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Climate / UK Government and oil industry agree green transition deal

Sullom Voe oil terminal's power plant breached sulphur dioxide levels in late 2015. Photo courtesy of BPThe old and gas industry has until 2050 to meet net zero targets. Photo: BP

OIL and gas production in the North Sea will continue for decades to come while the UK government and the industry aim to achieve net zero emissions by 2050.

That is one of the main messages contained in the North Sea Transition Deal that will support the oil and gas sector towards a greener future while protecting jobs during a 30 year transition period.

Published on Wednesday, the deal has earmarked billions to help the industry decarbonise and create new high-skilled jobs in emerging technologies such as hydrogen production, carbon capture usage and storage, offshore wind and decommissioning.

The transition deal also pledges that any new oil exploration licences will only be granted if it is compatible with UK’s climate change objectives.

If the evidence suggests that a future licensing round would undermine the UK’s climate goals or delivery of net zero, it will not go ahead, the UK government said.

This very much chimes with comments made by Gunter Newcombe, the coordinator of Shetland’s own ambitious green energy project, who told Shetland News last month that it would be unlikely for any of the large West of Shetland exploration projects to get the go-ahead without a “net zero emission profile”.

Described as “transformational”, the Orion clean energy project aims to decarbonise offshore oil installations, produce large amounts of green hydrogen and ultimately supply Shetland and the nation with green energy.

Extracting oil and gas on the UK continental shelf is directly responsible for around 3.5 per cent of the UK’s greenhouse gas emissions.

As part of a package of measures, the sector has now committed to reduce emissions by 25 per cent by 2027 and by 50 per cent by 2030 – while supporting up to 40,000 jobs across the supply chain.

Other measures are: –

  • joint government and oil and gas sector investment of up to £16 billion by 2030 to reduce carbon emissions. This includes up to £3 billion to replace fossil fuel-based power supplies on oil and gas platforms with renewable energy, up to £3 billion on carbon capture usage and storage, and up to £10 billion for hydrogen production;
  • by 2030, the sector will voluntarily commit to ensuring that 50 per cent of its offshore decommissioning and new energy technology projects will be provided by local businesses, helping to anchor jobs to the UK;
  • aims for the UK to develop 5GW of low carbon hydrogen production capacity by 2030 will be supported by a range of measures, including a £240 million Net Zero Hydrogen Fund.

Energy minister Anne-Marie Trevelyan said: “We need to urgently end our reliance on fossil fuels and through our pioneering North Sea Transition Deal we will do so without putting our economy and communities at risk.

“While the future oil and gas sector will look very different to how it does today, the industry, businesses and supply chains it supports will have a new mission to help the UK decarbonise and develop the clean technologies of the future, as we lead the green industrial revolution.

Chief executive of industry body Oil & Gas UK Deirdre Michie added: “The deal will safeguard UK energy security, providing affordable energy to millions of households, secure tens of thousands of jobs in industrial heartlands across the country and support the UK economy.

“It is the first deal of its kind by any G7 country and a striking example of the UK showing global leadership on climate change ahead of COP26.”