UK hails progress on North Sea transition deal
The UK government has hailed the progress that the offshore oil and gas industry has made in implementing a North Sea transition deal reached in March last year.
North Sea operators have managed to curb upstream greenhouse gas (GHG) emissions by 11% versus a 2018 baseline level, the government's department for business, energy and industrial strategy (BEIS) said in a report published on March 21. Under the transition deal, the industry has pledged to curb absolute GHG emissions by 10% by 2025, 25% by 2027 and 50% by 2030 versus the 2018 baseline, and reach net-zero emissions by 2050.
BEIS pointed in particular to progress in tackling flaring and venting of methane. Flaring fell by 19% in 2021, building on a 22% decrease in the previous year, while venting was cut by 24%. All new North Sea developments must avoid any routine flaring and venting, and operators need to achieve net-zero routine flaring and venting across their existing assets by 2030.
The electrification of offshore assets will be key for achieving these targets. BEIS noted that Orstad, Orcadian Energy and engineering consultant Katoni Engineering were working on three projects in this field, having received £1mn ($1.3mn) in government funding.
Progress has also been made in the area of carbon capture utilisation and storage (CCUS), BEIS said. The transition deal calls for the industry to support the development of at least two industrial CCUS hubs by the mid-2020s and two more by 2030, with an annual capture rate of between 20 and 30mn metric tons. In October 2021, the government selected the HyNet North West and East Coast Cluster CCUS projects in north England for funding, while listing the Acorn project in Scotland as a reserve cluster.
BEIS noted that four CCS licences had already been awarded. The most recent one was to Harbour Energy, covering an area of the south North Sea in October 2021.
The government also launched the UK's hydrogen strategy in August 2021, under which £100mn ($133mn) of funding has been allocated. East Coast Cluster alone is set to produce 3 GW of hydrogen, while Hynet and Acorn will provide additional volumes.
BEIS also stressed the continuing need for domestic oil and gas supply as the UK continues along the transition pathway.
"There will continue to be a requirement for oil and gas over the coming years, with fossil fuels continuing to play a role in the UK to 2050," BEIS said.
The government has called for greater development of indigenous oil and gas resources over recent weeks, as the UK strives to wean itself off Russian energy imports while keeping energy bills under control. It is preparing to resume oil and gas licensing rounds, which were put on hold before the COP26 climate summit in Glasgow last year, and it has also said it will keep an "open mind" on onshore hydraulic fracturing for shale gas. A moratorium was imposed on fracking in the UK in late 2020.