Our frontier regions of the UKCS are experiencing real challenges in respect to the Energy Transition. We as a nation and as an economy must be careful what we wish for in terms of ensuring energy security, stable pricing, meeting carbon emission targets and ensuring that the lights do indeed stay on.
These are worrying times, especially for those of us involved in the Exploration, Development and Production of UK North Sea Oil & Gas and it’s difficult for me to start on such a negative point, as I’m ever an optimist having worked all my career in the Energy Sector. This however, may be the first time I am seeing a real change of opinion and switch of political direction.
The Energy Transition is just that, a transition from one to another. We must allow it to take the time for it to be sustainable, affordable and transparent for it to be the success it needs to be with the backing of all stakeholders; from global leaderships to each and every one of us as responsible individuals. A balanced portfolio of sustainable energy sources is required for creating energy security in terms of having wind, tidal, solar, hydro and hydrogen infrastructure in place, a nuclear energy program which is sustainable and effective, adequate storage facilities and transmission infrastructure to allow for maintaining industry and effectively heating our homes not only during peak daily demand but also during those long, cold, dark winters. It is a necessity to have Oil and Gas production to allow us to deliver the various programmes to create such a portfolio which, based on current estimates, is some 10 to 15 years away.
I am concerned about us as an economy lacking the investment ambitions and incentives, not only financially but theoretically, and in our own ability to produce the energy that keeps us self-sufficient. Not for a second am I saying there isn’t a willingness from the industry to do so, but with political parties already signalling their intended stance for the next parliament, there is too much uncertainty preventing investment being committed. If this isn’t changed in the short term and we do not shout loud enough, I fear that in the long run such policy will be to the detriment of our manufacturing capabilities, for example, and our place in the global market will therefore be in serious jeopardy.
Mega projects such as Clair, Rosebank and Cambo, the latter two attracting a lot of political and environmental coverage and attention, are in my mind vital for the sustainability of our energy needs. Being reliant on piped gas from Norway or LNG shipments from countries such as Qatar, will be costly, counter intuitive to our requirements of reducing carbon footprint and should be supplementary to our own oil & gas reserves beneath our waters. There are many new frontier regions lining up and gaining momentum, with the governments of South American and African nations partnering with Operators to commence their journey in the production and sale of energy.
UK plc is at a crossroad, maybe even a T-Junction. We have the innovative thinking, research expertise, knowledge, technology and skill base to transition from fossil to renewable but we need to all work together, go in one direction aligned in our ambition and goals. Make no mistake it is the energy companies that will be at the forefront of delivering the transition, not the protest groups, and the UK government must be mindful of this. If we tax excessively, halt exploration or make financial investment too difficult there are plentiful governments and economies around the world with prospects only too willing to step in.
To finish on a positive, I would like to think that common sense will prevail, it usually does.
If you have any queries about the energy transition please do not hesitate to get in contact with Graeme Robertson, or your usual AAB contact.
