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Why net zero oil & gas leads to more opportunities

John Scrimgeour

John Scrimgeour looks at the UK perspective on net zero oil and gas and the opportunities it creates

We’re seeing a growing number of initiatives with the target of turning the oil & gas industry net zero. This is the right thing to do, as all industries try to reduce their carbon emissions. But, from a North Sea industry perspective, it’s also a good move that will help develop new tools and expertise, that it can then market to other basins.

In some ways, net zero oil and gas seems absurd, as combusting hydrocarbons for energy is the biggest contributor to the increasing carbon dioxide levels in the atmosphere, which in turn contributes to global warming.

However, while energy supply from clean sources is increasing, fossil fuels still account for nearly three quarters of the world’s energy supply and approximately the same share of the UK’S supply, most of which is in the form of either oil or gas.

Focusing on hydrocarbon intensity

It’s clear then that fossil-fuels aren’t going away in the short-term, so it’s important to focus on how carbon-intensive the fossil fuels we use are.

Some of that is due to the nature of the hydrocarbon. Gas has approximately half the intensity of coal, while oil is somewhere in between. If we can make our hydrocarbon extraction net zero then we make the product more attractive to stakeholders interested in lowering carbon emissions, whether that’s governments issuing licences (or not), or the end users concerned about carbon budgets.

We have seen examples of both. For example, governments refusing to license fields that required excessive flaring. Or oil sands products being more difficult to market, because separating the oil from sand means burning gas to heat it – leading to a higher carbon footprint.

The UK perspective on oil and gas

The UK government already has legislation in place that severely limits flaring and minimises leaks. This should make oil and gas as a product more attractive to end users and adds to the argument that the UK should continue to produce indigenous oil and gas.

In addition to being better for the environment than many imported oils, it improves the UK’s economy and security of supply.

New technology will provide new opportunities 

But we can go further in developing technology and expertise that will allow us to further reduce industry emissions towards the goal of net zero. Areas being looked at are improved leak detection, further reductions in flaring, and energy-efficient field operations (including development logistics and decommissioning).

The OGTC has formed a Solution Centre to lead on this as a lot, but not all, of the improvements will be technology led. Importantly, technologies and processed developed to reduce the local oil field carbon future but will be exportable to oil fields elsewhere and to other industries delivering economic activity in local region.

Working towards making the oil industry net zero doesn’t just benefit the environment. It will help develop processes and technologies that reduce carbon budgets. As these are exported to other basins and industries, they can help others reduce their carbon footprints and develop jobs in your local area. Opportunities exist across a broad spectrum of activity. 

If you need further information on activity in this area Archer Knight have already been gathering information on behalf of clients and would be happy to help.

 

For more information contact dsh@archerknight.com