North Sea gas supports both energy security and net-zero goals, says UK regulator

UK’s regulator North Sea Transition Authority (NSTA) has revealed the results of its new analysis, which shows that domestically produced gas on the United Kingdom Continental Shelf (UKCS) is significantly cleaner than the imported liquified natural gas (LNG), thus, it supports not only Britain’s energy security but also the drive to net-zero greenhouse gas emissions.

According to the North Sea Transition Authority’s research, North Sea gas is on average almost four times cleaner than imported gas in LNG form due to the way the gas is transferred and, in some cases, the methods of extraction. In line with this, the UK’s gas has a carbon intensity – the amount of carbon dioxide (CO₂) emissions created per barrel of oil equivalent (boe) produced – of only 21 kg CO2/boe.

Furthermore, Norway has the lowest carbon intensity of all LNG imports at 33 kg CO₂/boe while Peru has the highest at 90, with the average coming to 79. The NSTA explains that the primary causes for the stark difference in emissions are the process of liquefaction – turning the gas into liquid for transport – then transportation via shipping, and finally regasification, turning the liquid back into gas so it can be used.

The UK regulator’s report shows that around 63 per cent of UK gas supply is imported into the country, 187 mmboe via pipeline and 156 mmboe from LNG. The UK produced 38 per cent of its gas supply in 2022, a total of 206 mmboe. Based on this analysis, 38 per cent was responsible for only 24 per cent of total emissions associated with gas supply, whereas LNG from the United States was responsible for 35 per cent of the emissions, despite being only 14 per cent of the supply.

Moreover, oil and gas currently contribute around three-quarters of domestic energy needs and official forecasts show that, even as demand is reduced, they will continue to play “an important role” during the transition to net-zero, says the NSTA while highlighting that helping to deliver UK energy security and the drive to reach net-zero go hand-in-hand.

As the analysis shows that domestically-produced gas creates significantly fewer emissions than average imports, the regulator underlines that this research points out that continuing to produce gas in the UK as cleanly as possible will assist in the drive to cut emissions.

To boost Britain’s energy security, the NSTA is currently assessing the 115 bids received for licences in the 33^rd oil and gas licensing round, with a view to awarding licences later in the year. This licensing process opened on 7 October 2022. It offered acreage across the North Sea – the West of Shetland, Northern North Sea, Central North Sea, Southern North Sea, and East Irish Sea – including four priority areas with known hydrocarbons.

The UK regulator highlighted in January 2023 that there was “very keen interest” in these areas that could see production in as little as 18 months, attracting 115 bids across 258 blocks and part-blocks from 76 companies. TheNSTA is convinced that these new licences will help to “ensure energy security and support the drive to cut emissions by reducing reliance on dirtier more carbon-intensive gas imports.”

This licencing round attracted a lot of criticism and opposition from environmentalists, which culminated in Greenpeace lawyers resorting to court action to challenge the UK government’s decision to greenlight a new oil and gas licensing round due to climate concerns. The group claims that the government ignored over 80 per cent of the carbon emissions these licences will produce when the oil and gas are actually burnt.

Greenpeace is urging the government to commit to no new oil and gas, as it believes this will be a disaster for the climate. While the regulator thinks more domestic gas will be beneficial for the UK, it is also adamant that it is vital that emissions are tackled at home as well. With this in mind, the NSTA has already offered 12 companies awards for 20 carbon storage licenses in the UK’s first-ever CO2 storage licensing round –  launched in June 2022, with applications closing in September – for sites which could store up to 10 per cent of total annual UK emissions.

The licences cover 12,000 square kilometres at offshore sites near Aberdeen, Teesside, Liverpool, and Lincolnshire, with some of the sites expected to be in operation in as little as six years, reducing the UK’s total greenhouse gas emissions by up to 10 per cent. It is estimated up to 100 CO2 stores could be needed for the UK to meet net-zero by 2050.  

While the carbon capture and storage opportunity could be worth £100 billion to the UK’s energy supply chain by 2050, the NSTA’s offer follows the UK government’s announcement of allocating up to £20 billion in support of developing carbon capture, usage, and storage, starting with projects in the East Coast, Merseyside, and North Wales.

In addition, the NSTA has worked with industry to help it cut emissions from flaring and venting by 50 per cent in the past five years. It also published guidance making it clear that routine venting and flaring will be banned for all by 2030. The regulator is working with the government and industry to support platform electrification, setting out to the industry its expectation that investments need to happen now.

Hedvig Ljungerud, NSTA Director of Strategy, commented: “This analysis highlights the benefits of continuing to produce our own gas, as cleanly as possible, for as long as we consume it, to support domestic energy security and the drive to net-zero. The NSTA will continue to work with industry to drive reductions in emissions while also supporting the energy transition.”

Moreover, the NSTA’s commitment to the energy transition is demonstrated by its interventions preventing the lifetime emission of 3.9 million tonnes of CO₂ – equivalent to taking 1.9 million cars off the road for a year.