Oil deal aims for smooth transition to net zero
North Sea workers will be eased into new roles
A bold new plan is unveiled today to ensure oil and gas communities make the transition to the new energy industries with minimal disruption.
The North Sea Transition Deal will has been hailed as the first of its kind by any G7 country.
It will set an example of how oil and gas producing countries can make the switch towards a lower carbon future in a way which supports the economy and jobs.
Industry leaders have been preparing for the change and argue that many of the skills in oil and gas are transferable to renewable energies.
Developed in partnership between the UK Government and the trade body OGUK, the North Sea Transition Deal outlines more than 50 government and industry actions to accelerate moves towards the government’s target of net zero emissions by 2050.
Key commitments include early targets to reduce emissions by 10% by 2025 and 25% by 2027 and a 50% cut by 2030.
The sector will voluntarily commit to ensuring that over the next ten years half of its offshore decommissioning and new energy technology projects will be provided by local businesses, helping to anchor jobs to the UK.
The deal seeks to unlock up to £16 billion in investment over the next decade in crucial low carbon solutions including carbon capture and hydrogen.
It will support the creation of up to 40,000 new energy jobs in industrial heartlands across the UK .
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Deirdre Michie, chief executive of OGUK, said: “The North Sea Transition Deal is a transformative partnership which will harness the expertise of the UK offshore oil and gas industry to urgently meet the country’s climate ambitions of net zero emissions by 2050.
“It will unlock billions of pounds of investment and see government and industry work together to deliver a homegrown energy transition, realising innovative low carbon solutions that can be exported globally.
“The Deal will safeguard UK energy security, providing affordable energy to millions of households, secure tens of thousands of jobs in industrial heartlands across the country and support the UK economy.
“It is the first deal of its kind by any G7 country and a striking example of the UK showing global leadership on climate change ahead of COP26.”
Business and Energy Secretary Kwasi Kwarteng said: “We will not leave oil and gas workers behind in the United Kingdom’s irreversible shift away from fossil fuels.
“Through this landmark sector deal, we will harness the skills, capabilities and pent-up private investment potential of the oil and gas sector to power the green industrial revolution, turning its focus to the next-generation clean technologies the UK needs to support a green economy.”
Ministers were keen to stress that the transition does not signal the “end of oil” and recognises its continuing role in the future energy mix.
“Oil and gas is still vital to the production of many everyday essentials like medicines, plastics, cosmetics and household appliances – this is likely to remain the case over the coming decades as the UK transitions to low carbon solutions,” said the DBIE in a statement.
“Indeed, the government’s independent Committee on Climate Change recognises the ongoing demand for oil and natural gas, including it in all scenarios for how the UK meets its target for achieving net zero emissions by 2050.”
Energy Minister Anne-Marie Trevelyan said: “We need to urgently end our reliance on fossil fuels and through our pioneering North Sea Transition Deal we will do so without putting our economy and communities at risk.
While the future oil and gas sector will look very different to how it does today, the industry, businesses and supply chains it supports will have a new mission to help the UK decarbonise and develop the clean technologies of the future, as we lead the green industrial revolution.
UK government Minister for Scotland David Duguid said: “The oil and gas industry has already made great strides towards a greener, more sustainable future and the North Sea Transition Deal, agreed between the UK government and industry, takes those ambitions a step further.
“The North East of Scotland has long been seen as a centre of excellence in the oil and gas industry – there’s no reason why it can’t now be seen as a global centre of excellence for energy transition.
“This is not just about making the transition from hydrocarbons to renewables. It’s about a transition of jobs, skills and expertise as well.
“The UK government has worked consistently and intensively with the industry, and we will continue to do so, to make progress on a scientific, data and evidence-led basis.”