Research

Government advisor warns oil and gas industry to face realities of climate change

Hydrocarbon companies that want to maintain their position in the economy have to become wholly different businesses, the government’s climate change advisor has warned.

Flare at Preston New Road, 13 October 2019. Photo: Sue Underwood

Launching the world’s first detailed route map to a fully decarbonised nation, Lord Deben, chair of the Committee on Climate Change (CCC), said:

“We say to the oil and gas industry it would be a good idea for them to look very carefully at the realities of life.”

The CCC’s 1,000-page report, published today, shows how the UK can reach its legally-binding target of net zero carbon emissions by 2050.

The recommendations pose challenges for the hydrocarbon industry, with cuts to demand for oil and gas, and limits on emissions from sites and production.

Key proposals include:

  • Phase out of oil-fired central heating boilers by 2028 and gas-fired by 2033
  • Phase out sales of new fossil fuel cars, vans and motorbikes by 2032.
  • No new unabated gas power plants to be built after 2030
  • Unabated gas-fired electricity generation to end by 2035
  • Offshore wind to become the “backbone of the whole UK energy system”
  • “Major ramp up” of home insulation, heat pumps and heat networks
Lord Deben

Lord Deben said:

“you’re beginning to see [oil and gas] companies that recognise that if they are to maintain their position in the structure of the economy, they have to become wholly different businesses.

“And I would say the investor might well choose those companies that recognise where the world as a whole is moving, not just Britain, and perhaps decide that people who are still hanging on to old fashioned views are not places that you want to invest.”

The CCC report said overall UK greenhouse gas emissions must fall by almost 80% by 2035, compared with 1990 levels. 18 months ago, this level of reduction was the UK’s goal for 2050.

By 2035, fossil fuel supply emissions should be reduced by 75%, compared with 2018 levels, the report recommended.

The CCC said existing oil and gas platforms, both on and offshore, should reduce emissions, in line with the report’s recommended pathway to net zero:

  • From 2025, flaring and venting should be permitted only when necessary for safety reasons on both onshore and offshore fields
  • The government should develop carbon-intensity measurement standards for gas and oil, produced on and offshore, and take steps to improve the measurement and monitoring of fugitive emissions, venting and flaring
  • From 2021, any new plans for offshore oil and gas platforms must use low-carbon energy for their operations
  • By 2027 new offshore platforms should have no direct emissions from operational energy use

The CCC will comment in March 2021 on how the last two policies could apply onshore.

Emissions from products

Businesses are also recommended to consider and reduce all emissions, including those indirect emissions from the use of their products.

The issue of indirect emissions was at the heart of a legal challenge last month involving production from UKOG’s Horse Hill oil site in Surrey.

The CCC said oil and gas companies could use carbon capture and storage to offset emissions from the use of their fuels.

The report says producers could be required to put back in the ground a proportion of the carbon they extracted. This could rise over time until it covered 100% of emissions associated with fossil fuel extraction, supply and use.

The report also said the government should require disclosure of:

  • carbon intensity for selected industrial products and processes in the early-mid 2020s
  • whole-life carbon in buildings and infrastructure

Both these recommendations cover the indirect emissions from carbon intensive industries, the CCC said.

Hydrogen and net zero

Onshore gas companies, including IGas, UK Oil & Gas, Angus Energy and Cuadrilla, have said they could diversify by converting methane into low-carbon hydrogen. Some of the operators have suggested this would contribute to net zero. But the CCC report suggests there may be limits to the process.

The CCC said hydrogen could “greatly facilitate the transition to net zero”. But it said the replacement of methane by hydrogen was “unlikely to deliver large emissions reductions over the next decade”.

Blue hydrogen – the production of hydrogen from methane with carbon capture and storage – can reduce emissions by 60-85% but it is not carbon free. The residual emissions may restrict its part in achieving net zero, the CCC said. The process could also push the required amount of carbon capture and storage to levels that may not be feasible.

The report concluded:

“Given the need for strong emissions reductions in the next decade and the availability of more established ways to do so, development of the hydrogen option should not be at the expense of pursuing proven decarbonisation options, such as electrification, in the 2020s.”

“Where options are available to reduce emissions through zero-carbon routes, such as electrification, these are strategically preferable to use of hydrogen.

“Hydrogen’s role should therefore be focused in those areas where it is likely to be infeasible or prohibitively expensive to pursue electrification”.

The safety case for hydrogen in buildings had still to be made, the CCC said. The government’s hydrogen strategy, due in 2021, should establish the balance between carbon-free green hydrogen – made from water using renewable electricity – and blue hydrogen.

