How do you like your energy? Green and clean? Or fossil-fuelled and reliable – but polluting? That’s roughly how Britain’s debate over energy supplies has played out over the last decade or so. It’s simple, seductive, binary – and wrong.
Yes, we must transition to clean, green sustainable energy as rapidly and efficiently as possible. But we must also maintain the nation’s energy security so, for now, we need oil and gas as well. We need the old to build the new.
The UK’s energy supply has been reasonably resilient so far but anyone taking it for granted should consider recent and looming disruptions.
There was, for example, outrage in the aftermath of November’s Storm Arwen when several thousand households lost electricity supply for up to five weeks. Separately, gas prices are soaring as tensions mount between western Europe and Russia, a key gas supplier.
The government’s own research warns that the energy issue UK consumers are really worried about is the imminent steep rise in energy prices.
And people care about the climate agenda too – they know the transition to a net-zero carbon economy is of existential importance, but that such a transition will not happen overnight. Love them or hate them, hydrocarbons will remain a crucial part of our energy mix as we work to achieve a net-zero UK by 2050. Turning off the UK’s oil or gas taps too soon would risk chaos.
So, our energy system isn’t a simple binary proposition like a football match where you pick your team and demonise the opposition.
Instead, it’s more like a recipe where key ingredients are mixed in just the right proportions to create a tasty cake. You can no more remove hydrocarbons from the energy mix right now than you could remove the eggs from a Victoria sponge.
November’s United Nations COP26 Climate Conference in Glasgow underlined the importance of producing our own energy. Imports, especially of liquefied natural gas, have a far greater carbon footprint than gas produced around the UK.
Our industry’s own emissions – the greenhouse gases from just producing and processing oil and gas – are something we can also control. They account for about 3% of UK emissions but the offshore energy sector was the very first in the UK to declare its support for net zero ambitions. It has pledged to halve those emissions by 2030, reduce by 90% by 2040 and deliver net zero production by 2050.
Our ground-breaking North Sea Transition Deal is fundamental to this process. It is the first deal of its kind by a G7 country to recognise that the oil and gas industry is key to achieving carbon neutrality.
The oil and gas sector has proved this already by enabling the shift from coal to gas – which produces far less CO2. That shift is one of the key reasons why the UK’s total CO2 emissions have fallen from about 800m tonnes a year in 1990 to about 400 million tonnes now.
The next challenges include powering our oil and gas installations with renewable electricity, building systems to capture and store CO2, and investing in the production of hydrogen.
This has already begun. As much as £16 billion of investment is being unlocked to fund the transition to a low carbon North Sea – the aim is to reduce UK CO2 emissions by 60 million tonnes by 2030.
At the same time, we are building impressive renewable generation capacity - our wind sector should have 40 gigawatts (GW) of offshore generating capacity by 2030 and 75GW by 2050 – roughly equivalent to more than 50 traditional power stations. It will also provide massive amounts of clean and affordable energy to the National Grid. Maximising our wind capability means we can also use green electricity to split seawater into hydrogen – the fuel used by Nasa to send rockets into space, and which could one day power our heavy vehicle fleets such as lorries and buses.
The aim here is a complete restructuring of the UK’s energy supplies. As our renewable energy systems build up so they can replace gas and oil. According to the Committee for Climate Change, UK petroleum demand in 2050 should be 85% lower than today while gas demand will fall by 75%.
For four decades we’ve proudly represented the oil and gas producers which, since 1971, have powered the country, paid over £360 billion in production taxes, and created hundreds of thousands of jobs. Even now, the industry still employs 200,000 people.
Our member companies are already changing as the great energy transition in the North Sea gains irreversible momentum. For instance, Bernard Looney, CEO of BP, has already unveiled and committed to an ambitious new renewables and low carbon strategy to deliver a genuinely net zero company by 2050 or sooner.
As our members change, so we must too. So, from February, OGUK [Oil and Gas UK] will become Offshore Energies UK - the UK’s first integrated energy organisation. We’ll be representing everyone involved in the production of cleaner energy in UK waters: whether from oil, gas, wind, hydrogen, CO2 capture or others.
It is an unavoidable truth that the low carbon energy systems of the future will be built on the oil and gas-based industries of today. Making that change is a complex challenge that requires grown-up debate and a spirit of cooperation across parties, government, industry, and society.
Stigmatising the role of oil and gas may be understandable, but it is certainly unproductive, unhelpful, and unfair. Net zero and energy resilience are not rival teams chanting different slogans. They are very much on the same side with the same interests, and ambitions. What their supporters must all share is a determination to deliver an integrated carbon-neutral energy system that is not just clean and green but also secure and affordable.
This blog was originally posted on LinkedIn. Click here to view it.