Regulator Warns Oil and Gas Projects May Face Hurdles Without Emissions Reductions
Energy companies have raised concerns that the new emission reduction requirements do not consider the challenges impacting the industry’s ability to comply.
The UK’s oil and gas sector must take steps to decarbonize production and achieve emission reductions to avoid potential restrictions, as warned by an independent regulatory body.
The North Sea Transition Authority (NSTA) has unveiled a new plan outlining guidelines for developers to reduce their carbon emissions. The regulator stated that these measures are essential for ensuring the industry’s future and meeting net zero targets.
However, to continue production in the North Sea, the NSTA emphasized the need for cleaner practices.
“The plan aims to secure the North Sea’s vital role in fulfilling the UK’s energy requirements and underscores the industry’s commitment to reducing production emissions and cutting down on greenhouse gas emissions,” stated NSTA Chief Executive Stuart Payne.
The regulator acknowledged the industry’s commendable progress in reducing production emissions but highlighted that the sector still contributes around 3% of the UK’s total greenhouse gas emissions.
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Almost 80% of production emissions in 2022 were linked to power generation.
Following extensive public consultation, the NSTA highlighted the importance of electrification and low carbon power in reducing emissions.
According to the document, electrification alone could potentially save 1 to 2 million tonnes of emissions by 2030 and up to 22 million tonnes by 2050.
The regulator advised companies to implement electrification measures in a reasonable manner or risk potential approval issues for field development plans.
Flaring and Venting
The plan also focuses on reducing flaring and venting practices, which contribute to methane emissions, with a greater environmental impact than carbon dioxide.
The Department for Business, Energy and Industrial Strategy highlighted the importance of addressing methane emissions to combat climate change effectively.
Operators are urged to prioritize reducing methane emissions and monitor other fugitive emissions, as per the NSTA guidelines.
“Energy production, emission reduction, and facilitating the energy transition are fundamental aspects of our work. The plan strikes a balance by supporting the industry in producing the necessary oil and gas while contributing to greenhouse gas emission reductions,” commented Mr. Payne.
Offshore Energies UK expressed their commitment to achieving decarbonization targets in line with the industry’s efforts.
“The UK offshore energy sector has made substantial advancements by reducing emissions by 24% since 2018, with a notable 45% reduction in methane emissions from flaring and venting in the same period,” noted Mark Wilson, the organization’s health and safety executive and operations director.
‘Vague’ Plan
The NSTA plan impacts holders and operators under petroleum licenses in the UK, including owners of upstream petroleum infrastructure and relevant offshore installations.
Under NSTA requirements, new developments generating oil or gas after January 1, 2030, must be fully electrified or utilize low carbon power alternatives to achieve equivalent emission reductions.
New developments prior to January 1, 2030, should be prepared for electrification upon commencement.
A spokesperson for Viaro Energy CEO Francesco Mazzagatti expressed concerns about the vague aspects of the NSTA plan and emphasized the need for practical enforcement measures.
The spokesperson added that the plan does not address external factors influencing the industry’s investment potential and ability to comply adequately.
They highlighted the industry’s reliance on expanding wind power capacity on the UK Continental Shelf to facilitate compliance with emission reduction targets.