Planning for emissions

The report did not set out how the planning system might take account of direct and indirect emissions from oil and gas developments.

But the CCC said, where possible, all businesses and local authorities should monitor and report on their emissions. All parties should also consider the impact of the UK’s net zero objective on their decisions.

Local authorities were the “cornerstone of climate change partnerships” that would deliver net zero, the report said. They had potential influence over emissions through land use and transport planning policies.

But a recent review by the National Audit Office found that local authorities were currently absent from the government’s coordination strategy for net zero. The CCC also said local authorities’ climate ambitions were unlikely to be achieved through a lack of local capacity and skills, policy and funding barriers and gaps in power.

The government should consider introducing a duty for local authorities to act in accordance with net zero and to develop climate action plans, the report recommended.

Sixth carbon budget

The CCC’s report includes the sixth carbon budget covering the period 2033-37.

The budget – at 965 MtCO2e – is a 78% reduction from 1990 to 2035. It requires annual reductions in UK emissions of 21 MtCcO2e.

This would “achieve well over half of the required emissions reduction to 2050 in the next 15 years”, the CCC said.

“It can feasibly be achieved at low overall cost and would bring multiple benefits and opportunities for the UK.”

The sixth budget could be met by take-up of low carbon solutions, expansion of low-carbon energy supplies, reducing demand for carbon-intensive activities and removal of greenhouse gases through tree planning and landscape restoration.

The CCC said savings in fuel costs would offset the investment needed to achieve net zero in later years. The net additional cost each year to deliver the same services with lower emissions had now fallen to less than 1% of GDP to 2050.

This was because of the falling cost of offshore wind and a range of new low cost, low-carbon solutions throughout the economy.

Lord Deben said:

“The Sixth Carbon Budget is a clear message to the world that the UK is open for low-carbon business. It’s ambitious, realistic and affordable. This is the right carbon budget for the UK at the right time.”

He said it was a chance to “jump-start the UK’s economic recovery” after the Covid-19 pandemic.

If the CCC’s recommendations were accepted by the UK government next year, Lord Deben said the budget would position the UK as “a true global climate leader” ahead of the UN climate summit, COP26, in Glasgow in November 2021.

Reaction: “Too conservative”

Mike Childs, Head of Science at Friends of the Earth, said:

“This is too conservative given the havoc and misery extreme weather is already causing, particularly to the poorest people in the world who have contributed least to climate breakdown.

“Areas like energy efficiency and eco-heating are challenging but would come on in leaps and bounds with immediate and sustained investment. For example, heat pumps are a proven technology and we should be aiming to phase out the installation of new gas boilers well before 2030 and fitting approximately 10 million heat pumps by the same date. Rapid investment in training fitters and hiring new apprenticeships will get this done.

“It’s what government does right now that will determine if we meet our carbon pollution reduction goals. And what the government is doing is ploughing £27 billion into climate-wrecking roads as well as funding damaging fossil-fuel projects overseas.”

Dr Jenifer Baxter, chief engineer at the Institution of Mechanical Engineers, said:

“Reducing emissions by 80% by 2035 will require investment in technical skills as well as rapid reform to energy system standards and regulations. We will also need to develop innovative new financing mechanisms, and potentially change planning laws. This must all be driven in parallel while simultaneously ensuring the public are confident in this fast-moving transition to a net zero emissions future.”

DrillOrDrop will add to reaction throughout the day.

33 replies »

  1. Oh Martin, I knew you’d just have to come back. I haven’t ignored anything, because from personal experience I know air source heat pumps work fine whether you have neighbours in close proximity or not. I don’t have neighbours close to me but others in my neighbourhood, with heat pumps, do. I have no secondary heating and my house has been toasty every winter, even during the “Beast from the East” – obviously a well designed and installed system.

    I take exception to your claims I have little empathy for those in fuel poverty, you don’t know me and, as you often are, you are wrong! I repeat, there is no need for anyone in the U.K. to suffer fuel poverty or any kind of poverty. We are not a poor nation, we are an unequal nation. Why do we have fossil fuel companies making billions of profit and energy providers being sanctioned by the regulator? As per my point politics and the market are failing energy consumers. The government could regulate energy providers differently and has a choice whether to recover green energy subsidies from consumers. After all the government subsidies fossil fuel companies, despite it being an established and profitable industry. The good news is that many green energy projects are now proceeding without subsidy. Indeed, as the Independent states – that as green energy subsidy is declining, the taxpayer is paying billions to NS O&G to clean up after itself. So matters are more complex and it is not beyond the realms of possibility for the government to organise policies to take people out of fuel poverty.

