We can continue with oil and gas and move closer to net zero all at the same time - Dan Jackson
The UK Government’s energy security strategy is a stark reminder of the complexities of the energy transition. The acceleration towards net zero must be balanced against the vital priorities of keeping the lights on, our hospitals powered and our homes warm.
In a time of unprecedented conflict and soaring energy bills for businesses and consumers, security of supply matters like never before.
The Government has long been committed to a “green industrial revolution”, and rightly so. Investment in renewables means harnessing the UK’s bountiful natural resources to produce cleaner energy and providing a massive economic boost in the process. Get this right, and the UK could be one of the leading energy providers to the whole of Europe.
But renewable technologies will require time, investment and scale to deliver energy at low cost. Many renewable technologies are already reaching this point, with the price of offshore wind having fallen dramatically by around 65% since 2015. Others will take longer.
However, the priority of the Government’s strategy is to deliver immediate and urgent relief on energy bills and reduce our reliance on imported energy. In the short term, that means looking again at domestic oil and gas.
Maximising economic recovery from domestic oil and gas production previously enjoyed almost universal support. Why? Because it was about safe-guarding thousands of jobs and generating billions in taxes, while ensuring security of supply.
In the current circumstances, it is right that the Government’s new strategy seeks to extract every drop of value left in domestic production. It is recognition that in the short to medium term, new North Sea oil and gas is vital for our energy security and easing pressure on household bills.
The real question is to what extent these priorities can be realised whilst simultaneously making progress on our journey to net zero.
Too much of the criticism of the Government’s strategy has positioned this as a binary choice. But new oil and gas or net zero doesn’t have to be a choice - we can have both.
The North Sea Transition Deal is the roadmap for the decarbonisation of our domestic oil and gas sector. It was agreed by both the UK and Scottish Governments, and the oil and gas industry itself. It commits us to ambitious targets to electrify, and therefore largely decarbonise, oil and gas production.
We have multiple routes to get there. The first carbon capture projects have been announced and are in the process of being funded, with more on the way - hopefully including a green light for the Scottish Cluster, which brings together communities, industries, and businesses to deliver carbon capture and storage, hydrogen and other low carbon technologies,
Then, we have offshore wind. It is one of the UK’s genuine global success stories. There is a target for 50GW of offshore wind production by 2030 -more than enough to power every home in the UK - and this year, the successful projects announced under ScotWind will bring 25GW of offshore wind onstream in the next decade. This is a renewable energy sector which, according to the Government, could provide up to 90,000 jobs within this decade.
By the end of this year, we are also hopeful that a further 5.7GW will be awarded under INTOG - the leasing round for offshore wind for use in targeted decarbonisation of oil and gas production. It represents over £20 billion of new investment in Scotland’s energy infrastructure - bolstering our offshore wind generation, turbo-charging green hydrogen production and immediately creating demand for new jobs to service the offshore sector.
Critically, this basin-wide mega approach gives us a clear and achievable route to half emissions from UKCS oil and gas production in its first year alone.
It is evidence that we can continue to pursue energy security through continued oil and gas exploration whilst bolstering our renewables capability and moving us closer to net zero all at the same time. In fact, the emphasis on securing our energy security is an opportunity to accelerate the technologies behind net zero.
This isn’t just theory. Several pioneering projects that aim to use floating wind to decarbonise oil and gas production have already been launched across Europe, including the 88MW Hywind Tampen near Norway.
How quickly we are able to make this happen in the UK Continental Shelf depends entirely on the appetite for bold action from Government and industry.