Decommissioning Insight 2019

UK CCUS Consultations — OGUK responded to two government consultations related to Carbon Capture Usage and Storage (CCUS). These consultations separately covered business models, and the potential for reuse of oil and gas infrastructure for CCUS. OGUK’s responses to the consultations recognise that the oil and gas industry is fully supportive of CCUS and that it offers further significant opportunities for the UK’s energy supply chain. It is understood that the UK is well placed to be at the forefront of a global capability, and that there are financial opportunities. The potential to reuse infrastructure, for example, could enable reductions in transport and storage costs, as well as increasing flexibility in terms of when decommissioning costs are incurred. 1. The limited remaining design life of older infrastructure and/or its reconfiguration to suit a new service 2. Scheduling issues such as the alignment of projects, and the potential dormant periods experienced by oil and gas infrastructure as it awaits CCUS projects 3. Legislative, fiscal and policy considerations affecting existing assets which will need to be considered if they are re-used or are otherwise transferred into a new legal jurisdiction Scottish Affairs Committee 5 — The Scottish Affairs Committee gathered evidence through a witness session in February 2019 and published a report in March. The report recommends that the government should continue with its objective to work with the OGA and industry to improve the certainty of decommissioning costs and produce an annual report on the OGA’s direct impact on the reduction of those costs. Decommissioning presents a significant opportunity for the UK supply chain. Accordingly, the report also called for the government to set out a strategy for maximising the economic benefit of the development and export of decommissioning skills and resources. Similarly, with regards to the CCUS industry — which has clear parallels with the decommissioning sector — the report called for the government to set out an expected timetable for its deployment and how it aligns with the timeline for the decommissioning of UKCS assets. It should also be recognised that there are challenges to overcome in developing this technology. These include:

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5 https://publications.parliament.uk/pa/cm201719/cmselect/cmpubacc/1742/1742.pdf

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