The government’s long-awaited Energy White Paper, published today, warned the oil and gas sector it “must go considerably faster in reducing its own carbon footprint or risk losing its social licence to operate”.
Delayed several times over the past two years, the document said UK success rested on:
“a decisive shift away from fossil fuels to using clean energy for heat and industrial processes, as much as for electricity generation”.
It pledged:
“to push for a high level of ambition amongst oil and gas companies, challenging them to go further to reduce their emissions consistent with our net zero target, while transitioning their operations into emerging energy technologies.”
The government also promised a new strategy for the regulator, the Oil & Gas Authority (OGA). This would help the sector contribute to net zero emissions by 2050.
The revised strategy would include benchmarking greenhouse gas emissions to drive performance and possible changes to the licensing system.
The white paper makes no specific reference to onshore oil and gas exploration or production. Most of the 15-page chapter on oil and gas is about operations in the North Sea. But there are sections that could apply equally to onshore as offshore.
It said:
- The industry has skills, technology and capital to unlock solutions that could help to deliver net zero emissions
- Oil and gas can play “a critical role” in carbon capture and storage, hydrogen production and renewable electricity generation
- The OGA will take wide-ranging action to implement its revised strategy
- The OGA sees the sector’s contribution to net zero as “a proper part of maximising economic recovery”
- Independent advice will be sought on how future licensing would impact on climate and energy goals
Although the white paper centres on the net zero target, it also promises to:
“take powers to ensure we maintain a secure and resilient supply of fossil fuels during the transition to net zero emissions.”
On the oil refining sector, the government said it would seek legislation that would give it powers to intervene in the fuel supply market to ensure “an orderly transition to clean energy supplies”.
A statement from the Oil & Gas Authority said:
“The OGA welcomes the publication of the government’s Energy White Paper and the recognition of the critical role that oil and gas is expected to play in helping deliver our energy needs, as well as enabling game changing energy transition solutions such as carbon capture.
“The Energy White Paper highlights the importance of regulators, such as the OGA, in addressing the challenge of achieving a net zero basin and we are fully committed to continuing our work to support the government to deliver this ambition.”
Updated with quote from OGA issued on 15/12/2020
DRILL OR DROP? 
“Oil and gas can play a critical role in hydrogen production”.
Seem to remember that was a point clearly made at the recent Loxley planning meeting.
Confirmed as intended policy now.
Oops.
Whilst we must acknowledge that gas has a role to play in our energy mix, we must also acknowledge it will be a diminishing one, clear from the recent CCC report and this White Paper. This can only further weaken the case for fracking and the exploration of new oil and gas reserves.
The timescales are tightening and the direction by government much clearer. This will speed the transition.
It is good to read that at long last the government intends to overhaul the planning system to reflect Net Zero policy. Let’s hope this delivers. Also it is heartening to read that the impact of any new licensing may have on the government’s emission reduction targets will be assed by an independent body. So presumably not the OGA!
The entire White Paper and CCC report is of course focussed on the reduction of emissions and transitioning away from fossil fuels. And whilst CCS and gas is included, it is clear that oil and gas will play a less important role going forwards. And hydrogen is no panacea for the gas industry, because as the CCC stated, the case for hydrogen produced by methane, may be overstated because of emissions. And the White Paper acknowledges there may need to be a far greater shift to hydrogen produced by renewables, so called green hydrogen.
We must embrace this change and be at the forefront of a green industrial revolution, with economic, health and environmental benefits.
From the Energy White Paper
“Around 95 per cent of global hydrogen production is fossil-fuel based. A complete switch to clean hydrogen is required, together with a major increase in production capacity. The UK currently makes up to 27TWh annually.The Climate Change Committee (CCC) suggest we may need a ten-fold increase by 2050, with the option to go further depending on the scale of hydrogen use in heat, transport and power. “
CASE STUDY
ITM Gigastack
ITM Power are a manufacturer of
PEM (proton exchange membrane) electrolysers, a technology which enables the generation of hydrogen from water. The company is based in Sheffield, UK. Coupled with a renewable energy supply, this production method is capable of producing zero carbon hydrogen. The Gigastack project explores the potential to scale up electrolyser size and integrate those units with offshore wind facilities. BEIS is currently supporting a consortium
led by ITM Power along with Ørsted, Phillips 66, and Element Energy, funded as part of the £505 million Energy Innovation Programme.
KatT, annual world production of Hydrogen is around 70 million tonnes, only 1% of that total is manufactured using renewable energy due to the excessive cost.
ITM Power and Shell are involved with building the world’s first industrial scale polymer electrolyte membrane for the production of Hydrogen.
The new plant is in an Oil refinery and Petrochemical complex at Rhineland, Germany.
The plant makes use of surplus steam from the chemical plants and refinery to drive turbines and generators to produce the electricity.
The new plant is capable of producing 1,300 tons of Hydrogen annually and will increase the capacity of the site, which already produces 180,000 tons of Hydrogen annually by steam reforming Methane.
Steam reforming and partial oxidisation of Methane are by far the two cheapest methods for producing Hydrogen and account for 6% of global Natural gas use.
That is why steam reforming of Methane along with Carbon Capture and Storage were chosen as the methods that should be used to supply the UK domestic market, in both the Leeds City Gate and the Liverpool-Manchester Hydrogen Cluster research projects.
The recently announced H2H Saltend project by Equinor will use steam reforming of Methane and CCS to decarbonise industry in the Humber region.
KatT
I’m very pleased that you are in favor the government adapting the planning process & speeding up the transition to net zero.
Hopefully the planning process will exclude local councils & work to a fast tracking process without the constant delays currently encountered. This is not in the national interest or reducing carbon emissions by 2050 with the process being dragged out for so long & at such expense.
At last we agree that changes to the planning process in this respect would be beneficial.
I include a article link from the Independent that is of the leaked Supreme court decision to allow the Heathrow extension plans.
https://www.independent.co.uk/travel/news-and-advice/heathrow-airport-supreme-court-third-runway-b1774399.html
The judge in the Judicial review case brought by Sarah Finch is also waiting for this ruling which was due to be handed down tomorrow but I will let you read the details for yourself.
Meanwhile, what is currently available to produce hydrogen and very much cheaper, is gas! (Especially if produced in UK and contributes taxation at the same time.)
So, call me old fashioned, but if HUGE investment is to be made in infrastructure to allow hydrogen to be utilised more widely, then perhaps that would stand much more chance of being accepted if the hydrogen was not horrendously expensive.
Goodness, these wind turbines are really expected to do so many things, all at the same time! Doesn’t add up and will not. The salvation to that is nuclear, but that takes decades and many £billions, so there will need to be a practical roll out of hydrogen and dogma could kill it at infancy.
Renewables in their current form are intermittent, unreliable and not able to supply all our electricity demand.
This was clearly demonstrated during ‘UK wind week’ with coal outperforming the 10,900+ wind turbines that are connected to the grid. At times during that week, our 24 GW of wind capacity struggled to provide more than 1% of the demand, with all our other generation methods including gas and the European interconnectors working at maximum, our last remaining coal fired generators had to be called upon to supply up to 7% of the demand.
Until the problems of intermittency and unreliability with renewables are solved, there will remain a role for the base load and flexibility that gas and nuclear can provide to the system.