From Controversy A multi-attribute
to Consensus: decision analysis
for decommissioning
California’s offshore
oil platforms
Max Henrion, Phd
CEO, Lumina Decision Systems
Advancing the Policy Frontier:
Society for Benefit-Cost Analysis
Annual Conference
March 19-20, 2015
Bringing clarity to
difficult decisions
Copyright © 2015 Lumina Decision Systems, Inc.
Oil and gas platforms in the Federal and
State Waters of Southern California
Santa Barbara Co.
Platform
Harmony Platform A
Los Angeles Co.
Source: Earthguide.ucsd.edu
fuels/images/platforms.jpg
Copyright © 2015 Lumina Decision Systems, Inc.
Copyright © 2015 Lumina Decision Systems, Inc.
How big are offshore
oil platforms?
A segment of Platform
Harmony before installation
375,000 tons steel
for all 27 California
platforms
Cars
Large
crane
Truck
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How big are offshore
oil platforms?
Harmony,
the largest
platform in
California,
is 1198 ft
deep.
modified from http://synclaire.net/blog/2008/02/oilplatform-comparison
Copyright © 2015 Lumina Decision Systems, Inc.
Life under the
platforms
• Platform jackets provide
habitat for a substantial
marine ecosystem
• Common biota include a
thick encrustation of
mollusks, rockfish
breeding, seals, sea
lions, and other visiting
marine mammals.
• Rigs are popular for
recreational diving and
fishing
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Selected stakeholder organizations
Federal and
California gov.
Owner operators
of oil platforms
Commercial and
sport fishing
Environmental groups
Recreational
divers
Copyright © 2015 Lumina Decision Systems, Inc.
Project client:
Skyli McAfee, Executive Director
Multidisciplinary Consulting Team Advisory Committee
Brock
Bernstein, PhD
Max Henrion,
PhD
Surya Swamy
Lumina
Team lead,
Project manager
Decision analyst
Todd
Anderson
Doug
Anthony
San Diego State
University
Santa Barbara County
Lumina
Model developer
Ann Bull
Daniel Pondella,
PhD
Sarah Kruse,
PhD
John de Witt
Occidental
College
Ecotrust
Marine ecology,
fisheries
Economist
Federal Minerals
Management Service
Proserv Offshore
Bowdoin College
Policy analysis
Astrid Scholz,
PhD
Andy Bressler
Ecotrust
Economist
Peter Cantle
Bioresources
Tim Setnicka
Superintendent
Channel Islands
National Park
(ret.)
Researcher
Laurel Fink
Bridget McCann
Texaco (ret.)
Researcher
Offshore
engineering
Air quality and
emissions
Federal policy,
coastal
management
Marine ecology
Legal and
management
Robert Byrd
Alison
Dettmer
Dominic
Gregorio
Linda
Fernandez
Grigg
Gitschlag
Alan Hager
Sean Hecht
Sonke
Mastrup
Michael
McGinnis
Mark Meier
Mark Page
Alan Winer
California Coastal
Commission
Calif. State Water
Resources Control Board
University of California
Riverside
National Ocean and
Atmospheric Admin
California Dept. of Fish
and Wildlife
UCLA
California Dept. of Fish
and Wildlife
University of California
Santa Barbara
State Lands Commission
University of California
Santa Barbara
University of Southern
California
Fisheries
Coastal
management,
air emissions
Regulation,
compliance
Decomm.
engineering
Coastal management
Water quality
Environmental policy
Resource
management
Legal & regulatory
Environmental law
Resource
management
Decommissioning
history, sociology
Regulation,
compliance
Fisheries
Air emissions
Copyright © 2015 Lumina Decision Systems, Inc.
PLATFORM: Decommissioning Decision
Support Tool in
.
• The team worked with OST, the
advisory committee, and other
stakeholders to structure the model
and evaluate the decision tree
options against multiple attributes,
and to analyze sensitivities and
uncertainties.
• PLATFORM is an interactive tool
to empower stakeholders to
explore alternative scenarios
and preference models.
Copyright © 2015 Lumina Decision Systems, Inc.
Multi-attribute decision analysis
Copyright © 2015 Lumina Decision Systems, Inc.
Decommissioning Options: Pruning the decision tree
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Partial removal (“rigs to reefs”):
Cut off at 85 ft below mean sea level
85 ft
Step 1
Step 2
Step 3
Step 4
Copyright © 2015 Lumina Decision Systems, Inc.
