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. It’s a pity that they couldn’t think like that when they were handing out licences to cover most of the North of England and large parts of the rest of the country in fracking sites.

  2. A good move in the right direction but too little, too late, as ever. The government still has to agree these recommendations and we all know they will be watered down; then companies have to implement them and we all know that’s a fiddler’s game; then by 2050 it will be “oh no, we haven’t achieved our targets!”
    We cannot afford to look away yet.

  3. Lot of talk about incentives (yet to be implemented). Carbon reduction – yes – but not convinced of the means of delivery. Targets without realistic means of delivery will cause price increases. Looks like delivery will still be in the hands of existing parties (companies). Looks like a lot of faith in offshore wind which has variable supply and will rely (even more) on the grid take up peaks and troughs with elsewhere. Suspect substantial storage needed to store electrolysed hydrogen for heating (using surplus/ peak) wind supply. Means of domestic energy reduction will not want successive changes in policy and incentives – a recent example being a statement to replace (existing) gas boilers – with what?

    • With air sourced heat pumps, Alan!

      BUT, please show me how they will work with the density of housing we already have in the UK. Mine works okay, but I am taking heat from the air without anyone else doing the same within some distance. Try doing it with many households doing it within a close proximity and you will find there is not that much heat to “take” when it is minus 4 degrees.

      Arithmetic and physics again-the failings of the alternative culture, as detailed by the Chief Scientific Officer a while ago-and still the case.

        • Great brainstorming Paul!

          The question is who is going to pay for the conversion of heating systems in the majority of UK homes & have you any idea of what the cost may be per home?

          You & Ruth the UK taxpayer or individuals?

          Freedom is not just having what you want but carries responsibilities so be careful what y wish for!

        • Maybe Paul, except that sounds very much like the marketing for solar panels! Work when the sun shines in the summer, not so good in the winter. A bit more problematic when heating is the desired end result.

          Where will all the electricity come from during a cold spell, with little wind?? As always, back to the maths. and physics.

  4. Meanwhile, the temperature in the UK is below seasonal average, and many have cranked up their gas central heating. Good job really, we would not want more people dying from fuel poverty induced illness, now would we? Too many already in this country who face the eat or heat dilemma.

    Oh, and additionally, Brent Crude now flirting with $50/barrel as vaccines start to feature and the markets anticipate a return to more normal times. Suspect airlines will be anticipating a busy 2021. I certainly know a number of essential workers who have been raking up the hours this year and have their sights upon a number of overseas holidays next year.

    Shame Mr. Musk has had more issues regarding snakes and lizards in Germany! So, Ineos and Antwerp, just standard planning practice these days and nothing to do with the “down stream” issues. Interesting how quickly events overtake fake news. Always have, always will.

  5. A interesting article as even drill or drop imply here that Sarah Finches case against Surrey council had no legal standing.

  6. Lord Deben should point out that the government’s strategy for coping with the climate emergency is inadequate. He should point out that government’s funding of HS2, for example, standing I believe at around £150b, dwarves their commitment to tackling what is surely humanity’s existential crisis – £20b over the last 4 years, and another £4b projected in the 10-point plan. This is derisory and embarrassing, not to be taken as a serious involvement with the problem, especially when the world, metaphorically and actually, fracks with one hand while distributing our money with the other. He must also, and perhaps he does in the report itself, highlight the need for government to pursue what I – definitely a non-expert – understand to be the most effective of carbon capture strategies, agricultural drawdown and soil enrichment.

  7. Well, 1720, you seem AGAIN to have problems with the maths.!

    Fuel duty stands at £28 BILLION PER YEAR to the UK. That is quite a commitment. So, if that is to go, you may have the answer to how that is to be replaced, but I doubt it. Will electricity prices have to pick up the £28 billion PER YEAR, and thus add to most people’s heating costs? Will electric cars pick up the tax as road tax, that would make an expensive product a VERY expensive product?

    Of course you can claim a grievance if you ignore the realities, and the maths., but someone has to consider both.

    • Martin: the anti’s don’t have the capability to understand the Maths. The ANTI’s want all the benefits of Oil & Gas treasury receipts, employment and opulence for the UK over the last 40 years. (£100’s of Billions of UK Pounds)

      But they also want to be Green, they want the UK to be part of no industrial 🏭 power association and certainly not in their back yard and they want to feel (green) good while destroying any potential energy replacement for the benefit of supporting carbon net-zero! BUT they still don’t want to change how they currently live, consume and emit!!
      Oh the IRONY!! 🙄

      • Martin Collyer

        Great point as I think even if normal electricity company prices don’t rise, I am sure that the government will increase the VAT on fuel from 5%.

