AS North Sea oil and gas firms face the huge challenges posed by the coronavirus crisis industry leaders are adamant the sector will have a vital role to play in the UK’s drive to achieve net zero.
However, some sceptics reckon their claims may be overblown while there are fears the opportunities that may be presented by the transition to a cleaner energy system could be squandered without a clear lead from the Government.
READ MORE: 50 years after landmark Forties find does North Sea oil and gas industry have a future?
Hopes that the development of offshore windfarms would trigger a surge in industrial activity are in tatters.
In spite of that, industry body Oil & Gas UK remains convinced its members can play a key part in the development of renewable energy sources such as wind and hydrogen.
Skills used developing and working on offshore oil and gas facilities should be transferable while depleted fields and associated infrastructure could be used for the storage of huge amounts of carbon dioxide.
“I think there’s a lot to play for,” said Oil & Gas UK’s chief executive Deirdre Michie.
“ We are going through a really difficult time as are other sectors and the key for us is to sustain the industry so it can continue to contribute in the short term … but also be part of the green recovery which I think it can play a really positive role in.”
She added: “We just have to look at what our members are already involved in, the work they’re doing and the fact they’re working across all sectors. We will need a diversity of energy and our members are already getting involved in those areas.”
Sector players active in renewables include engineering group Wood, whose former chief executive Sir Ian Wood chairs the Opportunity North East development body.
In a column in today’s Herald Sir Ian says the proud legacy of the oil and gas industry gives Scotland incredible competitive advantages amid the energy transition in terms of world-leading expertise, technological innovation and infrastructure.
The potential was underlined by an expert report produced by Wood Mackenzie for the Oil and Gas Technology Centre, which found the energy transition could generate 200,000 jobs.
On the outlook for the North Sea, one of the report’s authors Kristina Beadle said:“In a best-case scenario you still have oil and gas but supplemented by hydrogen production, carbon capture and storage infrastructure and you’ve got the huge growth of renewables … they all work together.”
This could mean offshore wind being used to power oil and gas platforms so production from them becomes net zero, or near to it.
However, the report for the OGTC underlined the need to move fast. Huge amounts of investment will be required along with rapid advances in technology.
READ MORE: Is oil giant's talk of zero-crude refinery just greenwash?
Iain Black, Professor of Sustainable Consumption at the University of Stirling and co-chair of Friends of the Earth Scotland, said the expected benefits of Carbon Capture and Storage were mythical, adding: “CCS has not been shown to work at anywhere near the scale required and has significant costs.”
He said the production of ‘blue’ hydrogen from North Sea gas would be dirty, expensive and leave huge amounts of carbon dioxide as a by-product. By producing ‘green’ hydrogen from seawater that problem could be avoided.
Wood Mackenzie experts appear to have real faith in the potential to develop an integrated energy sector with oil and gas firms at its heart.
The consultancy’s Malcom Forbes-Cable said the UK had “missed a trick” regarding fixed windfarms. Most of the related manufacturing has been done overseas. He added: “However, if we shift and as we do expect to happen towards floating wind, we’ve got phenomenal acreage and so we should be targeting to secure much more of that sector within the UK supply chain.”
READ MORE: West of Shetland remains world class opportunity for oil and gas industry
Equinor developed the world’s first floating windfarm, Hywind, 15 miles off Peterhead. The UK has a chance to become a global leader in a sector that is set to take off.
“We need to see develop a much more strategic industrial approach, to making sure that we secure and we develop the floating wind sector within the UK,” said Mr Forbes-Cable.
“From an industrial perspective you want to back those sectors that benefit the development of offshore wind on the United Kingdom Continental Shelf. As we have seen with oil and gas domestic innovation readily transfers to the international market and so amplifying the economic impact.”
Boris Jonson said on Tuesday that the UK Government would invest £160m in ports and factories to support the development of renewables. Previous administrations were criticised for pursuing a vague and ambiguous approach to carbon capture.
Campaigning group Greenpeace wants a halt to new oil and gas field developments and exploration, but says this must be managed carefully so as to protect workers and communities.
Charlie Kronick, senior climate adviser for Greenpeace UK, said:“The North Sea potentially has a prosperous future ahead, but it will require drastic government action to create a thriving renewables industry and move away from oil and gas.” Mr Kronick noted that workers had told Greenpeace they were willing to move to sectors like offshore wind, if they guaranteed secure and sustainable jobs that no longer existed in the oil industry.
He added:“It’s up to the UK and Scottish governments to remove barriers to progress and to properly invest in an offshore grid. Otherwise east coast energy workers and communities could be left behind and the enormous potential of the North Sea could be lost.”
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