Climate change: Why oil and gas companies are a vital part of the journey towards net zero – UK North Sea Transition Authority

With estimated spending of £97 billion on oil and gas and £92 billion on offshore wind up until 2030, the North Sea really is an energy ‘super-basin’

“Change is the law of life. And those who look only to the past or present are certain to miss the future.” The words of JFK are over 60 years old and were spoken before North Sea production even began. Time may have moved on, but the words remain relevant and are exactly the kind of sentiment we need if we are going to transition the North Sea into a ‘super-basin’ provider of energy and net zero solutions.

Since that quote was first heard, in Frankfurt 1963, the UK has benefited significantly from the North Sea’s energy production: warmth and light, an essential component in producing plastics, clothing, transportation, medical and electronic equipment, high-skilled jobs, and billions to the public purse as well as local economies, to name just a few.

But as we learned more about the climate impact of fossil fuel emissions, the need to unlock the next chapter of the North Sea became clear. The importance of the transition to renewables is undeniable, the challenges are significant, and the unanswered questions are many, but one truth is clear – the key asset for the UK’s energy story for this century is the same as it was for the last: our amazing North Sea.

North Sea oil and gas companies' expertise in offshore engineering can help build renewable energy schemes (Picture: Andy Buchanan/AFP via Getty Images)

The North Sea really is a super-basin. It has got everything you would ever want in energy terms and is indisputably the jewel in the crown of the UK’s energy system – and what a jewel, with estimated expenditure between 2022 and 2030 of around £200 billion. That’s £97bn on oil and gas, £92bn on offshore wind, £10bn on hydrogen and £10bn on carbon storage.

Integration and repurposing of existing resources, whether that is people, equipment or capital, is the key to achieving those goals. We need to produce energy from a range of sources, and we need to store vast amounts of carbon dioxide. By combining carbon storage, hydrogen, wind, wave and tidal, the North Sea basin can take the UK 60 per cent of the way towards the net zero by 2050 goal. But none of that is easy. We need the combined skills and resources of government, competing industries, regulators, researchers and academics to make the dream a reality.

Earlier this year we awarded 21 carbon-storage licences, which added to the six already in existence – but that’s still nowhere near enough. We need around 100 to reach the storage capacity we need, and we will be running further rounds in the near future. Oil and gas companies have more than 50 years’ experience of producing hydrocarbons in the harshest conditions, and they can share the expertise they have gained in doing that with colleagues in offshore wind. The UK is a world leader in complex subsea engineering and fabrication, supporting tens of thousands of jobs in the UK and generating billions in exports. It’s exactly these kinds of jobs that will be needed for a new generation of giant floating turbines.

And that is why I am attending COP28 in Dubai and why it is crucial that oil and gas companies are part of the conversation about how we secure the energy we need, at the same time as cutting emissions and helping the fight against climate change. After all, it is the same skills, the same technology, data, research and many of the same people that made the North Sea so successful in the past decade that will do so in the next.

They can, and do, also share decades of seismic surveys and subsea exploration that have been collected and are now stored on the National Data Repository which makes more than 800 terabytes of information available to anyone who wants it. And colleagues working in wind, carbon storage and other industries do want it. It is a vital resource for selecting the right location for a windfarm or carbon storage location.

The North Sea is huge, but it is also a finite resource and co-location is becoming an issue – put simply, competing industries want to operate in the same bit of seabed. The National Data Repository is a vital tool for identifying the best locations, but of even greater importance is active collaboration. We know that companies often enter into partnerships or joint ventures to operate North Sea projects.

Regulators do it too. We’re currently finalising the second batch of offers in the 33rd oil-and-gas licensing round, but before we made a single acre available for potential licensees, we had consulted with a range of other North Sea users about what plans they may have. Not all the licences we award will eventually produce oil and gas, but there are still more than five billion barrels of oil and gas left to be produced from the North Sea and that will make a significant contribution to our energy security for many years.

When reservoirs run dry, wells need to be decommissioned. For many years, that was simply a case of plugging the hole. But now we insist that before any well is decommissioned, the operator looks closely at whether the reservoir can be used to store carbon dioxide. Where it can, decommissioning is done differently so the potential remains for the location to be reused – a prime example of the transition in action.

Another example, and an illustration of why oil and gas companies must be part of the transition, is energy hubs. Off the coast of Bacton, East Anglia, there are several producing gas fields. We have recently awarded licences for companies which want to look at opening carbon storage sites in the same area; studies are looking at producing blue hydrogen offshore which would take the gas, split off the carbon dioxide, which would then be injected below the sea. The hydrogen would be piped onshore for use by homes and businesses in the South East.

I’m quite certain JFK would approve.

Stuart Payne is chief executive of the North Sea Transition Authority