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”.
“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.
- 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