2019 has been a year where the energy transition has very much come to the fore.
In June 2019 the UK Government legislated for net zero by 2050.
In September, the Scottish Government legislated for net zero by 2045 and ambitious interim targets of 75% reduction in greenhouse gas emissions by 2030.
This is now a key focus not just for operators in oil and gas like Shell, but for the whole of industry.
It means in ten years’ time our homes, our transport, our offices, our assets will need to emit 75% less greenhouse gases than they do today.
Achieving net zero could see us having to double the amount of electricity produced by low carbon sources, compared to what those sources deliver today and by 2035 at the very latest there should be no new internal combustion engine cars sold in the UK.
I believe that the 2019 Committee on Climate Change (CCC) Report is the most important document for our industry in the last decade.
Understanding the CCC recommendations and what they mean for our sector is important and links directly to the Roadmap 2035 which is a blueprint for the oil and gas industry.
It sets out the key themes that need our action – as industry, government and regulator working together – to ensure this sector continues to provide a secure energy supply, supports net zero and remain a vital contributor to the UK economy.
The roadmap is ambitious. It is action orientated, it sets clear targets and it spells out the steps that aim to get us there – including reducing the emissions industry creates through its operations – by developing carbon capture and storage at scale to de-carbonise industrial sectors, and also by using our infrastructure and expertise to develop the hydrogen economy.
As we navigate the transition, the oil and gas industry must also continue to help the UK to meet its energy needs by producing over 1 million barrels of oil equivalent every year by 2035.
In short, for the UK to achieve net zero by 2050 we have to address both our own industry emissions and help society transition to a low carbon future, through providing different products and different energy sources to our customers.
Some believe there is an easy way to get to net zero: that it can be achieved by switching off oil and gas tomorrow without impacting our lives. We know that is not the case but it is true that Society’s expectations of us are demanding and will go on changing.
People want their energy supply to be clean, secure and uninterrupted, to choose where they get their energy from and not to pay a premium for lower carbon sources.
The pace and nature of change will, I am sure, build in the coming years and will be driven in part by essential changes in energy consumer behaviour. Wider Industry, Government and the public will need to work together to drive forward the energy transition and the COP26 climate talks in Glasgow next November will be key.
Oil and Gas is fundamental to the quality of life we enjoy today and it has a role in the future too. Our industry is in action already, investing to drive the energy transition.
We stand ready to support Scotland and the wider UK in accelerating the changes which will allow us to deliver net zero.
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