As the saying goes, “talk is cheap”. I’m not so sure. The lower carbon economy is at the top of most agendas nowadays – for the UK and international governments, for major industries including oil and gas, and now for the general public.
One cannot look beyond any newspaper, public event, board meeting or social media post without witnessing a broad range of discussions taking place on climate change and how, when, or even if we can address the challenges before us.
Indeed, the UK’s new prime minister said tackling the climate change agenda was at “the absolute core” of the government’s actions, insisting “private sector-generated technology” will help meet the net zero 2050 emissions target and create hundreds of thousands of jobs along the way – part of the “Green New Deal”.
Well, no matter what your personal position, it’s probably a safe assumption you have talked about it with your colleagues, friends and family.
And while it is heartening we are all talking and becoming more aware of the science and scale of the challenges, discussion alone will not solve the problem.
It’s time to put our collective shoulder to the wheel and get on with delivering affordable solutions.
“Collaboration” is a popular word in our industry but make no mistake, working together to solve problems is precisely what is needed here.
Both Oil and Gas UK and the Oil and Gas Authority have created new fora and platforms for operators, original equipment manufacturers and service companies to work together, pool resources and bring their own unique strengths and perspectives to the table to tackle technical, commercial and economic problems.
That means getting out of our traditional silos and accepting that, individually, we don’t have all the answers and that only by developing new partnerships across our industry can we hope to generate the type of technologies the government is looking for.
We must also look beyond our own industry for those answers – for example, some of the technologies we may take for granted in oil and gas operations today were actually developed in the health care and aviation sectors.
The Oil and Gas Technology Centre – based in Aberdeen, the beating heart of oil and gas innovation – can play an important role.
It’s a great, practical example of how companies, no matter their size or heritage, can come together, co-create solutions and pilot new technologies and services.
That’s exactly the type of approach we need if we’re to lead the transformation of our industry, and avoid simply becoming marginalised as the changes take place around us.
The prime minister said he hopes technologies that will help meet the 2050 target can be showcased at next year’s COP 26 UN climate change conference, to demonstrate “what UK technology and technological optimism can achieve”. So the pressure is on to deliver tangible results, and quickly.
The good news is we are seeing examples of action taking place.
London played host to Climate Action Week in July, where a series of events were held across the city exploring local, national and international activities to tackle the climate change challenge.
Mayor Sadiq Khan called for businesses, technologists, artists and the general public to help explore cleaner energy solutions and zero emission transport.
The OGA also recently published its policy position on the energy transition, recognising its role and setting out precisely how it will support the move to a lower carbon economy.
Encouragingly, the OGA will do this with maximising the UK’s economic recovery objectives very much in mind, in order to “create further efficiencies and contribute to the industry’s continued licence to operate”.
That’s a crucial component and one that again encourages a combined approach by all players.
The Committee on Climate Change set as the highest possible ambition the goal of reducing carbon emissions to net zero by 2050 and – by its own admission – it’s a hugely ambitious target, not least because its delivery relies in part on some technologies not yet commercially available – carbon capture and storage being one example.
In terms of domestic power generation, with rising import gas dependency, the retirement of much of our nuclear fleet and all our coal-fired power stations, finding secure, affordable low carbon solutions is an enormous task.
And let’s not take lightly the significant costs associated with hitting those targets, much of which will be borne by the public as energy consumers.
It’s vital society as a whole really understands what achieving those targets involves.
Meeting the target also requires major societal behaviour changes which cannot be underestimated, such as encouraging homeowners to reduce the temperature on their thermostats and to reduce consumption of beef, lamb and dairy products.
Such changes are not easily achieved, and politicians too face an unenviable task to get people to buy into them.
Extensive engagement is needed with consumers so they understand their choices, the related constraints and the costs of those decisions. Another call to action for a joined up approach.
All companies, large and small, have a role in helping meet the ambitious targets of the CCC and Paris Agreement. There is no single, simple solution; it does require a combination of technological innovation, economic incentives and a change in consumer behaviour.
As we think about a low carbon future, we also know that gas too will continue to play a very important role. Around eight out of 10 UK homes use gas for heat today.
It is the most thermally-efficient and therefore the most cost-effective heat source.
While debate continues around fuel sources to heat new-build homes after 2025, the vast majority of existing households will continue to use gas well beyond the life of existing North Sea fields.
It is also clear that the single greatest reduction in global fossil fuel emissions can be brought about by coal-to-gas switching for power generation.
That is why gas is part of the energy transition solution, rather than part of the problem.
If we are to crack this significant challenge, it will be by working together across the entire energy industry. It is not a case of renewables or hydrocarbons; we need both.
Renewables alone cannot solve the problem.
We need back-up generation, new battery technologies, biogas into the grid, cheaper nuclear, better heat pumps, new insulation materials, smart energy devices – and ultimately CCS and hydrogen.
Carbon prices will help encourage some of these new technologies, but innovation and collaboration will be key to delivering at the scale of change required, and certainly at the pace necessary if we are to be able to demonstrate real progress at COP 26 next year.
As I said before, Aberdeen has been a centre for innovation for this industry; where would the sector be were it not for the generations of explorers, inventors and problem-solvers from this part of the world?
Just as in the past it was dubbed the “Oil and Gas Capital of Europe”, it can be at the heart of our industry’s transition to a more collaborative, innovative and lower carbon future.
So, while we celebrate the enormous social and economic benefits our sector has had on many thousands of people’s lives, through better collaboration it can benefit many, many more in the future.
Talk is cheap? It could prove extraordinarily expensive, if not backed up by meaningful, concerted action.
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