On 5th March, the Government launched a consultation on Building the North Sea’s Energy Future. It is seeking expert insight into how it can drive the development of the UK’s offshore energy industry against the backdrop of an intense public debate about the right path to net zero. These questions were the driving force of a recent event, hosted by Prospect editor Alan Rusbridger, contributing editor Isabel Hilton and Offshore Energies UK chief executive David Whitehouse. Comprising two roundtable discussions, the event was attended by industry experts, campaigners and policy makers.
The first panel, entitled The Future of the North Sea, opened by establishing some of the strengths and opportunities found in UK waters. “Experience working in the North Sea has always been a real badge of honour and it has truly powered our country for the past 50 years and should for the next,” said Whitehouse. “We have the wind resources, we can store carbon, we have the technology, an oil and gas industry with highly skilled people—if you had to choose somewhere to drive a successful energy transition it’s the UK.”
Rusbridger quizzed the panel on public scepticism about the readiness of technology to fully embrace green energy opportunities. The Net Zero Technology Centre’s Stephen Sheal pointed out that technology and innovation “have driven the success of the North Sea over the last 50 or 60 years.” When it comes to green energy opportunities of hydrogen and carbon capture, our heritage puts us in good stead, he explained: “We’re really good at gases, transporting them and keeping them in reservoirs. There are still some technical problems with gases like hydrogen and carbon dioxide but we have the ingenuity in our sector to solve them.”
The ability of the industry to move at pace was also questioned. Louise Kingham CBE, senior vice president, Europe and head of country at BP agreed that the pace of decision-making and execution needed to hurry up as “it brings down the cost of what you’re trying to do and gives you the opportunity to deploy people in supply chains as efficiently as you can.”
At the same time there was an agreement that action needs to be joined up and there needs to be a greater awareness that transitions take time: “There’s a lot of polarisation between oil and gas and renewables,” said Barry MacLeod, managing director, Flotation Energy. “I don’t think there’s an appreciation that it’s not like flicking a switch, it’s a long process, decades in the making and I don’t think the government gets it.”
Indeed, the point that we need both oil and gas and renewables for decades to come was made very clearly across both panels, with Whitehouse reiterating the figures from the Climate Change Committee. “They say we’ll need 15 billion barrels of oil and gas between now and 2050 to achieve net zero. The UK is only on track to produce four, so less than a third. With the right policies in place we could produce half of this ourselves at home.” This brought up the topic of whether we should produce more in the UK, or import it, which is arguably more polluting. “We’re going to use it either way,” argued Whitehouse. “At least if we do it here we’re supporting jobs and bringing extra value to the economy which could be reinvested in green energy development.”
In the second panel, Securing Green Growth, it was suggested that while it is good news that the UK’s production emissions have dropped, our consumption rate is falling much slower and this is the metric we should be tracking: “Instead of producing stuff [oil and gas] here, we’re importing and consuming fossil fuels made in a dirty way elsewhere,” argued Paul Johnson, from the Institute for Fiscal Studies.
Jonty Rushforth, from S&P Global, suggested that by adopting (and encouraging others to do the same) the Carbon Border Adjustment Mechanism for our emissions accounting, the UK could lead on cleaner production and differentiate itself in the market. “If you go field by field and look at emissions intensity, buyers can start to look at the commodity that will offer them the least emissions making us competitive.”
On the subject of new licences to produce more oil and gas in the North Sea, Carbon Brief’s associate editor Daisy Dunne pointed to the Climate Change Committee being “pretty clear about new fossil fuel projects and licensing not being compatible” with limiting global warming. John Underhill, director for energy transition, Aberdeen University suggested that the UK could take a project-by-project approach and “stop blanket licensing but offer specific opportunities to keep strategic assets going, giving us energy security and resilience that we need in difficult times.”
There was a call for better regulation across both panels. On one hand, MacLeod called for “a more straightforward pathway to avoid projects getting caught up in judicial reviews.” Meanwhile, as Underhill pointed out, the offshore landlords like the Crown Estate are not joined up in permitting licences, “some parts of offshore real estate have up to 10 separate stakeholders with a legitimate claim to the land—unless we sort that out we won’t realise the potential of wind power and carbon capture.”
This potential also requires new infrastructure, it was agreed, to feed the National Grid from newer, greener sources. “We’re rewiring Britain for the new electricity system, away from coal- fired stations where the grid emanates from currently,” said Whitehouse. But this, the panel agreed, would require new electricity substations and pylons—especially on our coasts “to bring offshore electrons to the grid”—something the public might not be prepared for yet.
“If you go up the east coast you see posters everywhere about how they don’t want substations—even the Green MPs can’t support them because there isn’t the social licence,” remarked Johnson. “We need the regulatory and planning systems and grid infrastructure in place quickly to bring that power to shore effectively.”
As the panels came to a close, the critical point that our energy transition requires an “and” rather than “or” attitude towards oil and gas, and renewables, was clear, as Whitehouse reiterated: “We need to tackle the polarisation and do a better job of advocating this straightforward message."
