North Sea Oil: Playing its role in reducing greenhouse gas emissions

• Action required to get on lower emissions pathways
• Asset electrification and low carbon power identified as key drivers of change
• Comprehensive plan shows industry path to success

A new emissions reduction plan published  (27 March) by the North Sea Transition Authority (NSTA) has highlighted the need for action across the board on production decarbonisation – including action on flaring and venting and the electrification of oil and gas installations – to ensure the future of the industry and hit net zero targets.

Production emissions reduction is one of the NSTA’s three priorities, alongside energy production and the transition to net zero. Oil and gas still meet around three quarters of UK energy need and, even as demand declines, the UK is likely to remain a net importer to 2050.

The Plan, produced after extensive public consultation and taking onboard feedback, covers four clear contributing factors to decarbonising the industry, and makes it clear that for production to continue in the North Sea, it must also continue to become cleaner.

Industry has done an impressive job in cutting production emissions in recent years, cutting production emissions by nearly a quarter since 2018 and flaring alone as almost halved from 2018 to 2022. However, they still account for around 3% of total UK greenhouse gas emissions and, as power generation was responsible for 79% of production emissions in 2022, electrification or clean power generation can play a significant role in reducing that volume.

Electrification alone could, under the best-case scenario, deliver emissions savings of 1-2 million tonnes in 2030, equal to taking one million cars off the road for a year, and a total of up to 22 million tonnes by 2050.

The Plan places electrification and low carbon power at the heart of emissions reduction and makes it clear that where the NSTA considers electrification reasonable, but it has not been done, there should be no expectation that the NSTA will approve Field Development Plans and similar decisions that give access to future hydrocarbon resources on that asset.

Electrification is not the only option. Other forms of low-carbon power will also be considered if operators can provide evidence of near equivalent emissions reduction. In cases where it is not reasonable that an existing asset is electrified, other low-carbon power emissions reductions strategies must be undertaken.

The Plan also highlights three other emission reduction pathways: investment and efficiency, focus on inventory as a whole, with increased scrutiny of assets with high emissions intensity, and action on flaring and venting.

In relation to inventory, there will be increased scrutiny of assets with high emissions intensity and their cessation of production (CoP) dates. The NSTA recognises that to secure production while reducing emissions overall, it is crucial to look at trade-offs between installations. Closing some low-producing, high-polluting installations earlier could allow higher producing and cleaner new assets to come online while still reducing overall UKCS level emissions.

The Plan emphasises that operators should take action and budget to reduce flaring and venting, with the latter focused on methane, continuing the NSTA’s ongoing work on this. The Plan also sets out a clear requirement that operators monitor and reduce fugitive emissions.

The NSTA will apply the Plan in a reasonable manner, and will not pursue actions that could bring about significant unintended consequences simply because of specific wording in the Plan.

The requirements outlined in the Plan build on existing commitments made by industry, including in the North Sea Transition Deal, with operators having agreed to deliver 50% reduction by 2030, and invest £2-3 billion on electrification. In addition, industry has itself committed to 90% reduction by 2040, and to reach net zero basin by 2050. The NSTA would welcome industry owning and delivering these reductions

Stuart Payne, NSTA Chief Executive, said:

‘Energy production, reducing emissions and accelerating the energy transition are at the heart of everything we do.

‘The Plan strikes the right balance in supporting industry in its work producing the oil and gas which we need and will continue to need in the coming decades, while at the same time playing its role in reducing greenhouse gas emissions.

‘The Plan will help to secure the crucial part the North Sea will play in meeting the UK’s energy needs and provide reassurance that the industry can and does place a very high value in cleaning up production and cutting emissions.’

Source: Energy-pedia