Andy Samuel: Crucial for UK oil industry to keep pace up on reducing carbon emissions

Andy Samuel

As we begin to emerge from the devastation of the pandemic, a green recovery gives us a golden opportunity to help shape the future of significant parts of our economy. A future that we know must lead to net zero greenhouse gas emissions by 2050. So what role does oil and gas have in that future?

There’s a misconception that we have a straight-out, binary choice between fossil fuels and renewables. However, government forecasts suggest gas will remain a vital part of the UK’s energy mix as we move towards net zero.

 In 2019, the UK Continental Shelf (UKCS) supplied 46 per cent of UK gas consumption. Imported liquefied natural gas (LNG) supplied around 21% and the remaining 33% was imported via pipelines. However, while estimates predict gas demand will decline only slightly from current levels to 2035, UK gas production will fall at a faster rate over that period; increasing our reliance on imports.

Energy security implications aside, our analysis shows that the production of natural gas from the UKCS creates less than half as much greenhouse gas emissions as imported LNG, providing good reason to effectively manage production for as long as demand continues.

However we know that when we compare the carbon footprint of our own gas production to imported gas by pipelines, particularly from Norway, we find imported pipeline gas has a slightly lower emissions intensity. There is good potential for the UKCS to further improve its operations and lower emissions further.

Society demands this now and it could be a last chance, given industry’s ‘social licence to operate’ is in real danger of disappearing. Given that between 2018 and 2050 the UK must reduce annual greenhouse gas emissions from 451 MtCO2e (metric tonnes of carbon dioxide equivalent) to less than 30 MtCO2e, the oil and gas industry must go further and faster to reduce its footprint.

That’s why we took the decision to refresh our core aim, including a requirement for industry to help the government achieve the net zero target. This will provide a basis on which to transform the operational landscape.

 In January we challenged the UK oil and gas industry to commit to clear, measurable, targets to reduce emissions from production. Industry has responded and I thank them for engaging positively. This long-term commitment to achieve near absolute zero by 2050 is significant and most welcome.

However it’s crucial industry keeps pace on these efforts and puts a strong focus on achieving impactful emissions reductions in the near term too. Therefore we will incorporate these targets into our data benchmarking to track and monitor performance and progress.

In addition, industry should be looking to progress platform electrifications and help solve the wider net zero challenges. These include: meaningful partnerships with renewables; driving forward carbon capture and storage (CCS); and helping to unlock hydrogen.

Energy integration has the potential to make a deep impact on the UK’s overall net zero target. We’ll soon be publishing the outcome of our energy integration study which outlines a range of opportunities which have the potential to make a very significant contribution towards the country’s net zero target, both through CCS and through CCS plus hydrogen.

This is too important an opportunity to let slip, which is why we are working closely with governments and industry to seize the moment.

 I recently chaired the Maximising Economic Recovery (MER) UK Forum, which brings together ministers from the UK and Scottish governments, senior oil and gas industry leaders and unions. We discussed some of the immediate challenges facing the industry and how we could continue to work together to protect jobs and accelerate some actions to create a stronger, more sustainable future.

The ‘tripartite’ approach of governments, industry and OGA working together proved successful during the last industry downturn; with the UKCS emerging out of it leaner, fitter and internationally competitive again. This tripartite collaboration is ever more vital, helping people get back to work and progressing a green recovery.

Andy Samuel is chief executive of the Oil and Gas Authority.

Source: The Herald

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