Energy Transition Outlook 2021

ENERGY TRANSITION OUTLOOK 2021

Figure 11: Emissions from UKCS oil and gas end use in 2018, Million Tonnes CO 2

combustion of UK-produced oil and gas. Figure 12 below includes an assessment of the likely position by the mid-2040s in this respect. In considering this it should be noted that this is the likely outcome for UKCS only and not necessarily reflective of the entire UK consumption of oil and gas which will also include imports.

3%

1% 8%

Figure 12: CCUS potential by mid-2040

2%

80

High

End use emissions 2018 217 MtCO 2

70

Regular Heavy Oil 20-23 Gas Extra Heavy Oil NGL Condensate Light

45%

60

50

CCUScapacity (lowandhigh) Emissionscombustion Emissions re ningandprocessing Directemissions

35%

40

Low

30

20

6%

Source: Rystad Energy

10

0

Directplusprocessing / re ningand combustion

CCUScapacity

Directplus re ning /processing

By the mid-2030s, the expected roll out of carbon storage facilities would likely offset both direct emissions and those from processing and refining which would be in the range of 20-30 million tonnes. However, emissions from combustion of the oil and gas being produced would remain significantly higher. By the mid-2040s however, the production and use of oil and gas in the economy will have fallen while carbon storage capacity increases. With a greater roll out of carbon storage capacity, this should more than offset the emissions, including those from the

Investments in carbon capture and hydrogen technologies therefore represent an important opportunity for the oil and gas sector to contribute to the objective of net zero, but continued progress is dependent on these projects being attractive to investors. These technologies will not have the same characteristics as oil and gas assets in terms of balance sheet impact, risk profile and return on capital.

23

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