THE oil and gas industry’s social licence to operate is under serious threat amid public concern about the environment, firms working in the North Sea have been warned.

The chairman of the Oil and Gas Authority, Tim Eggar, said the biggest challenge facing the industry has been the speed of the shift in opinion on climate change and accused firms of not doing enough to help ease concerns.

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“Industry is not even really in the argument never mind winning it,” said Mr Eggar, a former energy minister.

“It is, in my opinion, collectively not doing enough and its social licence to operate is under serious threat.”

Mr Eggar insisted the North Sea industry could be part of the solution to climate change, with oil and gas likely to remain a critical part of the UK’s energy mix for the foreseeable future.

He reckons that without gas the UK could not meet its government’s target to reduce carbon emissions to zero net of amounts absorbed by 2050.

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However, he insisted: “We have to act much, much faster and go farther in reducing the carbon footprint.”

Mr Eggar said the industry needs to have developed and publicised a compelling package of measures which demonstrates “real, genuine leadership and commitment to net zero” by the time of the COP 26 climate change summit, which will be held in Glasgow in November.

The package should include action to reduce the emission generated by the industry, with measurable targets for greenhouse gases. The industry needs to show real progress is being made to develop projects for capturing and storing carbon with serious work started on at least two major projects.

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But Mr Eggar said the industry had responded well to the challenges posed by the crude price slump, by achieving big cost savings and boosting operational efficiency.

“You have made this basin competitive again. A huge achievement,” he observed.

Activity levels have started to increase in the North Sea in response to the partial recovery in the crude price since late 2016.

However, some services companies are reducing their reliance on the area and the wider oil and gas exploration and production business.

Earlier this week UBS investment bank highlighted the progress Aberdeen engineering giant Wood has made in winning work in sectors such as wind power and solar energy.

The investment bank included Wood in a group of oil services firms that were “ahead of the pack” in terms of responding to climate change.