Oil and gas industry to halve emissions in next decade to help secure Scotland's green future

Offshore oil and gas industry leaders have set out the sector’s plans to slash emissions as they eye a “transformational” deal to support the UK’s green future.

The report comes after industry giant BP outlined charges and write-offs. Picture: BP plc

A report published today by industry body Oil and Gas UK (OGUK) outlines how targets will be achieved through operational change, progressive reductions in flaring and venting, and major capital investment programmes aimed at using electricity rather than gas to power offshore facilities.

The targets, including a commitment to halve operational emissions in the next decade, are seen as a key part of a major deal that industry is now formally discussing with the UK government.

This could see the sector support wider efforts to go green, using its skills and infrastructure to develop carbon-cutting technologies such as industrial scale carbon capture and storage, and the use of hydrogen for heating and heavy transport.

OGUK chief executive Deirdre Michie said: “The coronavirus pandemic and low oil and gas prices have had a devastating impact on the UK’s offshore oil and gas industry.

“Given the limited impact that the severity of the lockdown has had on global emissions, it is clearer than ever that we need a fair, inclusive, and sustainable transition towards climate targets. We need a green recovery which supports jobs, supply chain companies and energy communities.

“We remain committed to addressing the challenge of climate change, as we outlined in our Roadmap 2035 published last year. Our industry will play its part by reducing its emissions and using its skills to develop the solutions that will be needed to make a significant contribution to the UK’s overall targets.”

She added: “A transformational sector deal could help unlock the full potential of this industry to support a green recovery and we’re delighted to confirm that we are now in formal discussions about it.”

Report author and OGUK emissions improvement manager Louise O’Hara Murray added: “These targets would remove over nine million tonnes of CO2 equivalent greenhouse gas emissions from our operations over the next decade; the same as taking nearly two million cars off the road for a year. Each year we will publicly show progress against our commitments on a sector-wide basis.”

The report comes after oil major BP was forced to reduce the price it thinks it can get for the oil left in its underground reserves and took charges and write-offs that could reach some £14 billion.

The group, which recently outlined plans to slash 10,000 jobs globally, said the Covid-19 pandemic could have an “enduring impact” on the global economy, and reduce the need for energy for a long time.

It means that prices, which plunged to their lowest in decades in April, are unlikely to bounce back to where they had been before the crisis.

The oil giant reduced the value of its remaining reserves from $75 per barrel to $55 up to 2050. That would still be a marked increase on current prices.

But the reduction, and other non-cash charges, could cost BP between $13bn and $17.5bn (£10.4bn to £14bn), new boss Bernard Looney revealed.

The firm added: “BP is also reviewing its intent to develop some of its exploration prospects.”

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