Even a year or two ago, climate change and the energy transition would not have featured heavily in an interview between Energy Voice and the chief executive of Oil and Gas UK (OGUK).
Through no fault of the interviewee, emissions would probably have been one of the last subjects covered, and only included if space had to be filled.
Things have changed a lot in the last year. Now, it’s front and centre. The burning issue.
Confronted head-on with its biggest challenge, the UK oil and gas industry needs to work like never before to “earn its future”.
OGUK chief executive Deirdre Michie said there may once have been a time when the sector could take its status for granted.
But the dawn of the new low-carbon era, and the intense scrutiny being directed at oil and gas companies from green activists and shareholders, has blown away that complacency.
The industry is already in action, having launched its ambitious “roadmap” for the next 15 years at Offshore Europe in September.
Its centrepiece is the goal of transforming the UK Continental Shelf into a net zero basin by 2050.
Much of the groundwork must be in place by 2035, and if 2019 was a year of setting out the oil and gas industry’s stall, next year must be one of “delivery”.
Ms Michie said the industry must be prepared to “put itself on the hook” and be “judged” on certain aspects of its track record.
In terms of quick but meaningful wins, Ms Michie said OGUK would highlight the work the industry is doing to measure and tackle emissions from its operations.
“If we cannot point to that, we’re going to be quite challenged,” she said.
Oil and gas companies’ efforts to support low-carbon schemes like carbon capture and storage (CCS) will also be held up as evidence that the industry is serious about the transition.
Ms Michie said: “We are proud of our roadmap and of coming together as an industry.
We were one of first industrial sectors to present a plan for moving forward.
“We are already in action, but need to deliver against that roadmap in terms of staying competitive and showing what we’re doing in a net zero context.
“It’s challenging and the industry needs to earn its future.”
The task of defending the oil and gas industry against those who wish to pin it up as the bad guy seems daunting.
Ms Michie relishes – but doesn’t underestimate – the challenge of “repositioning” the industry in the context of the transition, showing it has a big part to play.
Expanding on OGUK’s role, Ms Michie said the trade body would “raise the bar as an organisation” and engage more effectively across the industry than ever before.
She was encouraged by thousands of interviews that were carried out to help inform the roadmap’s creation.
Ms Michie said: “We’ve touched a nerve, but a positive one. The response has been really good, with people saying ‘we want you to get out there and articulate on behalf of our industry’, ‘we want you to demonstrate that we are in action and here are some examples’, ‘we also want you to challenge the misconceptions and negativity around the industry in a way that perhaps has not been done in the past’.
“So people in this industry are giving us licence to get out there and do that. That’s what we’re going to be doing in 2020.”
Misconceptions about the industry’s societal contribution are a problem, according to Ms Michie, who said a lot of people simply do not know that three-quarters of UK energy demand is met by oil and gas.
Oil and gas will still cover half of demand beyond 2050.
The emissions associated with that energy use have to be offset, but it’s complicated, to say the least.
There’s no silver bullet. Electric vehicles would help, but they can’t be rolled out more widely without sufficient power supply and infrastructure.
“We have to make sure that when we’re being challenged, we do bring the facts and the evidence and try to do it in a way that’s compelling,” Ms Michie said.
“That does press some more of the emotional buttons than we have been able to press previously, but it has to be based on facts and evidence.”
Feedback from those working in oil and gas reinforced a belief that collective action across the whole industry will be required to protect the sector’s licence to operate, Ms Michie said.
It’s difficult to imagine the industry presenting a Greta Thunberg of its own, but it can embolden its entire workforce – from executive level right the way through organisations – to speak up and promote the sector’s virtues.
“Just having one person heading it up isn’t going to do it,” Ms Michie said.
She said OGUK did engage and consult with groups who stridently oppose the oil and gas industry.
There is a lot of agreement between OGUK and environmental activists about the need for action, though there are some differences of opinion about how and when milestones need to be reached.
Ms Michie said: “We have had constructive discussions and had decent feedback we can reflect on.
“That’s how we see ourselves going forward. We have to join up. It is collective action that’s needed. It can’t just be one sector or industry.”
One thing that might help the industry quieten accusations of greenwashing would be to persuade someone from the renewable energy sector to stand up for it and say that the oil and gas industry is serious about changing.
Ms Michie said getting vocal backing from outside oil and gas would be helpful.
At the same time, she feels the renewable energy sector is quite supportive of the oil industry.
“They do appreciate the skills and expertise that we have and they recognise that this industry is needed to support the sustainability of renewables,” she said.
“I do not see it as a competition between oil and gas and renewables. There’s a coming together where we see that skills and expertise need to be shared across the piece. It would be great to reinforce that.”
Ms Michie could showcase some great examples of initiatives being undertaken by operators like Shell, BP, Equinor and Total, who are “all over” low carbon technology and are investigating ways of powering their platforms with renewable energy.
The supply chain also has plenty worth promoting, with companies like Global Energy Group and Wood making a success of diversification.
And then there are the data analysts, Opex Group, for example, who will improve efficiency and reduce carbon footprints.
Winning the public hearts and minds will be important over the coming years, as a report published last month by PwC and OGUK very clearly spelled out.
About 20 senior industry executives were interviewed for the report, and they warned that “changing public attitudes” may shrink pension funds’ appetites for investment.
Ms Michie said the industry had to be competitive and sustainable. The stability of the UK’s fiscal environment, one of its key selling points, also has to be maintained.
She said: “That’s important because we want to attract investment that can go anywhere, globally.
“The supply chain plays an important role in that, because it attracts investors. We have a world-class supply chain and have to be thoughtful about its sustainability.”
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