Oil, Gas and Net Zero

Article by Tom Baxter CEng FIChemE

The Cambo oil field could help decarbonise UK oil and gas production. So why are we not developing it?

LAST month the development of a new UK oil field was cast into doubt after Shell pulled out. In response, the project’s owner Siccar Point Energy paused development but noted it remains robust. Environmental groups celebrated the decision, with Greenpeace urging politicians to end their support for new oil and gas infrastructure. This won’t be a popular suggestion but looking at the numbers, I think there’s a rational argument to make that politicians should in fact support new oil and gas development if they force older developments to shut down. I’m pretty sure that sentence will irk environmentalists and oil industry executives alike (which is no mean feat) but stick with me: it all comes down to carbon intensity.

As you no doubt have gathered, I firmly believe oil and gas to be a key part of any credible, planned net zero transition in the UK. Yes, oil and gas is polluting and in an ideal world we’d turn it off tomorrow, but we need it tomorrow and for the continued short-term to heat homes and heavy industry, and transport around the goods that we all rely on. But, I’m not an outright apologist for Big Oil.  I do not agree with some of their strategies (for one, I’ve been pretty vocal in my opposition to industry’s promotion of grey and blue hydrogen). I will support the good parts and continue to criticise the parts that concern me. For some, the choices are ideological: there is a right and a wrong. As engineers, we know the choices are more nuanced than that. I want to see the oil and gas companies move more quickly towards net zero. To help find a faster path, a good place to start is the numbers.

Carbon intensity

One area that is receiving much attention is the greenhouse gas emissions associated with upstream oil and gas production. Emissions from UK oil and gas production can be found in the Oil and Gas Authority’s Emissions Monitoring Report. The following figure is extracted from the report:

Figure 1: Offshore/total CO2 emissions and carbon intensity 2015-2020 [source EU ETS]

As you can see, total CO2e emissions in 2020 averaged 23.6 kg CO2e/Barrel oil equivalent (BOE). This average measure of "emissions per barrel" is calculated from a large spread of operating oil and gas fields. Depending upon the type of hydrocarbon field – oil, heavy oil, gas, gas condensate – and the operational age, the individual field metrics can vary from around 4 to 35 kg CO2e. Clearly if the UK could produce at the lower end of the metric spread, significant GHG emissions savings could be made.

The North Sea is a mature province and many producing oilfields are nearing the end of their commercial life. They are in a place where, for every barrel of oil produced, the working asset has to produce around 9 barrels of water. Producing those 9 barrels of water requires a lot of energy. Energy is required to lift the water and oil to the surface from deep beneath the seabed. Energy is also required to inject water into the oilfields to maintain pressure and sweep the oil from the rock pores.

Cambo, being a new oilfield, will not produce significant quantities of water for a period of time. Hence it will have a better than average emissions profile for many years. The Cambo emissions profile is shown below – it is taken from Siccar Point’s Environmental Impact Assessment.

Figure 2: Greenhouse Gas Emissions and Intensity for the Cambo Field

Incorporated onto the chart is the UK average CO2e emissions in 2020. As you can see, for around 13 years Cambo would produce at an emissions rate lower than the UK average.

So here is a thought - why not develop Cambo and shut down the UK’s old, more carbon-intensive assets? That would have a significant beneficial impact on the UK’s offshore emissions and not increase oil production. We have a carbon budget. If you accept we need fossil fuels in the short-term, surely it makes sense that we produce the fewest emissions possible per barrel of oil produced? Let’s get the most oil we can from within our carbon budget.

A very controversial suggestion and one that I believe would be vigorously resisted by the oil and gas companies who would be loathed to leave the oil in the ground having invested the cash to develop the field and install their production equipment.

So how could it be implemented? To my mind the most obvious way is to have a material carbon tax. A tax at a level that would accelerate the cessation of production from mature, CO2e heavy assets. (I mention the important role of a CO2 tax in two previous articles on energy efficiency: Energy Saviours 2 and Energy Saviours 3.)

Or the Government could legislate a maximum limit for CO2e/BOE. If an oil company exceeds the limit then the producing asset is given an improvement notice. If improvements are not made then the authorities would have the power to shut the asset down.

As I mentioned before, the implementation of such measures would be very controversial but perhaps the common good should prevail over sweating the last drop of (dirtier) profit from an oil field. We need cleaner energy. We need to put more money into renewables. And we need energy security. We also need to find a way to produce cleaner fossil fuels on our route to net zero.

For more on measuring the progress oil and gas firms are making on the route to net zero, see my previous article on Misleading Metrics.

Article by Tom Baxter CEng FIChemE

Retired Senior Lecturer at Aberdeen University, Visiting Professor of Chemical Engineering at Strathclyde University, and retired Technical Director, Genesis Oil and Gas Consultants

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