UK oil and gas industry pledges to halve operational emissions by 2030

Industry trade association Oil & Gas UK (OGUK) has revealed plans for halving emissions from production and exploration by 2030, with the country’s basin becoming net-zero by the year 2050.

OGUK committed itself on Tuesday to halving operational emissions in the next decade. The oil and gas sector is one of the first in the UK to commit to industry-wide targets and provide details on how they will be achieved.

A report published by industry body OGUK, The Pathway to Net Zero: Production Emissions Targets, outlines how targets will be achieved through changes to operations, progressive reductions in flaring and venting, and major capital investment programmes aimed at using electricity rather than gas, to power offshore facilities.

According to the trade association, the targets are a key part of a transformational sector deal that the industry is now formally discussing with the UK Government.

With jobs at its core, the sector deal will consider how the UK’s oil and gas industry can support a green recovery.

This could see the sector support wider UK efforts to decarbonise, by developing critical carbon-cutting solutions such as industrial-scale carbon capture usage and storage like Norway’s Northern Lights Project, and the use of hydrogen for heating and heavy transport.

OGUK chief executive Deirdre Michie said: “The coronavirus pandemic and low oil and gas prices have had a devastating impact on the UK’s offshore oil and gas industry.

“Given the limited impact that the severity of the lockdown has had on global emissions, it is clearer than ever that we need a fair, inclusive, and sustainable transition towards climate targets. We need a green recovery which supports jobs, supply chain companies and energy communities”.

The UK oil and gas trade body remains focused on tackling climate change as outlined in its Roadmap 2035, published in 2019.

According to OGUK, the industry will play its part in reducing emissions through solutions needed to make a significant contribution to the UK’s overall targets.

“With a clear pathway to becoming a net-zero basin by 2050 and with support from governments and regulators, we can protect domestic energy supplies, jobs and communities whilst embracing the opportunities which will come from being at the forefront of delivering a low carbon economy”, Michie added.

UK Government Minister for Energy Kwasi Kwarteng said: “The offshore oil and gas sector’s commitment to halving operational emissions over the next decade is a welcome step for an industry that has a vital role to play in our energy transition in the years to come. The UK Government will continue to work tirelessly with all partners to deliver a dynamic Sector Deal”.

It is worth noting that Sector Deals have already been made for industries such as offshore wind and aerospace.

Just last week, the Scottish government set up a $78 million fund to help the energy sector recover from the economic impacts of COVID-19 and the oil and gas price crash with net-zero opportunity in mind.

The so-called “Energy Transition Fund” will support businesses in the oil, gas, and energy sectors over the next five years as Scotland attempts to “become a world leader in the transition to net-zero”.

Regarding OGUK’s plan, Paul Wheelhouse, Scottish Government Minister for Energy, Connectivity, and the Islands stated: “I welcome this report from the UK oil and gas industry and the ambitious targets committing it to halve operational emissions over the next decade.

“This is […] a significant step to support Scotland’s just transition to net-zero which helps us move at pace. This report is timely as it follows the Scottish Government’s announcement […] of £62 million to support our energy transition.”

Report author and OGUK emissions improvement manager Louise O’Hara Murray claims that these targets would remove over 9 million tonnes of CO2 equivalent greenhouse gas emissions from operations over the next decade.

“Many of the major capital investment projects which will help our sector to decarbonise, including the powering of assets with electricity instead of hydrocarbons, the development and deployment of carbon capture and storage (CCS) and hydrogen both on and offshore, will need to be developed at scale to help other industries accelerate their efforts to reduce emissions”, Murray said.

Britain’s oil major BP has already presented its plan to become a net-zero company by 2050 or sooner. To achieve that, it opted to leave three U.S.-based trade organizations and reduce its global workforce by 10,000 this year as part of its plans to make the organization smaller and fit for the energy transition.

Other large oil companies like Shell and Equinor also have their sights set on net-zero by 2050 with plans already in place.

Just to put things a bit more into perspective, a report from November 2019 by Carbon Tracker stated that the world’s oil and gas majors must cut combined production by more 35 per cent by 2040 to align with net-zero by 2050.

In a separate statement, the UK’s Oil and Gas Authority (OGA) welcomed the industry’s commitment to decreasing emissions and ultimately becoming net-zero.

OGA chief executive Andy Samuel said: “In January the OGA challenged the UK oil and gas industry to commit to clear, measurable, production emission reduction targets.

“The industry has responded and engaged positively and we welcome this significant and ambitious commitment. It is now crucial industry keeps pace on efforts to reduce its footprint and also puts a strong focus on achieving impactful emissions reductions in the near term.

“Therefore, we will incorporate these targets into our data benchmarking to track and monitor performance and progress”.