Destination net zero: delivering a sustainable future

The UK offshore oil and gas industry can play its part in helping the UK meet its target of net zero emissions.

Following the publication of the Committee on Climate Change (CCC) report in May, the British government responded by declaring a target of achieving “net zero” greenhouse gas emissions by 2050 (the Scottish government set 2045 as the date).

So how can the oil and gas sector react to the climate change emergency in a credible and impactful way? Unfortunately, there are no easy answers. According to government statistics, the consumption of hydrocarbons for transport, aviation, heating, power generation, industrial activities and other uses currently generates over 70 per cent of all greenhouse gas emissions in the UK.

The CCC report highlights that the offshore oil and gas sector represents around 3 per cent of all the greenhouse gas emissions in the UK (excluding consumption by the end user).

Overall greenhouse gas emissions from UK offshore operations are roughly half of those from the aviation sector and substantially less than from agriculture (at around 11 per cent). The CCC report also highlights that oil and gas will remain a critical part of the UK’s energy mix, to the extent that by 2050 it will still contribute around 37 per cent of the UK’s primary energy needs.

Delivering net zero target will inevitably mean a radical overhaul of the way we all live and work. It will touch every part of our society and not just the oil and gas sector. For the oil and gas industry to keep its “social license to operate” and to have a sustainable future here and across the world, it will need to be a major part of the solution. It will need to become a net zero greenhouse gas offshore basin in the UK and to be a key contributor in ensuring the country meets its net zero targets over the coming decades. The industry has already made progress. The OGUK Environment Report 2019 highlights that, despite production increasing by around 20 per cent since 2014, CO2 emissions per unit of production continue to decline.

Even though the UK currently only represents 1 per cent of global CO2 emissions, around 1 per cent of the world’s oil and gas production and roughly 1 per cent of the world’s population, the UK and the UK’s oil and gas industry can play a leading role in the response to the climate change emergency. Combined with offshore electrification, carbon capture usage and storage (CCUS) 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. This will enable the UK to continue to be a leading and cleaner oil and gas basin, while balancing any residual greenhouse gas emissions through offset mechanisms.

The UK’s oil and gas sector also has the skills, assets and capabilities, along with a proven track record of developing, implementing and managing large and complex projects, to be a critical part of the solution. This expertise and capability can be readily applied to new projects, including industrial-scale carbon CCUS 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 net zero. The oil and gas industry, in collaboration with others, is well positioned to contribute to this outcome.

A number of CCUS pilot projects are currently being progressed in the UK, including the Acorn project off the northeast coast of Scotland. Acorn is designed to capture CO2 in the St Fergus area for subsequent transportation and injection into a depleted gas reservoir. Subject to funding and consents, it will come on stream in the early part of the next decade and over time has the potential to store up to three million metric tonnes of CO2 per year.

With the UK currently emitting close to 450 million metric tonnes of greenhouse gasses annually and the UK’s offshore oil and gas sector representing around 3 per cent of these emissions, the industry would probably need the equivalent of five Acorn projects to become a net zero basin. To deliver this, it will need the support of governments, policymakers, regulators and others, to make the technologies and business models for carbon CCUS 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 clear that there is a shared destination among the UK and devolved governments, policymakers, industry and many others in terms of delivering the net zero outcome.

At Offshore Europe in September, OGUK will launch Roadmap 2035 together with its updated Economic Report. The roadmap will set 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 will provide 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 net zero.