    But the issue remains, we have to change more quickly than we are and at last that reality appears to have been accepted by government.

    You have, as you often do, digressed from the subject, but for the record I abhor any exploitation of people, whether in the DRC or elsewhere. And of course there are issues with some aspects of green energy that must be regulated and tackled. But the fossil fuel industry has a chequered history of exploitation and pollution, so I politely suggest you should be more balanced in your arguments.

    The issue is, we urgently need to address climate change by lowering emissions. And the cost has to be met because the consequences if we don’t will have far greater human and economic impacts.

    https://www.theguardian.com/environment/2019/jan/23/uk-has-biggest-fossil-fuel-subsidies-in-the-eu-finds-commission

    https://www.independent.co.uk/news/business/comment/north-sea-oil-decommissioning-subsidies-tax-national-audit-office-hmrc-green-energy-treasury-a8745916.html

    https://theferret.scot/north-sea-oil-250-billion-tax-break/

    https://www.theguardian.com/environment/2020/nov/24/uk-government-to-subsidise-onshore-renewable-energy-projects

    https://www.theguardian.com/environment/2020/nov/24/uk-government-to-subsidise-onshore-renewable-energy-projects

      • Kat

        You do not seem to understand or appreciate that the UK government are leading the world in this field & has put measures & targets into place to achieve this. Unless maybe you have a different agenda?

        If I have understood the Drill or drop report correctly they state that at this stage with the current budgeted measures the UK will be well over half way to its 2050 targets in 2035.

        What is not said is how even after 2035 when the largest part of petrol & diesel vehicles are removed from the roads that this will accelerate along with other new technology & other new policies that will be introduced.

        • From what I’ve read, and from the government’s own publication, it seems the U.K. aspires to be the world leader. But a quick search of the internet and many studies and articles do not place the U.K. as world leader or leading the world. So perhaps, I have understood.

          https://gulfgasandpower.uk/blog/top-renewable-energy-generating-countries-in-the-world

          https://www.gov.uk/government/news/new-plans-to-make-uk-world-leader-in-green-energy

          Click to access top10_verde.pdf

          • Kat

            The irony of your comments & outdated research articles are at best misleading.

            The first article that you post is dated January 2020 almost 12 months old & takes no account of the current & future changes as highlighted this year & by the budget discussed in this drill or drop report.

            When it comes to carbon capture all I here from people like you is objections so all I can presume is you will not get behind your government in reducing carbon’s in the earth’s atmosphere & fight them in there chosen budgeted way of achieving net zero by 2050.

            This goal is not today, tomorrow or next week but the government has set out targeted plans that achichieve well over 50% by 2035 with much greater reductions following on from the changes especially with the removal of more than 30,000,000 combustion engine vehicles from UK roads over the next 29 years.

            It is still believe that in achieving these goals that the UK will still need 65 million tones of oil per year in 2050 not to mention gas.

            One of the most laughable points in your articles of response is that it points out that Norway produces such a high proportion of renewable energy but then omits to mention that it produces such a volume of oil & gas to sell to the UK to fund it’s economy. This sale of fossil fuels to the UK is your stated preference over the UK’s own indiginous oil & gas production which helps neither the UK energy security or it’s employment levels or the economy.

            If you think things are so great in Norway for example & this country is so bad why do you not move & live there.

            Maybe it is because the cost of living is so high in Norway & you would not have a standard of living as good as you personally have here.

            It is easy to criticize but sometimes things are what they are for a reason & I believe that change will come in many forms with Britexit so I hope you are prepared for next year.

            Good luck!

            • MH:

              You should know by now that KatT follows the usual anti handbook of selectivity and one sided equations. Of course, the Internet is full of that, and easy to link to-but still selected and one sided equations. Then, supported by those who do just the same. Shame really, as her posts also indicate she is an intelligent individual, yet can ignore how Norway has accrued it’s Sovereign Wealth Fund which enables it to have such a good level of health care provision etc. Widely discussed-and certainly on DoD. And, yes, the cost of living is horrendous, as highlighted if you end up buying the drinks for rig workers who have just come on shore!

              No wonder her home is so warm-all those elephants in the room producing all that heat.

              The whole premise of the anti faction is that nothing is enough, and it is all too slow. Obviously, a means to keep themselves “employed”, sorry, “occupied”, but it is a very dangerous approach because many expected to do as told will just eventually get fed up with it and say, if that is the case, whatever I do as an individual will not meet what is desired, or advocated, so I will do nothing. Already a group forming there, headed by those who made bad investment into solar panels, and probably added to by those who invested in hybrids too soon.

