The UK is reducing demand for fossil fuels, but we are net importers of them. Producing them domestically and destruction of demand are the Government's focus. While the offshore oil and gas sector is a major UK industrial success story, climate change represents an existential threat to the planet. Recognising this, the UK’s offshore oil and gas sector was amongst the first major industries to publicly back the Government’s net zero objectives. In 2019, the Oil and Gas Industry Association published its ‘Roadmap 2035: A Blueprint for Net Zero’, which highlighted the role the sector can play to help the UK achieve the energy transition that is vital to a fully decarbonised economy.
In recognition of the important role that oil and gas will play in to our energy security and energy transition, an imminent licensing round for new North Sea oil and gas projects is expected to lead to over 100 new licences being awarded. I am sure you can understand that we cannot simply pull the plug on all fossil fuels overnight without this having a huge consequences all over Europe. However, the Government is going to make better use of the oil and gas in the UK by giving the energy fields of the North Sea a new lease of life. You may also welcome that between 1990 and 2019 the UK decarbonised faster than any other country in the G7.
It is important to note that producing gas in the UK has a lower carbon footprint than importing it from abroad and I am reassured that supporting the production of domestic oil and gas in the nearer term will be coupled with the accelerated deployment of wind, new nuclear, solar and hydrogen energy.
The North Sea Transition Deal builds on the UK’s global strength in offshore oil and gas production and seeks to maximise the advantages for the UK’s oil and gas sector from the global shift to clean growth. Through the Deal, the UK’s oil and gas sector and the Government will work together to deliver the skills, innovation and new infrastructure required to decarbonise North Sea oil and gas production as well as other carbon intensive industries.
This will support up to 40,000 direct and indirect supply chain jobs in decarbonising the UK’s Continental Shelf (UKCS) production and the CCUS and hydrogen sectors. The deal is expected to cut pollution by up to 60 million tonnes by 2030, including 15 million tonnes from oil and gas production on the UKCS, the equivalent of annual emissions from 90 per cent of the UK’s homes. In the year since the deal was agreed, there has been a reduction in carbon emissions from offshore oil and gas production, which have fallen by 11 per cent since 2018 - equivalent to taking around a million cars off the road for the year.
BP is already developing plans for the UK’s largest ‘blue’ hydrogen production facility on Teesside, which could produce up to 1GW of hydrogen, or 20 per cent of the UK’s hydrogen target, by 2030 and would capture and send for storage up to two million tonnes of carbon dioxide per year.
The Government conducted a consultation on a new climate compatibility checkpoint for the oil and gas industry, specifically on its design. This comes after a commitment to introduce the checkpoint as part of the Deal. The checkpoint will be a new measure carried out before each future oil and gas licensing process to ensure any new licences are only awarded on the basis that they are aligned with the UK’s climate change commitments, including the UK’s target of reaching net zero by 2050.
Following the consultation, the Government published a report detailing how the climate compatibility checkpoint will be designed. The checkpoint is being designed with three guiding principles. First, it will be evidence-based: the checkpoint must use either reliable data, or credible projections. Second, it will be transparent: the checkpoint structure should be clear and objective, and the sources of all data and projections should be publicly available and transparent. And finally, it will be simple: the checkpoint should be able to be described in a short document, and therefore give confidence to all stakeholders that a clear and methodical process is being followed. To read the full design report, please see: https://assets.publishing.service.gov.uk/government/uploads/system/uplo…