A major independent report which sets out detailed routes for meeting the country’s climate targets has recognised the positive contribution the UK’s changing oil and gas industry can make in the energy transition.
The Sixth Carbon Budget published by the Committee on Climate Change today (Wednesday 9 December) outlines an ambitious and challenging programme of change for all industries to meet a range of scenarios. It recommends a future energy system which utilises renewables, hydrogen, carbon capture and storage. Oil and gas demand is expected to fall by up to 85 percent and 70 percent respectively by 2050 depending on the selected scenario.
The committee makes the case for meeting as much as possible of the UK’s ongoing domestic needs from domestic production, warning of the risk that lower production costs internationally could favour imports.
The report confirms the important role of the UK’s oil and gas supply chain and the opportunity that exists from the £50bn investment required annually through to 2050 to achieve the country’s climate goals. The sector has thousands of companies across the UK that are set to play a critical role. The UK oil and gas industry supply chain currently has an annual turnover of over £26bn and the majority of companies are already also active in renewables or other parts of the energy industry.
The leading representative body for the sector, OGUK, today said the report underlines the need to deliver a homegrown transition towards net zero. It comes as the Committee on Climate Change underlined the importance of policy to ensure a fair transition, noting the Government’s planned North Sea Transition Deal can enable workers in the sector to transition to the hydrogen sector and other energy sectors.
The report recognises the role the changing sector can play during the transition and beyond, recommending:
Commenting, OGUK Chief Executive Deirdre Michie said:
“The destination has always been clear, and the UK’s changing oil and gas industry is stepping up to help us get there. As the big choices facing our economy and society come into sharper focus, the UK has an opportunity to lead the way and we are committed to being a positive partner on this journey.
“We recognise that the industry we see today will be different to the one we see in the future. Many oil and gas companies are already adapting and transforming and with our supply chain is actively pursuing the new energy opportunities highlighted.
“As we look to bring these big changes to life, securing targeted support for our domestic supply chain remains critical if it is to attract a healthy share of the £50 billion investment the Committee on Climate Change says will be required annually by 2050.
“As the report notes, how we respond to these challenges at home can have a positive impact globally, and our sector continues to blaze a trail having published a clear pathway towards a net zero industry last year and committed to challenging emissions reductions targets earlier this year.
“This reinforces the need for a homegrown transition which puts the essential expertise of supply chain companies to work, protects jobs, while creating new ones of the future, while maintaining the supply of secure, affordable and low carbon energy produced in the UK to meet demand both now and in future.
“This vision for the future forms the basis of OGUK’s Roadmap 2035, our blueprint for net zero published last year, and its delivery can be accelerated through a North Sea Transition Deal.
“It shows the important contribution our industry can make as the country looks to carve out new industrial opportunities which can be exported globally, while at the same time meeting as much of the UK’s oil and gas demand with homegrown resources produced with ever decreasing emissions.”