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Background on the Idle Iron Policy • In a knee‐jerk response to the Deepwater Horizon disaster, the U.S. Department of Interior issued what has come to be known as the “Idle Iron” policy, a directive stating that all non‐producing rigs must be plugged and any remaining structure removed. “Non‐producing” wells are defined as those that have not produced oil or natural gas for the previous five years. • Federal regulations already required such structures to be removed, but the regulation has never been enforced. The directive was directly a result of the Macondo well. • One of the primary concerns of the Idle Iron policy was the need to address the navigational hazard represented by these non‐producing structures. • There are approximately 3, 500 offshore structures in the Gulf of Mexico and the directive will impact roughly 650 of them. • The directive was issued on Oct. 15, 2010. Energy companies must act on non‐ producing rigs no later than five years from that date. • The rigs and structures of the Gulf of Mexico are generally regarded as the largest man‐made artificial reef in the world, providing habitat to dozens of species of fish and marine life, many of which are structure‐dependent. After years in the marine environment, the structures are supporting a significant biomass in the Gulf of Mexico. Removing them is certain to have a negative impact on the marine environment and its ability to support fisheries greatly valued by recreational anglers. • Accompanying the Department of Interior’s directive was reference to the Rigs to Reefs program. In creating the program, the Minerals Management Service worked with NGOs, coastal states, and the offshore industry to address concerns over removing non‐producing structures and the subsequent impact on the profound connection between fish, fishing, and oil and gas structures in the marine environment. • Under Title II of the National Fishing Enhancement Act of 1984 (P.L. 98‐623), the National Marine Fisheries Service developed and published a National Artificial Reef Plan (NOAA Technical Memorandum NMFS OF‐6, November, 1985, as amended). This law and associated planning requirements set the stage for Federal endorsement of offshore artificial reef projects. In support of the National Artificial Reef Plan, and in response to affected stakeholders, the MMS adopted a national Rigs‐to‐Reefs policy that supports and encourages the reuse of oil and gas structures for offshore artificial reef developments. • The Rigs to Reefs program allows coastal states with approved, state‐specific, artificial reef plans to identify offshore areas and sites suitable for artificial reef developments. Therefore, oil and gas operators may cooperate with Gulf Coast States to recycle obsolete structures as permitted artificial reefs as an alternative to onshore disposal. • As it currently stands, for a non‐producing structure to be turned into an artificial reef, the artificial reef coordinators from the states must assess the interest of their state in acquiring oil or gas structures offered for reef development, work with the structure operator or their agent in securing the required U.S. Army Corps of Engineers permit, negotiate an agreement for a structure donation, and accept title and responsibility for the structure as a permanent state reef. In order to be a state reef, it must be cut and towed to designated state artificial reefing areas. • The energy companies must weigh the costs and benefits of reefing a non‐ producing structure or towing it back to shore to sell as scrap. Current demand from developing countries like China has created a lucrative market for scrap steel. • Since the inception of Louisiana’s artificial reef program in 1986, 64 oil and gas related companies have participated in the program and donated primarily the jackets of oil and gas structures. In addition to the material, companies also donate one half their savings over a traditional onshore removal into Louisiana's Artificial Reef Trust Fund. • The Texas Artificial Reef Plan was adopted by the Parks and Wildlife Commission in 1990. To date, more than 100 offshore petroleum structures have been donated by cooperating oil and gas companies. Currently, the Artificial Reef Program receives 50 percent of an oil company's savings from converting the jacket to a reef instead of taking the structure to shore where it is salvaged.