Aberdeenshire-base energy specialists, Pale Blue Dot, has warned the oil and gas sector not to lose focus on the low carbon transition while it struggles to manage the current oil price crash.
With companies concentrating on driving up efficiency and cutting costs, the Banchory management consultancy says companies risk an even larger threat to their future if they fail to prepare for the major changes to energy use and policy that will be needed if the UK is to meet its ambitious carbon reduction targets.
Sam Gomersall, Commercial Director, of Pale Blue Dot said: “It may seem like climate change is the least of the industry’s problems given current challenges, but the low carbon transition shouldn’t be ignored – it’s important the sector comes out the other side of this crisis ready to embrace a new approach to energy production rather than trying to get back to how things were.”
The transition poses significant risks and opportunities to the supply chain. While many companies have begun to diversify their services to attract the sustainable energy market, it has taken the current crisis to encourage others to review their options.
Mr Gomersall added: “There is considerable scope for the supply chain to benefit from the move to low carbon. While business have made steps to attract customers within sectors such as wind, carbon capture and storage, hydrogen and energy storage, we’ve found they often don’t have effective strategies in place for identifying and maximising these opportunities.”
It’s anticipated that operators too will have to make significant changes to their approach. While gas has been widely touted as the solution to the oil and gas sector’s carbon emissions challenge, a new report by The UK Energy Research Council (UK ERC) suggests it may not be the silver bullet that some thought.
Following the Government’s decision to withdraw funding for game-changing Carbon Capture and Storage projects last year, UK ERC believes that to achieve the UK’s target of reducing carbon emissions by 80 per cent by 2050 without CCS, gas use must be phased out almost entirely – transforming the way we consume and generate energy.
In the short term, operators are expected to face greater regulation particularly around how they report future carbon emissions from hydrocarbons still in the ground and how they describe for investors the risks created by climate change.
Mr Gomersall will be outlining the challenges of the low carbon transition during a presentation to The Scottish Oil Club on Thursday, May 19 at the Royal Scots Club, Edinburgh.