The UK’s oil and gas sector has untapped potential to lead the global charge against climate change and deliver a carbon neutral basin, writes Paul de Leeuw.
Following the publication of the Committee on Climate Change (CCC) report in May, the UK Parliament declared a “climate change emergency”. This was re-enforced by similar declarations from the Scottish and Welsh Governments and by many cities and towns across the UK. Although there is no single definition of what a climate change emergency actually means, it has become a catalyst for demanding immediate action and policy changes across the country to mitigate the causes of climate change. Governments responded by declaring targets to deliver “net zero” greenhouse gases by 2050 (2045 in Scotland).
So, how can the oil and gas sector react to this climate change emergency in a credible and impactful way? Unfortunately, there are no easy answers. According to UK government statistics, the consumption of hydrocarbons for transport, aviation, heating, power generation, industrial activities and other uses currently generates more than 70 per cent of all greenhouse gas emissions in the UK.
The CCC highlights that the offshore oil and gas sector represents around 3 per cent of all UK greenhouse gas emissions. This reflects emissions associated directly with offshore-related activities, such as oil and gas production, offshore power generation and transportation of hydrocarbons from offshore to onshore, but excludes those linked with oil and gas consumption.
The overall greenhouse gas emissions from the UK’s offshore operations are roughly half of those from the UK’s aviation sector and substantially less than the greenhouse gas emissions associated with the UK’s farming and agriculture sector (around 11 per cent). The CCC report also highlights that oil and gas will remain a critical part of the UK’s energy mix, still contributing about 37 per cent of the UK’s primary energy needs by 2050.
Delivering the net zero target for the UK will inevitably mean a radical overhaul of the way we all live and work. It will touch every part of our society. The industry has already made progress. The OGUK Environment Report 2019 highlights that, despite production increasing by around 20 per cent since 2014, the CO2 emissions per unit of production continue to decline.
Even though the UK currently only represents roughly 1 per cent of global CO2 emissions and 1 per cent of the world’s oil and gas production, its oil and gas industry can play a leading role in the response to the climate change emergency. Combined with offshore electrification, carbon capture utilisation and storage and a leveraging of the potential benefits associated with hydrogen generation, the industry has a real opportunity of delivering a net zero basin by 2050 or earlier.
The UK’s oil and gas sector expertise and capability can be readily applied to new projects, including industrial scale carbon capture utilisation and storage and hydrogen production. The CCC report identified the requirement to store potentially up to 175 million tonnes of CO2 annually by 2050 if we are to deliver the UK net zero agenda.
Scottish carbon capture
A number of carbon capture and storage pilot projects are currently being progressed in the UK, including the Acorn carbon capture project off the north-east coast of Scotland. Subject to funding and consents, the Acorn pilot project will come on stream in the early part of the next decade and over time has the potential to store up to 3 million metric tonnes of CO2 per year.
The industry would probably need the equivalent of around five Acorn-like projects to become a net zero basin. However it will also need the support of governments, policy makers, regulators and others, to make the technologies and business models for carbon capture utilisation and storage economically viable.
Although there are increasingly loud and influential voices arguing that the best way to deliver the “net zero agenda” is by shutting down the oil and gas industry with immediate effect, we must demand a more informed debate. It is becoming increasingly clear that there is a shared destination among the UK and devolved governments, policy makers, industry and many others in terms of delivering the net zero outcome.
At Offshore Europe last month, OGUK launched Roadmap 2035 together with its updated Economic Report. The roadmap sets out how the industry can contribute to the net zero agenda in the context of the requirement for energy security and energy sovereignty.
Roadmap 2035 provides a constructive framework to facilitate discussion and sharing of best practices to deliver this shared destination. However, it will require the careful balancing of societal expectations with the UK’s ability to adjust to the far-reaching changes required to meet the net zero targets. Societal acceptance of the rate of this change will be key to how fast the UK and its energy sector will have to move to deliver on net zero.
- Paul de Leeuw, director of Energy Transition Institute at Robert Gordon University