Radicals and Revolutions

Two major announcements from the UK Government, first on the backing of CCS - Carbon Capture and Storage, and then on the granting of new oil & gas exploration licences, are jeopardising the energy transition and our ability to reach net zero 

This is a long way from the truth. Let’s consider the time it takes on average to get from licensing round to actual production of oil and gas. First you have to work up the prospect, appraising the geological and geophysical parameters, which might require new or additional seismic surveys, and then review the results – so that’s about 6 to 12 months. Then a drilling programme of appraisal wells is required – another 2 to 3 years. Then, assuming the economics play out positively, there has to be a production facility installed – either linking into an existing platform, or building a new one, and of course requiring all the associated infrastructure such as pipelines and transfer technology to move the product from source. The average oil & gas discovery takes about 5 years to come into production. That gets us to 2028. So how does that fit with the UK’s net zero target? In June 2019, the UK government legislated a net zero emissions target by 2050 – that’s in a single generation. In 2021 the government set two additional interim targets to run a net zero power system and reduce emissions by 78% by 2035. So here’s a conundrum – all these new oil & gas fields will be coming onstream whilst we have to dramatically reduce our carbon emissions in order to achieve our own targets. 

 

In addition to the reality of how long this will take to get one molecule of utilisable hydrocarbon flowing, as far as the “safeguarding household bills” premise goes, the result would actually have very little impact – if any – on global prices. These new licenses will not only take years to come onstream, but many could also come to nothing being either unviable or uneconomic or both. 

 

What about CCS – Carbon Capture and Storage – I hear you say? Another very recent statement made only just before the licensing announcement was that the government is backing CCS to the tune of £20 billion. Hence, in this brave new world of hydrocarbon production, we will also be capturing the CO2 at source and storing it in depleted oil & gas fields – pretty neat. The problem is we have been talking about scaling up and deploying CCS technology for years, even though the media seem to be portraying this as a new idea. At the moment CCS deals with about 0.1% of carbon emissions in the UK. To meet net zero, it needs to rise to more than 10% - and that figure was landed on before the new drilling licences were announced. And while the big energy companies persistently push carbon capture, in reality they’ve done very little, and have yet to invest on any scale. There has been a positive response to the CCS investment announcement from the scientific community, but with some provisos. As Professor Myles Allen FRS, Professor of Geosystem Sciences, University of Oxford, said: “Great to see much-needed investment in carbon capture, but why does the taxpayer need to foot the bill when the main beneficiaries are precisely those companies looking for new oil and gas licenses? The solution is increasingly obvious: make new extraction conditional on responsible CO2 disposal. At current prices, extractors can certainly afford it!” 

 

To hit our net zero targets we will of course need to be able to extract and remove carbon. But the cheapest and most secure electricity comes from wind and sun. Whilst watching the devastating news footage of idyllic Mediterranean islands aflame, in the UK we have had a cool, damp and extremely windy summer. The figures for April to July are not available yet but in the first three months of 2023, Britain's wind turbines generated more electricity (32.4%) than gas-fired power stations (31.7%) for the first time. We need a revolution in approach to energy to pivot away from hydrocarbons and embrace renewables and nuclear. And – we could do so much if we made energy efficiency a core objective. Britain has some of the leakiest, most energy inefficient homes in Europe. Address this and we can make a leap forward in progress towards net zero. 

 

If we persist in pursuing a strategy of oil & gas business as usual, there is no chance of an orderly energy transition – a disorderly and dystopian outcome is highly likely. And then we could see a revolution of a completely different nature.