See all articles

UK industry told to embrace electrification

Kellas Midstream boss says offshore platforms must cut emissions, with OGUK saying 85% improvement is needed

The UK offshore industry has been told it must “fully embrace” electrifying its offshore oil and gas platforms to contribute to the country’s ambitious carbon reduction targets and attract investment while also maintaining its societal licence to operate.

The assertion was made by Andy Hessell, managing director of North Sea midstream infrastructure operator Kellas Midstream, at the Offshore Europe conference in Aberdeen this week.

Hessell said that, while the industry is well-placed to help in developing important technology to trap and store carbon emissions — such as carbon capture, use and storage (CCUS) — just as pressing a priority is “to get our own house in order” in terms of cutting greenhouse gas emissions from operations.

“We have to embrace electrification,” said Hessell.

"I know there are some thoughts about [electrification] projects out there. But they need to move from thoughts about projects into real projects. Some of the majors and some of the bigger companies need to step forward and say, 'okay, we are going to be part of this'.

"Society is looking for real action," he argued.

Greenhouse gas emissions from the running of UK oil and gas platforms currently stand at about 14.5 million tonnes per annum, or about 3% of the UK economy’s total output.

Ross Dornan, market intelligence manager with trade association Oil & Gas UK (OGUK), pointed out that the UK government’s independent climate advisers have said the industry can afford to emit only 500,000 tonnes per annum in a so-called “net zero” world.

In terms of carbon intensity, this would mean going from 24,000 tonnes of carbon dioxide equivalent for every 1 million barrels the UK industry produces to less than 4000 tonnes of CO2 equivalent for every 1 million barrels of production — an 85% improvement. “Make no mistake, that is a huge challenge for industry,” said Dornan.

Hessell argued: “If we do not embrace electrification over the next few years, we have no chance of coming close to that.”

OGUK has said that, alongside increasing societal and investor pressures, greater financial exposure to rising carbon prices has brought more focus on the importance of reducing emissions.

These issues will be factored into decisions around recovery from some fields and could mean that some resources become unattractive to develop, it said.

However, new technology — such as using renewable energy to power installations, or methods of reducing flaring and venting gas — is offering lower-carbon means of producing oil and gas.

Hessell and Dornan were both speaking at an event to launch the next phase of an industry blueprint for shaping the future of the North Sea industry, called Roadmap 2035. The document adds more detail to the industry's recent Vision 2035 plan for what the sector could look like in 15 years, which includes maintaining production at about 1 million barrels of oil equivalent per day.

OGUK said Roadmap 2035 sets out the action industry believes it must take in tandem with government and regulators so it can continue to provide secure energy supplies, support the UK’s move to net-zero carbon emissions and remain an important contributor to the national economy.

One of its commitments is for the North Sea to be a “net-zero basin” in 2050.

OGUK chief executive Deirdre Michie said: “Roadmap 2035 shows an industry in action with a credible plan for the future.

“While we don’t have all the answers to the big challenges we face, we have started work on what we know can be done. We are ready to work with others in developing some of the new solutions the UK needs."

OGUK said the roadmap, which sought the views of more than 2500 industry stakeholders, was one of the first major industrial responses to government plans to reduce or offset carbon emissions to net zero by 2050 in the UK and 2045 just in Scotland.

Also published on Wednesday was OGUK’s annual economic report, which showed 75% of the UK’s current energy needs are still being met by oil and gas, with just over half of oil and gas demand met by domestic production.

Michie added: “The facts outlined in our report (are) evidence that our industry remains a vital economic asset and is uniquely positioned to help the UK meet its net-zero ambitions and energy needs in the years to come.

“We now need a comprehensive UK energy strategy, which recognises the continued role of oil and gas in a diverse energy mix and positions us to support net zero.

“Roadmap 2035 offers a blueprint for how we can continue to meet much of the UK’s oil and gas needs from domestic resources, progressively reduce associated production emissions and develop economy-wide decarbonisation technologies."

Earlier this year, the UK government — in a first for a G7 country — committed to have net zero carbon emissions by 2050.

Despite the ambitious targets, government and regulators insist hydrocarbons — gas in particular — will play a crucial role in the UK energy mix for decades.

They have assured industry that producing as much domestic oil and gas as possible, thereby fulfilling the Wood Review objectives to maximise economic recovery from the North Sea, known as MER UK, is consistent with reducing emissions of climate-harming CO2.

Latest news
Most read