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UK independents commit to climate reporting standards

Brindex members pledge 'transparency and consistency' as UK aims for net-zero carbon emissions

A number of UK-based independent oil and gas companies are to commit to adopting more transparent and consistent standards for reporting how their businesses affect the climate in support of the UK government’s ambitious target to cut greenhouse gas emissions.

The Association of British Independent Exploration Companies, known as Brindex, which includes Premier Oil, EnQuest, Serica Energy, Cairn Energy and Parkmead Group and others, is expected to make the announcement later on Tuesday.

Brindex chairman Robin Allan said the association accepted that fossil fuel consumption “impacts” the environment and that less carbon-intensive forms of energy will need to grow to meet the requirements set out in the Paris Agreement on climate change.

Allan, also North Sea & exploration director of Premier Oil, said: “To improve the UK’s balance of payments and to ensure that the gas and oil we are buying is not making worse the global quantum of GHG emissions, the UK government must continue to encourage the development of Britain’s gas and oil reserves over foreign imports and promote its support for Britain’s oil and gas industry and its British jobs.”

Allan welcomed the reporting standards formulated by the industry-led Task Force on Climate-related Financial Disclosures.

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Brindex said its members will commit to reducing the energy consumption of their operations around the world and to cutting the carbon footprint and greenhouse gas emissions of their own operations and throughout their supply chain.

They also plan to communicate climate change performance and processes for “governance, risk management and target-setting with internal and external stakeholders in a transparent and consistent manner”.

Allan said the group’s members are committed to playing a “leading role” to support the UK government’s decision in June to become the first G7 country to adopt an ambitious law to reduce greenhouse gas emissions to net-zero by 2050.

Brindex also noted the report earlier this year by the UK government’s independent climate advisers, the Committee on Climate Change (CCC), which predicted that gas demand will remain significant to 2050 and beyond.

Under the CCC’s recommended pathway to net zero greenhouse gas (GHG) emissions much of this gas would be used as both a feedstock for making hydrogen and a back-up supply for generating electricity.

Large-scale carbon capture, storage and usage technology would also enable the UK to achieve its net-zero target.

Allan said Brindex members were “proud” that the oil and gas industry was an “essential component in delivering secure, efficient and cost-effective energy”.

He argued that delivering a domestic source of affordable energy is key to a “nation’s security of supply, growth of its economy, powering homes and contributing to satisfying the growth of energy demand”.

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.

Last week, Ross Dornan, market intelligence manager with trade association Oil & Gas UK (OGUK), pointed out that the CCC has 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 at the Offshore Europe conference in Aberdeen last week.

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.

The UK government and regulators also 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.

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