        The key question is how high will it need to go to make up the fuel duty of low carbon emission vehicles, electric vehicles lost & the ever declining road tax take 20% , 30 % 35%fuel Vat?

        We have already heard that the chancellor is looking at per mile charging on electric vehicles so prepare for not only higher electric vehicle prices & replacement batteries but significantly higher household electricity costs & vehicle charging point costs.

        We only have 200,000 electric vehicles of the 30,000,000 vehicles on the UK roads.

        Can Ruth, Paul & the supposed green posters here confirm if they drive petrol / diesel vehicles or electric vehicles?

        If you will not confirm we will presume you are all hypocrites & want everyone to do as you say not as you do!

        As of yet we have not even yet factored in what are predicted to be the extortionate costs of so called green hydrogen!

        Higher costs, higher inflation & higher interest rates coming to you soon & that will undermine the value of your homes & ivory towers & we have not factored in the costs of this global pandemic or Brit exit yet.

        Never mind the new carbon capture & recycling technologies being developed that will strip carbons from the atmosphere & make them recyclable ( uses could include wind power turbine sails etc.) which have the potential to bring better than net zero results but no mention by Drill or drop!

        • MH:

          Well, electric vehicles CURRENTLY receive a whacking great SUBSIDY with regard to VED! Strange, that the antis ignore that when talking about subsidies !LOL.

          So, not only £28 BILLION per year in fuel duty, but all that VED to pick up AS WELL. A subsidy for 200,000 vehicles will not be applied to far greater numbers, and that was the case with regards to on shore wind turbines.

          So, some individuals who campaign, truck around in their 3litre diesel BMWs.

          I have tried two hybrid vehicles and found them to be far worse in reality compared to the marketing hype. I was fortunate I was able to apply a 7 month lease in each case, so the trial was not too costly, but will not be going that way again. (Ironically, little old UKOG supplied me with the funds to trial!)
          I note the recently opened electric service station has a gym attached so you can pedal away to create your own energy!! OMG. I see
          an opportunity to open a chain of service stations and have traffic travelling between them taking goods/messages and improving the land at the same time, avoiding the land flooded by the beavers activities. Think I shall call it the Pony Express!

          I do like the idea of carbon capture and recycling. Wifey always reminds me around this time of the year about the value of carbon, and whilst her maths. may not be that good her grasp of physics is not so bad.

          • Martin Collyer

            I wonder if they have ever thought about putting a dynamo onto all the electric vehicles wheels to run the vehicle & recharge the battery as it goes along. It would reduce the running costs as well?

            They could always include a chain & some peddles for emergencies!

    • Yes, Martin, I remember your maths, or do you mean arithmetic, (neither of which by the way figure in my posting, unless you consider that the statement £150b is much more than £20b and £4b qualifies as ‘maths’ – I don’t)? We had a discussion some time ago when the arithmetic underlying my point that ‘home indigenous gas + non-indigenous gas = more gas’ escaped your arithmetic and your “reality” (which you’ve found it difficult to define) completely. I’ll pass on your ‘maths’ and on your ‘reality’ if you don’t mind, especially if you are the “someone who has to consider both”.. Try reading my post again. I don’t think it’s too difficult.

      • Except your £150bn ESTIMATE is spread over MANY years 1720!! And there are already good and standard examples to show that historically and currently eg. the nuclear deterrent. So, quite a standard piece of maths. that escapes you.

        So, there we go.

        Perhaps £28bn PER YEAR, just for starters, could end up a much larger figure over 10 years? I even put the PER YEAR in large to help you, and then your come back was that I should read!!

        In respect of anti economics it is just more of the same, just miss out significant chunks of the equation, or propose there are solutions that have yet to be established. Even my childhood comic annuals showing the “future”, concentrated on the latter, rather than going for the double. And not just my view, but one that has been stated by a previous UK Chief Scientific Officer.

        And yes, more home gas or oil REPLACING imported gas or oil does NOT mean more gas or oil. The MORE gas or oil would then be from other countries decisions. Now, you might not like that but that is REALITY.
        If I grow courgettes in my garden NO courgettes are trucked into UK for my consumption. Spain may still produce and send more to Germany, so if you have a beef about courgettes then don’t try and make out UK producing more will maintain Spanish output-take it up with the Germans! And just remember all those UK souls in Farm Shops selling their UK courgettes and then paying tax to help fund the NHS.

