North Sea oil and gas industry needs to start contemplating its demise – Scotsman comment

23 days to Cop26: The failure of a legal challenge by environmental group Greenpeace to the UK government’s decision to allow BP to drill the Vorlich North Sea oil field will be cause for celebration in some quarters and dismay in others.

The days of North Sea oil and gas are numbered (Picture: Andy Buchanan/WPA pool/Getty Images)

But, whatever the rights or wrongs of the case, the imperative to cut carbon emissions means that, as things stand, the North Sea oil and gas industry’s days are numbered. The question is how many days, or rather years, it has left.

In May, the International Energy Authority’s executive director Fatih Birol warned that if governments were serious about climate change “there can be no new investments in oil, gas and coal, from now”.

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And last month, a paper in the scientific journal Nature concluded that, to have just a 50 per cent chance of keeping global warming to 1.5 degrees Celsius, “nearly 60 per cent of oil and fossil methane gas, and 90 per cent of coal [worldwide] must remain unextracted”. It added that oil and gas production must decline globally by three per cent each year until 2050.

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The UK government’s North Sea Transition Deal also says that state support “must now be within the context of delivering our net-zero target,” adding: “The concerns about climate change are mirrored by the market with investors and the public more widely placing pressure on the sector to respond to the challenge.”

According to some environmentalists, if the UK is to meet its carbon reduction targets, the North Sea oil and gas industry may only have about ten years left.

This estimate may not be correct, but the idea of trying to calculate how long is a sensible one, given the need to plan for an orderly transition for the people who work in the industry and for the economy as a whole.

Carbon-capture-and-storage (CCS) offers some hope that its lifespan could be extended, but giving the industry a deadline would sharpen minds and provide greater focus on ensuring such systems are viable and cost-effective when compared to renewables.

Until that is done and CCS is able to transform fossil fuels into a genuinely carbon-neutral source of energy, the North Sea oil industry must plan for its own demise.

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