially those concerning energy in multiple forms—wind, wave, tides, currents, and temperature and pressure gradients—are generally considered by local entrepreneurs and actors of the oil and gas industry as a key target able to provide secure, sustainable, and affordable energy—and, in a wider sense, an improved social well-being. Sustainable energy strategies can make an important contribution to the economies of the countries where green energy (e.g., wind, solar, tidal, biomass) is abundantly produced [104]. Moreover, this perspective highlights the importance of considering a friendlier context (fiscal, legal, organizational, etc.) and a more substantial support from supply chain agents and consumers to foster circular economy principles [105].
On the other hand, despite the various opportunities derived from a sustainable decommissioning, certain major questions need to be considered, including the need to align laws, regulations, and policies across sectors and countries. In this sense, the fragmented nature of the legislative framework as well as the different approaches of nations and regions to decommissioning are complicated and have pushed toward the creation of a national or international platform for sharing initiatives, information, and best practices about sustainable decommissioning [98,99,100].
Furthermore, at the national level, an institutional effort seems crucial to apply a bottom-up decision-making process. Institutions should be aware of the difficulties of local companies in starting a new sustainable business and should concretely support the individual entrepreneurial actions to create new sustainable and economic value at the local level. In a context of growing concerns due to the spread of COVID-19 and characterized by an ongoing crisis, governmental plans need to ensure a sustainable recovery also based on social well-being citizen and the promotion entrepreneurship initiatives.
This contribution provides preliminary insights that pave the way for further investigation, for a deeper understanding on sustainable decommissioning. In fact, the field of investigation should be broadened, as it is limited to a restricted number of interviews. In this sense, the purely qualitative nature of the research does not allow us to generalize, although the insights that emerged from this study, the first on the subject, can provide a foundation and useful stimulus for future theoretical and empirical studies, both qualitative and quantitative. Future lines of research could concern, for example, a big data analysis on a social network to frame the collective perception on this issue, which deeply impacts the environment and society. Moreover, due to the relative scarcity of specific literature, it might be of interest to carry out a systematic review regarding the sustainable decommissioning of offshore platforms. Thanks to such an analysis, it would be possible to synthesize the diverse concepts within the literature on the possible management of the final stage/readaptation of these assets and identify in detail the different paths and fields of research related to this issue. Furthermore, in future research, it would be interesting to consider the possible synergies and trade-offs between the factors identified in the PESTEL analysis. Furthermore, it may be of technical interest to carry out a Life-Cycle Cost-Benefit (LCCB) analysis for evaluating and comparing the economic value of readapted platforms to the maintenance and decommissioning costs (e.g., environmental impacts, structural capacity, and damage due to deterioration).

Author Contributions

Conceptualization, N.C. and R.V.; Data curation, N.C. and F.L.; Investigation, N.C., V.B. and F.L.; Methodology, F.L. and N.C.; Validation, N.C., V.B., F.L. and R.V.; Writing—original draft, F.L. and V.B.; Writing—review & editing, N.C., V.B., F.L. and R.V. All authors have read and agreed to the published version of the manuscript.

Funding

This study was carried out in the framework of the project PLaCE (PON Ricerca e Innovazione 2014–2020, project code: ARS01_00891), co-funded by the European Union.

Conflicts of Interest

The authors declare no conflict of interest.

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Figure 1. The impact of sustainability on the oil and gas industry, adapted from IPIECA [61] and Boyle et al. [62].
Figure 1. The impact of sustainability on the oil and gas industry, adapted from IPIECA [61] and Boyle et al. [62].
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Figure 2. The research methodology process.
Figure 2. The research methodology process.
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Figure 3. Overview of the PESTLE analysis about the sustainable decommissioning of offshore platforms.
Figure 3. Overview of the PESTLE analysis about the sustainable decommissioning of offshore platforms.
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Table 1. Overview of offshore platforms in Italy from a report of the Ministry of Economic Development.
Table 1. Overview of offshore platforms in Italy from a report of the Ministry of Economic Development.
Number of Offshore PlatformsStatusCompetent Port AuthorityStructure’s Characteristic
3InactiveChioggiaMonotubular
35Inactive: 2
Active: 33
RavennaMonotubular; reticular structure with 3,4,6,12 legs
19Inactive: 3
Active: 16
RiminiMonotubular; bitubular, reticular structure with 3,4,6,8 legs
8ActivePesaroUnderwater well head; reticular structure with 4 or 8 legs
2InactiveBrindisiUnderwater well head
24ActiveAnconaUnderwater well head; reticular structure with 3,4,8 legs.
3Inactive:2
Active:1
Porto EmpedocleUnderwater well head
11ActiveSan BenedettoUnderwater well head; monotubular; reticular structure with 4 or 8 legs
12ActivePescaraUnderwater well head; monotubular; bitubular; reticular structure with 3,4,8 legs
6ActiveCrotoneUnderwater well head; monotubular; reticular structure with 4 or 8 legs
2ActiveTermoliReticular structure with 4 or 8 legs
6ActiveOrtonaMonotubular; reticular structure with 4 or 5 legs
6ActiveGelaUnderwater well head; reticular structure with 4,8,20 legs
1ActivePozzalloReticular structure with 8 legs
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Capobianco, N.; Basile, V.; Loia, F.; Vona, R. Toward a Sustainable Decommissioning of Offshore Platforms in the Oil and Gas Industry: A PESTLE Analysis. Sustainability 2021, 13, 6266. https://doi.org/10.3390/su13116266

AMA Style

Capobianco N, Basile V, Loia F, Vona R. Toward a Sustainable Decommissioning of Offshore Platforms in the Oil and Gas Industry: A PESTLE Analysis. Sustainability. 2021; 13(11):6266. https://doi.org/10.3390/su13116266

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Capobianco, Nunzia, Vincenzo Basile, Francesca Loia, and Roberto Vona. 2021. "Toward a Sustainable Decommissioning of Offshore Platforms in the Oil and Gas Industry: A PESTLE Analysis" Sustainability 13, no. 11: 6266. https://doi.org/10.3390/su13116266

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