London — The UK's offshore oil and gas industry stands ready to help support the UK government's target of net zero carbon emissions by 2050, and in terms of its own production emissions plans to be a net zero oil and gas basin in the same timeframe, Deirdre Michie, CEO of industry association Oil & Gas UK, said Thursday.
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Michie, speaking to an audience of politicians, policymakers and campaign groups in Edinburgh, said OGUK had convened an industry-wide group to coordinate efforts, identify gaps and drive action "in pursuit of what is a truly challenging task but also a transformational opportunity."
Pressure on the oil and gas industry to act is growing, with Tim Eggar, chairman of the UK industry regulator, warning earlier this month that the UK oil and gas industry's "social license to operate" was under serious threat.
Michie said the UK's offshore oil and gas industry was not shying away from the climate conversation as she put forward specific proposals for the transition to the lower carbon energy future.
She said it would require "constructive, collective and coordinated action" to decarbonize the largely fossil fuel-based society at a time when global energy demand is forecast to grow by up to 30% by 2050.
But, she said, stepping up to reduce carbon emissions to net zero by 2050 in the UK was an opportunity for the UK's oil and gas industry.
Outlining its steps to support net zero in the UK, Michie said the industry would reduce emissions from 14 million mt -– currently 3% of the UK's total greenhouse gas emissions –- to 0.5 million mt.
This, she said, would require "significant investment, new technology and close working with the renewables sector in Scotland and across the UK."
OGUK is developing detailed targets for emissions reduction, and Michie said the body would soon publish a detailed action plan.
Steps include reducing emissions on oil and gas installations by using low carbon electricity including directly from offshore wind farms to replace offshore power generation from gas and diesel.
Carbon capture, hydrogen
Michie said the industry would also support the development of carbon capture, utilization and storage (CCUS) "at scale."
She said industry was looking to work with government and regulators to progress the five CCUS projects across the UK, "which now need to move at pace into the next phase."
One is the GBP224 million ($293 million) Acorn project, which is expected to be operational by 2024 and with the potential to store 16.2 million mt/year of CO2, she said.
Michie said industry was also working with governments and regulators to clarify policies and regulations on CCUS and hydrogen, including improving the understanding of what is required to repurpose existing oil and gas assets for use in the low carbon world.
Much more will have to be done to explore the full opportunity of hydrogen -- which Michie described as a "potentially disruptive player in the clean energy mix."
She said blue hydrogen derived from gas would need to compete alongside green hydrogen made from renewables –- but both would be needed to meet UK energy demand.
"Combining with CCS, hydrogen from gas could cut emissions, alongside efforts to reduce the cost of producing hydrogen from clean energy," she said.
To provide clarity, Michie called for a "comprehensive UK energy strategy" from the UK government.