The UK has become the first country to agree a deal with the oil and gas sector to support it as it transitions towards cleaner forms of energy, making it the first Group of Seven (G7) country to do so.
According to trade association Oil & Gas UK (OGUK), some 147,000 jobs were reliant on the oil and gas sector in 2018, either directly or indirectly via supply chains. The landmark deal aims to continue supporting these jobs by leveraging the expertise that has been accumulated since the 1960s to develop emerging technologies.
While many would ideally like to see an end to the reliance on fossil fuels, oil and gas will continue to be needed for some years, both as fuel and to make products like Nynas transformer oil. The deal will see the industry gradually move towards expanding existing technologies like offshore wind, but also embracing emerging technologies like blue and green hydrogen production and carbon capture, usage and storage (CCUS).
The decommissioning expertise in the UK oil and gas sector will also be supported in maintaining a competitive advantage in this market, which is thought to be worth £270 billion around the world. The deal also commits to protecting intellectual property rights in the above areas.
In summary, the agreed deal appears to focus on achieving the energy transition through innovation. In addition, oil and gas producers in the North Sea will be required to reduce their emissions by 10% by 2025, 25% by 2027 and 50% by 2030.