Photo: Oil and Gas Authority (for illustration purposes)

UK regulator tells how oil & gas sector should work to reduce emissions

UK’s petroleum regulator, the Oil and Gas Authority (OGA), has outlined how the oil and gas industry should work to reduce greenhouse gas emissions in its new net-zero report.

The OGA has today launched its ‘Stewardship Expectation 11 – Net Zero’, setting out how the oil and gas industry should reduce its greenhouse gas (GHG) emissions and support the delivery of the UK’s net-zero target.

In 2016, the OGA introduced a set of Stewardship Expectations across the oil and gas lifecycle. These were designed in consultation with industry to give operators and licensees clarity on expected behaviours and good practices.

Today’s Expectations report is in line with the UK’s net-zero plans. Namely, in 2019, the UK and Scottish governments both passed legislation for net-zero targets for carbon emissions by 2050 and 2045, respectively.

In the Expectations report, the OGA said it expects the upstream oil and gas industry to reduce, as far as reasonable in the circumstances, greenhouse gas emissions from all aspects of their upstream operations.

This includes the development of new hydrocarbon projects; existing producing assets; the abandonment and decommissioning of fields; and the progression of potential energy integration/net-zero solutions to assist the Secretary of State in meeting the net-zero target.

Expectations for oil and gas sector focus on three areas

The new Expectation is the 11th in the set and is focused on three main areas.

The first one is creating a culture of GHG emissions reduction within the United Kingdom Continental Shelf (UKCS).

The second one is ensuring that GHG emissions reduction is considered throughout the entire oil and gas lifecycle.

The last one applies to collaboration between all relevant parties to support and progress potential energy integration developments (such as electrification, carbon capture and storage, and hydrogen).

In February 2021, the OGA’s revised Strategy came into force, now requiring industry to operate in a way consistent with net-zero ambitions, lowering production emissions and making progress on the solutions that can contribute to the UK achieving net-zero.

With this new Expectation in place, the OGA said that operators must demonstrate – at every stage of the lifecycle – a commitment to reducing greenhouse gases.

The petroleum regulator also said it will monitor performance closely through an annual stewardship survey, performance benchmarking and tier reviews.

Scott Robertson, Director of Operations at the OGA, said: “Development of this Stewardship Expectation drew on the OGA’s knowledge of many of the good practices parts of industry are already implementing. However, the Expectation is an opportunity for the whole industry to see what the OGA is looking for consistently across every operator – in the interests of the UKCS playing its part in helping the country deliver net zero.

“At a time when the industry’s social licence to operate is under threat, understanding and adopting good practice emissions reduction actions will help the industry play its role in an orderly energy transition”.

Speaking of the oil and gas industry’s licence to operate, as reported earlier on Monday, the UK government is considering declaring the beginning of the end for the North Sea oil industry with a ban on new exploration licenses.

The options on the table include an end to issuing licences in 2040 as well as an immediate temporary pause in licences.

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Robertson added: “Our Stewardship Expectations have been tried and tested over the years, and this latest addition is another step on the OGA’s journey of integrating net-zero into everything we do. This Expectation brings to life the practical, tangible actions operators must take to implement our revised Strategy into their everyday work”.