Offshore Europe shows oil and gas industry is focused on net zero
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The dust has now settled on Offshore Europe, the biennial exhibition and conference held in Aberdeen that brings together the global oil and gas industry, and it was a show that gave us much to consider.
I have been attending Offshore Europe since 2003 and I like to think I have a degree of familiarity with the format – the conference is where industry leaders discuss the key trends and technologies of today and potentially tomorrow, and the exhibition is the place for companies to showcase their products.
But this year things just seemed different.
It may have something to do with the fact that the event was held in a brand new venue. It may be a reflection of the level of confidence in the industry or external pressures, or it may be a combination of all these things. It felt different for sure, but there are considerable positives to be taken from that.
Aside from the last two editions where the atmosphere was firstly one of impending disaster then ultra cautious optimism, Offshore Europe has historically presented a platform for the oil and gas industry to deliver a consistent show of strength. For example, one of the supermajors or a large service company can usually be expected to make a high-profile announcement about a large contract win or the development of a technology or system that disrupts existing markets.
But there was none of that this time round. There was a feeling that while things are not fantastic, they are not that bad either. An oil price stabilised at around $60 a barrel is workable for most.
The theme for this year’s event was ‘breakthrough to excellence – our licence to operate’ and while much was made of the considerable opportunities that remain in the North Sea, the main focus among the people who attended the event appeared to be much more on the industry’s social licence to continue doing its job.
If there was one message I took away from Offshore Europe it was that the industry in general is listening to the demands of governments regarding carbon emissions and climate change and wants to be part of the solution rather than being viewed as merely the problem.
So the mood at this year’s Offshore Europe was one of reflection on where we stand, of consideration of what our social responsibilities are and of determination to do the right thing while acknowledging that oil and gas will continue to have an unavoidable and significant role to play in our energy provision for the foreseeable future.
Two words dominated the show this time round: net zero. Earlier this year, the UK and Scottish governments set binding net-zero carbon targets, for 2050 and 2045 respectively, following the publication of a report by the independent Committee on Climate Change which advises the United Kingdom and devolved governments and parliaments on the issue.
On the first day of Offshore Europe, the Oil & Gas Technology Centre announced the creation of a new Net Zero Solution Centre, in partnership with industry, to accelerate the development and deployment of technologies to decarbonise offshore operations and to develop the UK Continental Shelf (ie the waters around the UK) as the first net-zero oil and gas basin globally.
The centre will work with governments, the industry and companion industries such as renewables to address the UK offshore oil and gas industry’s emissions footprint and develop technologies that will contribute to the growing demand for hydrocarbon production and carbon sequestration. Backed by the Scottish and UK governments, the first new projects are likely to be announced by the end of this year, alongside a high-level plan for 2020.
The following day at Offshore Europe saw the launch of an industry roadmap to 2035, which also supports net zero in line with ensuring the security of the UK’s energy provision and positions the oil and gas industry as one of the first major industrial sectors to actively support the campaign.
There is no doubt industry takes this responsibility seriously. Private feedback on research undertaken by one organisation identifies net zero as a key focus. That same research also accepts the industry’s social licence to operate is being challenged, and recruiting and retaining talented people is an issue. It also calls for the industry’s good intentions to be supported by clear action.
The pace at which the oil and gas industry is moving will frustrate some people, including, I presume, those who protested at Offshore Europe on the first day – but it is unrealistic, given the lives we lead and our demands for energy, to expect these changes to happen overnight.
However, Offshore Europe, now in a building powered by renewable energy, provided clear evidence that the net-zero message has hit home and the change has begun.