        But, there again, fossil fuel must be demonized to the extent that it is quite unique in respect of supply chains and economics, even though it is not. Says a lot about the strength/weakness of the anti position.

  8. Oh yes, EG.

    There are a lot of groups who want a grievance and offer no practical solutions to their grievance, and simply ignore the real financial and social costs of their dogma.

    And, WHEN has the UK EVER managed to produce a sensible energy policy that has stood the test of time? So, why different this time?

    Zealots can be discovered in many ancient texts, and now given a new lease of life via the Internet.

    However, one day soon SOMEONE will have to discover £28 BILLION down the back of the sofa for every year (for starters)-but not from the wealthy as they are mobile and will be long gone.

    I just wait for the “children” who are supposed to embrace all of this, some without the benefit of education, to realise they are the ones who will pay for it PLUS the costs of Covid. Not Green, but green. I can sit back and watch with interest as it will not impact me at all but having seen how the Australians reacted at an election to such matters being imposed, or attempted, it will not end well. I would wager the first major impact will be food shortages as agricultural land has been re-allocated to non food uses whilst population growth has continued.

    Meanwhile, my heating has been on all day today, (fully insulated and double glazed!) but I do sympathise with those who can’t afford that-even now. Those who claim green not too worried about those that are blue.

  9. This is reality. It serves no purpose arguing about cost because there is no choice, we cannot continue as we are or tinkering round the edges. This is the change that has to take place. Because the costs of catastrophic climate change will dwarf the cost not investing in green energy, green technology and change. Investing in these new technologies will create sustainable employment and generate, wealth and revenue.

    Hopefully a long overdue overhaul of planing will take place so that policy, guidance and law will reflect climate change obligations and statute.

    The O&G industry has denied, delayed and green washed for long enough, the CCC is absolutely right to call for them to face the reality of climate change and to change. And it is clear that blue hydrogen will not be the panacea that the O&G industry claim it is.

    As for fuel poverty, it is a disgrace that we have fuel poverty, indeed poverty of any kind, when we are one of the richest nations in the world. And when O&G companies make billions a year in profit and energy suppliers have had to be sanctioned, it shows that fuel poverty is both political and market failure.

    I have had an air source heat pump for several years and it has been reliable and economic. I cannot recommend them highly enough. I would also add that all my neighbours have heat pumps and they all work perfectly, without issue.

    We are only at the start of this green industrial revolution and with new energy storage options available and investment in science and engineering, we will achieve our goal. Greater energy efficiency measures alone can significantly reduce energy consumption. This change is not only possible but the U.K. has the skills and opportunity to become world leaders.

    I’m not surprised that this article has ruffled the feathers of so many fracking and fossil fuel supporters. Lots of people understandably resist change, the change curve shows that, but there comes a point where the change becomes inevitable and you either embrace and accept it or simply get left behind. It is clear from the CCC that changes need to be bigger and happen much quickly and it looks as though governments at long last are accepting this and realise the benefits.

  10. Except, KatT, whether you have close neighbours, or not, may be a consideration, which is the point I made. Interesting how you ignored that bit. I, too, have had an air sourced heat pump for several years, and it works well. I also have gas that I utilise when I need to do so, usually when the temperature is low, and my air source is limited-and I have no close neighbours. But, I also remember when ground sourced heat pumps were also advocated and the issues which came apparent, so I am skeptical that air sourced are the full answer even though my own experience is reasonably positive. And “energy efficiency” is just the comfort blanket the Greens use when things don’t add up.

    No one, that I know, is not aware change will CONTINUE to happen. The discussion is that many disagree with the sort of change you support. If enough disagree with it, then the sort of change you support will be moderated. If they don’t, then the sort of change you support might happen-BUT, then, IMO, it will be modified pretty quickly.

    And, you may continue to show how you have little empathy for those who suffer from your dogma. First it was the young kids in DRC now it’s those in fuel poverty which is ACTUALLY caused by people being expected to pay a high price for their energy use and their income is not sufficient. Once again you look at the income angle but ignore the cost one! Perhaps compare UK energy costs with other countries? How do you think the green premiums are recovered today? How do you think the bigger ones will be in the future?
    That doesn’t fit, so just ignore. Oh, and by the way, some of the pensioners who can afford to avoid energy poverty can do so currently through their income supplement from companies like Shell, but certainly NOT from Tesla.

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