Multi-attribute decision analysis
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Economic costs of decommissioning
Influence diagram of
direct costs. Ovals
identify uncertainties
Tornado diagram:
Range sensitivities
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Probability distributions over
decommissioning costs
Partial
removal
Complete
removal
Uncertainty about cost of complete and partial removal:
Distributions calibrated to estimation errors in 120 past
estimates from 40 decommissioning projects (Byrd, et al).
Copyright © 2015 Lumina Decision Systems, Inc.
Multi-attribute decision analysis
Copyright © 2015 Lumina Decision Systems, Inc.
Attribute: Air quality
Local emissions for Platform Harmony
• for HLV, transport, and disposal
• Complete removal:
600 tonnes NOx, 21 t PM10, 29,400 tons CO2
• Partial removal: 89 t NOx, 3 t PM10, 4,400 t CO2
HLV: Heavy Lift Vessel
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Multi-attribute decision analysis
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Defining and scoring
an attribute:
Impacts on Marine
Mammals
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Multi-attribute decision analysis
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Attribute: Strict compliance
with platform leases requiring complete removal
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Multi-attribute decision analysis
Copyright © 2015 Lumina Decision Systems, Inc.
Assessing Swing Weights by Attribute
SMARTS: Simple
Multi-Attribute
Rating Tool with
Swing weights
(Edwards & Barron,1994)
• Rate by swing –
i.e. importance of
change from worst
to best outcome
• Select attribute
with largest swing
weight (100)
• Order from largest
to smallest
• Select weight for
each attribute
Copyright © 2015 Lumina Decision Systems, Inc.
Tornado chart: sensitivity to swing
weights and uncertainties
Each bar shows the effect on a variable of
changing swing weight from 0 to 100
 Prefer complete removal
Compliance weight is the only
variable that could change preference
from partial to complete removal
Higher level favors complete
removal only for Compliance
and Ocean access weight
Prefer partial removal 
Sensitivity to Cost uncertainty (change
from 10th to 90th percentile) is smaller
than 7 preferences (swing weights)
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Exploring scenarios:
Selecting an option for each Platform
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Changing swing weight
on compliance
How weight on Strict
Compliance changes
the preferred decision
Platforms ordered by depth:
Cost and environmental impact of
complete removal increases with
depth, so partial removal is
preferred.
Number of platforms for which
complete removal is preferred
increases with the weight on
strict compliance.
Copyright © 2015 Lumina Decision Systems, Inc.
The essence of decision in one page
Full removal
Partial removal: Rigs to Reefs
Strict compliance with leases
Requires waiver of leases
Restore ecosystem integrity
Retain most biological production
Clear ocean access
Retain recreational fishing
Significant environmental impacts
on air, water, and ecosystems
Much reduced environmental
impacts on air, water, ecosystems
Expected cost $1.09 billion
Expected saving over $500 million
Operators save
over $500 million
Split savings between
operators and 55%+ to
Ocean Conservation Fund
Copyright © 2015 Lumina Decision Systems, Inc.
Driving the Public Policy Decision Process
“By clearly identifying the issues, synthesizing
the best multi-disciplinary science, daylighting
the uncertainty, and providing for unbiased
review, the tool .. was successful in
distilling the rhetoric to meaningful
discussion of trade offs and values.
Further, the tool was made available to the
public, its assumptions and approach
were transparent. Constituents had the
opportunity to import various scenarios and
learn the best approach.
With this tool, sound legislation was passed that
will serve California and our marine resources well.”
Skyli McAfee, Executive Director
Emphasis added
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Outcomes
• Developed legal options to waive
“strict compliance”, change
ownership of reefs to State, and
mitigate liability
• Proposed split savings between
operators and 55%+ to Ocean
Conservation Fund
• Clarifying the size of environmental
impacts of complete removal helped
shift opinion towards partial removal
(“rigs to reefs”), now supported by
(almost) all stakeholders:
• “Rigs-to-Reefs” bill AB 2503
passed almost unanimously by
California State house
• Signed by Gov. Schwarzenegger
on Sep 30, 2010
Platform operators, fishermen, marine
biologists, most environmental groups, and
California legislators
• Decommissioning of first
platforms likely in 2015 to 17
Copyright © 2015 Lumina Decision Systems, Inc.
From Controversy to Consensus:
A Multi-attribute Decision Analysis
for Decommissioning California’s
Offshore Oil Platforms
Max Henrion, Brock Bernstein, & Surya Swamy
Q&A
Copyright © 2015 Lumina Decision Systems, Inc.