UK Upstream Regulator Shifts Focus to Emissions
The UK offshore regulator Oil & Gas Authority (OGA) has embarked on a fundamental shift in its policy approach to oil and gas, CEO Andrew Samuel told IP Week conference in London February 26. Set up in 2014 to separate the government from the producers and so prevent conflict of interests, the OGA's objective was originally to maximise the economic recovery (MER) of the UK.
This has been replaced by the objective of a net zero carbon UK Continental Shelf by 2050, following the government's plan for the UK as a whole. That entails a close scrutiny of companies' licence to operate: as NGW commented earlier this year, MER and net-zero carbon are not compatible: some oil and gas will be deemed too dirty to produce.
Samuel said that many of the producers had taken big strides towards that goal, for example through electrification of offshore platforms instead of using gas to drive turbines. Emissions had fallen offshore by 13% and oil and gas production efficiency had risen on average by 15%. But he said no company was doing as well as it had to, across the board, and they all could improve in at least one area. OGA has been visiting companies and collecting data from each and so it knows where the weak points are, he said. "We must level up the performance," he said. "Nature-based solutions will be the easy bit. Now we have to be strategic," he said.
This year's conference marked an abrupt departure from the traditional IP Week conference themes such as host governments and their relations with the international oil companies (IOCs) and the perennial question of the IOCs' reserves replacement.
Samuel's presentation fitted well with the theme of the conference, which addressed the energy transition and decarbonisation in order to meet the global temperature change ceiling of under 2° C. There was little detail from speakers however about how this would be achieved, and at what cost to society, in the coming few years. There is also the acknowledged conflict between the OECD countries' aims to reduce emissions while a few billion people still lack electricity for cooking and lighting.
And if consumers globally are responsible for four fifths of CO2 emissions compared with the upstream's one fifth, maybe that is where the attention should be focused. During one session held under the Chatham House rule, which forbids identification, one speaker was spontaneously applauded for saying that rather than feeling the need to apologise, energy companies should unplug the generators, turn off the refineries and stop transporting oil and gas just for a month. This would force environmental groups to the negotiating table. He said that energy companies had taken up the middle ground, while the protesters have become more extreme, making dialogue impossible. "How can we deliver our message?" he said.