              Meanwhile, that is the knife edge the Government has to follow, so obviously they will not satisfy the zealots but may be able to keep the wider public on side by setting targets, and timescales, that can be seen to be achievable and accept that there will still be activists with a “job” to do. Just like the anti-vaccers, might be able to satisfy a proportion, but the zealots will never be satisfied.(Although, I believe there is always the option of an NHS precept on tax codes, just as an alternative to the way cigarettes are priced. That would concentrate minds a bit!)

      • True, we must work with the rest of the world too. But every reduction in emissions is important so we must continue. And most nations are working to reduce emissions. Hopefully international pressure, the reality of climate change and as time goes on a reduction in demand for hydrocarbons, the oil producing nations will change. Interestingly the Saudi’s are investing $30 billion in renewables.

        https://internationalfinance.com/2025-saudi-arabia-invest-30-bn-renewable-energy/

        • Kat T

          The problem is not fossil fuels themselves which are compositions of what we’re natural organic living organisms, fish, plants & algi that have decomposed & built up layer on layer over millions of years & been subject to the natural heat at deeper depth nearer the earth’s core & are naturally occurring. The issue is the carbons that are deposited in the atmosphere when they are burnt not allowing heat from the earth to escape onto space.

          One of the more interesting things for me in my lifetime is over the last 35 years while the world’s oil production has been more intencive is how many less volcanoes have errupted.

          When you look at what the effects on the world & the environment was before where the amounts of molten lava & ash clouds had a major impact.

          It would certainly be interesting to know if this fanominon has been reduced as a result of hydrocarbons being removed from the ground.

          That is why carbon capture & carbon scrub technology is so important.

          As the carbons which have currently built up stopping the the release of heat are captured & hopefully recycled net zero can be surpassed even without throwing the baby out with the bathwater.

    • I did reply to your post, KatT, but it got lost and really can’t be bothered to repeat-except to say more repetition of one sided equations from yourself, supported by the same from the Guardian doesn’t make the equation correct. So, kettle and black when it comes to balance.

      When it comes to reality.£28 BILLION per year fuel duty, for starters, in UK, is one bit you missed off the equation to manufacture your subsidy claim. Perhaps better to stick to much smaller and less obvious manipulation. N. Sea oil wells were always known to require Government assistance regarding decommissioning, and the cost is justified from prior income. Just like coal mines-and many other sectors. I would quite like as much of the N.Sea infrastructure to be left as a marine habitat as possible, but I suspect that is too much to expect. The rigs off Mexico seem to be a pretty good nursery for all sorts of marine life, and N.Sea divers have told me similar regarding our rigs. But, maybe, we will shortly have so many fish, we won’t know what to do with them.

      The rest of your post, unfortunately, followed the same pattern, so I can understand why balance came into your post. When words like that are used, sorry, but I tend to examine closer what is around them and why. I was not disappointed.

  2. On the 6th December 2020, for over a period of more than 24 hours, the 31 GW capacity of installed wind and solar plants connected to the UK grid was generating only 0.5 GW, this means that the combined capacity factor during that period of time was 1.6%.

    If we have a similar event during or after 2030 when we have followed the CCC’s recommendation and are powering all the UK’s homes with only the suggested 40 GW of offshore wind capacity. The electricity generation available to homes during that type of event will be 640,000 KW per hour.

    On average a UK home uses 0.413 KW per hour. So the 40 GW of offshore wind would be producing only enough electricity to supply 1.55 million of the UK’s 30 million or so homes or 5%.

    So to reliably power all UK homes 24/7 using only offshore wind as suggested by the CCC, actually requires 20 times more capacity (800 GW) than planned.

  3. Which might be the reason that the UK Government is reported to be looking at investing £20 BILLION into Sizewell, John!

    These costs keep on coming, don’t they?

    £28 billion/year for fuel duty lost, £20 billion for Sizewell, expensive contracts to “start” both on shore and off shore wind, etc. etc. Dwarfs the fossil subsidies that some are keen to mention, but perhaps as the subsidy cost of the alternatives starts to be exposed they might be better off to not to do so. Bit like the other nations working to reduce emissions! What they say and what they achieve are quite different. Goodness, that has always been the case, and nuclear development and chemical weapons are clear examples that is the reality.

    So, Governments making promises that have failed previously to live up to promises, and economics which conveniently ignore big chunks of the equation are a sustainable way forward? Don’t think so, because as time goes by there is no way to avoid that both issues will not become reality.

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