The revised Strategy reflects the ongoing global energy transition. Oil and gas currently provide about 75% of the UK energy consumption and official government forecasts expect oil and gas to remain important to the UK’s overall energy mix for the foreseeable future, including as we transition to net zero.
As long as this demand exists, managing production and maximising value from the UKCS as cleanly and efficiently as possible is necessary for security of supply, to ensure an orderly energy transition, and to reduce reliance on hydrocarbon imports. This is especially important as some imports, such as liquified natural gas (LNG) has a carbon footprint more than twice that of UK-produced gas.
The Strategy requires industry to operate in a way consistent with net zero ambitions, lowering production emissions and making serious progress on the solutions that can contribute to the UK achieving net zero. The OGA believes the industry has the skills, infrastructure and capital to help unlock net zero solutions, such as Carbon Capture and Storage (CCS) and hydrogen production.
In addition to the net zero obligation, the revised Strategy also requires industry to work in such a way that encourages collaboration with the supply chain and actively support carbon capture and storage projects. The OGA will monitor governance closely and ensure that carbon costs are considered in its regulatory decisions.