As North Sea oil exploration and production will continue for years to come, oil companies look at ways to reduce emissions following significant criticism from environmentalists. But will cutting emissions sway public opinion on Britain’s ongoing oil and gas activities? This month, the U.K. government announced $22.8 million for projects to reduce emissions in the North Sea oil and gas sector. Projects include the repurposing of existing pipelines for hydrogen exports. The investment will come from the Scottish government's Energy Transition Fund as part of the U.K.’s aim for net-zero carbon emissions by 2050.
In addition, as of July, all companies operating in the North Sea had to agree to the U.K.’s North Sea transition deal requiring them to act on reducing carbon emissions across oil and gas projects while continuing to maintain the country’s energy security.
Thanks to strict regulations overseen by the Gas Authority, the Offshore Petroleum Regulator for Environment and Decommissioning, and the Health and Safety Executive, the oil and gas industry in the North Sea is ahead of the curve in comparison to other U.K. industries when it comes to carbon-cutting, through the use of innovative technologies such as carbon capture and storage (CCS).
In addition, oil companies invested in the region have already begun to develop several renewable energy projects. Equinor Hywind has invested in the world’s first floating offshore windfarm, off the coast of Scotland, providing electricity for around 20,000 homes. Acorn has developed a CCS project in St Fergus, Peterhead, expected to come into operation in the mid-2020s, and aimed at capturing around 300,000 t/yr of carbon emissions from the existing gas plant to be stored.
But many continue to criticize the U.K. for its enthusiasm over continued operations in the North Sea, in an industry that shows no sign of slowing despite international pressure from the International Energy Agency(IEA).
In fact, in recent months the U.K. government has faced legal action for its plans to explore the 800-million-barrel Cambo oilfield near Shetland following government guarantees that it would end new oil exploration licences not aligned with national climate goals.
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The head of the Greenpeace U.K. oil campaign, Mel Evans, stated: “The government is signing off on new oil and is willfully ignoring the carbon emissions that come from burning the oil that’s extracted.” Further, “If the UK government approves Cambo we could torpedo the world’s chances of meeting climate targets, and Boris Johnson will be a figure of failure on the world stage at the upcoming Cop26 climate talks in Glasgow.”
Criticism also comes from the leader of the opposition, Kier Starmer, who says that drilling in the Cambo oilfield should not go ahead, and the decision for further exploration is at odds with the upcoming COP26 climate conference, to be held in Glasgow this October.
However, the government argues that the Cambo oilfield was licensed in 2001, prior to the new rules on exploration. If it goes ahead, project operations are expected to start in 2022 and run for around 25 years.
But as the U.K. and Scottish governments, as well as private oil companies, invest heavily in carbon emissions-cutting technologies and add renewable energy projects to their operations, will this be enough to convince the IEA and the British public that continued oil and gas exploration in the region is justified? The COP26 climate conference will likely provide the come away needed to understand the international and local expectations for the future of oil and gas in the North Sea.
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By Felicity Bradstock for Oilprice.com
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However, it is very logical for the UK to apply the most strict carbon capture technologies to reduce emissions. That is exactly what the UK is committed to do along with the global oil industry.
The most effective way of combatting climate change is to reduce emissions from fossil fuels and not their use.
There is no contradiction whatsoever in the UK’s position. Both China and Germany are using increasing volumes of coal to generate cheap electricity to meet domestic demand because renewables on their own can’t satisfy their needs. And yet, China is the world’s largest investor in renewables and Germany is a forerunner of energy transition.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London