Economic Report 2019

ECONOMIC REPORT 2019

Along with this, the UKCS faces the challenge of reducing its own emissions to ensure that the industry maintains societal and poli�cal support. In 2018, GHG emissions from oil and gas produc�on represented around 3 per cent of the UK annual emissions total, in addi�on to emissions from support services and from transpor�ng natural gas to end customers. Many companies have already made commitments to reduce these emissions (e.g. adop�ng zero-flaring policies, methane intensity targets and/or CO 2 targets) and will be further incen�vised to reduce emissions via the next phase of the EU Emissions Trading Scheme (EU ETS), or a similar post-Brexit carbon-trading system. UK offshore operators, supported by the supply chain, will need to con�nue to transform opera�ons to produce oil and gas in a lower-carbon manner. In prac�ce, this means progressively increasing the ambi�on of emissions reduc�on to reach almost zero-emissions oil and gas produc�on by 2050, with any remainder being mi�gated. Overcoming these challenges will mean that the oil and gas industry can con�nue to contribute to energy security in the decades to come and in a net-zero UK economy. Cu�ng off the supply of domes�c oil and gas will do nothing to address climate change and simply means the UK will need to import more of its energy needs. A pragma�c approach to the energy transi�on will help ensure the UK sustains its economic growth whilst decarbonising the energy system. Moreover, the exper�se, technology and resources of the domes�c oil and gas sector can also help accelerate the pace of a managed transi�on.

WHAT INDUSTRY HAS ALREADY DONE:

Reversed the decline in UK oil and gas production and increased output by 20 per cent to around 1.7 million bpd since 2014 — helping to minimise the UK’s reliance on energy imports.

WHAT INDUSTRY CAN DO:

Roadmap 2035 seeks to keep output above 1 million boepd , serving the needs of society and avoiding further increases in dependence on international imports.

WHAT WILL BE REQUIRED:

A continued focus on attractive investment conditions — including support to maintain a stable regulatory and fiscal framework.

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