Offshore Energies Magazine - Issue 55 Spring 2023

News

Flaring down again as newmeasures bite

In light of the Russian invasion of Ukraine, the then-minister for climate and energy, Graham Stuart, said it was "fantastic to see such interest from industry in this round." He added that the licences would play "an important role in boosting domestic energy production and securing the UK’s long-term energy security of supply." OEUK said: " These applications reflect long-term thinking by companies which will invest many millions of pounds in the North Sea to search for new reserves, with no guarantee of success." The round exceeded the 32nd round in 2019 which received 104 applications for 245 blocks and part-blocks. In 2019 a total of 768 blocks and part-blocks were offered, compared with 931 this year. The Deltic Pensacola discovery, in the gas rich southern basin ( see p17 ) will have fuelled hopes. The NSTA is also consulting on how to quicken the transaction process to allow buyers to take over assets from sellers more easily – another route to faster output growth. Offshore carbon team set up The NSTA has set up a dedicated carbon transportation and storage team. It will oversee the delivery of offshore developments, following successful exploration and appraisal, it said February 1. The government has set a target to capture 20-30mn tonnes/yr of CO₂ by 2030 as part of the plan to make the UK carbon neutral by 2050. Additionally, a successful CCS industry could support an estimated 50,000 jobs and enable further low-carbon technologies, such as blue hy drogen – producing hydrogen from natural gas while capturing and storing the CO₂. The UK’s first-ever carbon storage licensing round was launched in June last year, offering 13 areas for which 26 bids were made. It is expected that licences will be offered for award in the coming weeks. This round is expected to be the first of many: the UK might need up to 100 separate storage sites.

North Sea flaring has halved following four consecutive years of reductions, the North Sea Transition Authority (NSTA) said March 9. Offshore flaring fell 13% in 2022 to 22bn ft³ of gas, down from 44bn ft³ in 2018. Last year’s reduction alone was equivalent to the gas demand of a town the size of Dundee and the saved gas contributed to UK energy security and net-zero emissions ambitions, the NSTA said. This was despite a 17% rise in gas production. The offshore regulator has introduced fines for flaring under some circumstances, incentivising operators to invest in new equipment. One approach has been to install flare gas UK technology and entrepreneurialism will need government backing if the country is to reap the potential reward from the energy transition, the latest and perhaps longest report on net zero emissions says. Author Chris Skidmore, who signed the UK's net zero pledge into law while minister of state for innovation in 2019-20, says this country is lagging behind as continental Europe and the US move ahead. There are the EU Fitfor55 programme, the France 2030 investment programme and the US Inflation Reduction Act, a $369bn package to promote US decarbonisation technology. His 300-plus page report calls for an over-arching government financing strategy by the end of 2023, giving long term clarity to business and investors and ensuring that the UK can capitalise on its industrial strengths. He observes that over 90% of global GDP is covered by a net zero target for carbon emissions and that businesses of all sizes have recognised that net zero can help them grow. Consultancy McKinsey estimates a global market of £1 trillion for UK businesses by 2030 and the government estimates that the transition could support 480,000 jobs in 2030. Further propelling its mission,

the UK enjoys a comparative advantage over other advanced economies in several key areas – notably in offshore wind, carbon capture and storage potential and green finance. Some estimate the UK would see about 2% additional GDP growth through new jobs, increased economic activity and reduced fossil fuel imports. There is also the opportunity cost of not acting, which would run so clearly counter to the prevailing expectations of business and global trends. Mr Skidmore warns: "None of this will happen without a step change in the government’s approach to delivering net zero." He said many respondents are frustrated by "the lack of long-term thinking, siloed behaviour from government departments and uncertainty over the length of funding commitments." Welcoming the report, the-then secretary of state for BEIS Grant Shapps said the report "offers a range of ideas and innovations for us to consider as we work to grasp the opportunities from green growth." BEIS said: "Other countries such as the US with the Inflation Reduction Act are moving quickly, and we must do the same." ( See p42. ) But for new developments routine flaring will be prohibited and routine flaring is to end altogether by 2030. Flaring accounts for about a fifth of emissions from North Sea oil and gas production activities. But some is unavoidable for safety and operational reasons. recovery units, each estimated to save up to 22 tonnes/day of flared gas, the NSTA said. The NSTA has also worked with operators to improve procedures to reduce flaring associated with platform restarts. Some of the reduction has been incidental, such as cessation of operations at older platforms.

Net zero 'needs more state support'

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