NSTA’s plan to reduce UKCS greenhouse gas emissions puts electrification in the spotlight

UK regulator North Sea Transition Authority (NSTA) has launched a new emissions reduction plan highlighting that action is required for production decarbonization, including action on flaring and venting and the electrification of oil & gas installations, to ensure the future of the industry and achieve net zero targets.

According to the NSTA, the industry has done an impressive job in cutting production emissions in recent years, by nearly a quarter since 2018, and flaring alone has almost halved from 2018 to 2022. However, they still account for around 3% of total UK greenhouse gas emissions and, as power generation was responsible for 79% of production emissions in 2022, electrification or clean power generation can play a significant role in reducing that volume.

The OGA Plan to reduce UKCS greenhouse gas emissions, produced following public consultation and collecting feedback, covers four clear contributing factors to decarbonizing the industry and highlights that for production to continue in the North Sea, it must also continue to become cleaner.

The plan identifies electrification and low carbon power as key drivers of change and makes it clear that where the NSTA considers electrification reasonable, but it has not been done, there should be no expectation that field development plans would be approved and similar decisions that give access to future hydrocarbon resources on that asset.

Electrification alone could, under the best-case scenario, deliver emissions savings of 1-2 million tonnes in 2030, equal to taking one million cars off the road for a year, and a total of up to 22 million tonnes by 2050, the NSTA said.

The UK regulator noted that electrification is not the only option and other forms of low-carbon power will also be considered if operators can provide evidence of near-equivalent emissions reduction. In cases where it is not reasonable that an existing asset is electrified, other low-carbon power emissions reduction strategies must be undertaken.

“Energy production, reducing emissions and accelerating the energy transition are at the heart of everything we do. The Plan strikes the right balance in supporting industry in its work producing the oil and gas which we need and will continue to need in the coming decades, while at the same time playing its role in reducing greenhouse gas emissions,” said Stuart Payne, NSTA Chief Executive.

“The Plan will help to secure the crucial part the North Sea will play in meeting the UK’s energy needs and provide reassurance that the industry can and does place a very high value in cleaning up production and cutting emissions.”

Furthermore, the plan highlights three other emission reduction pathways, including investment and efficiency, focus on inventory as a whole, with increased scrutiny of assets with high emissions intensity, and action on flaring and venting. 

Concerning inventory, the NSTA stated that there would be increased scrutiny of assets with high emissions intensity and their cessation of production (CoP) dates, noting that it recognizes that to secure production while reducing emissions overall, it is crucial to look at trade-offs between installations. Closing some low-producing, high-polluting installations earlier could allow higher-producing and cleaner new assets to come online while still reducing overall UKCS-level emissions, the UK regulator said.

The plan also emphasizes that operators should take action and budget to reduce flaring and venting, with the latter focused on methane, and sets out a clear requirement that operators monitor and reduce fugitive emissions.

The NSTA sees that the requirements outlined in the plan build on existing commitments made by industry, including in the North Sea Transition Deal, with operators having agreed to deliver 50% reduction by 2030, and invest £2-3 billion on electrification. In addition, the industry has itself committed to a 90% reduction by 2040, and to reach net zero basin by 2050.