tag:theconversation.com,2011:/au/topics/north-sea-oil-6273/articlesNorth Sea oil – The Conversation2024-01-31T12:02:07Ztag:theconversation.com,2011:article/2218102024-01-31T12:02:07Z2024-01-31T12:02:07ZOil firms forced to consider full climate effects of new drilling, following landmark Norwegian court ruling<p>Norway’s district court in Oslo recently made a <a href="https://www.greenpeace.org/static/planet4-sweden-stateless/2024/01/daf4fe59-oslo-tingretts-dom-og-kjennelse-18.01.2024-deepl-en.pdf">decision</a> on fossil fuels that deserves the attention of every person concerned about climate change. </p>
<p>This ruling, which compels energy firms to account for the industry’s entire carbon footprint, could change the way oil and gas licenses are awarded in Norway – and inspire similar legal challenges to fossil fuel production in other countries.</p>
<p>The court ruled that three petroleum production licenses, held by energy companies including Equinor and Aker BP, were invalid largely due to the lack of consideration that had been given to so-called “downstream emissions”. That is, emissions from burning the petroleum that these firms would extract from the North Sea (also called scope 3 emissions).</p>
<p>This case is a big win for environmental campaigners who have tried to make oil and gas companies account for the emissions that come from burning their products. Similar efforts have been <a href="https://www.no5.com/media/news/greenpeace-fails-in-attempt-to-challenge-bp-s-vorlich-field/index.html">defeated</a> in legal challenges elsewhere over the last few years.</p>
<p>As a researcher of climate and energy law, I have <a href="https://academic.oup.com/jiel/article/26/4/817/7425562">noted in my work</a> how rules on oil and gas licenses are not aligned with national climate targets. I have called for changing these rules so that the downstream emissions the oil and gas from a new field will produce are considered when deciding whether it should go ahead.</p>
<p>Although the judgment only applies to Norway and its implication should not be overstated, it could seed similar arguments in climate litigation elsewhere. This could force governments to consider how drilling for and burning new oil and gas will really affect climate change.</p>
<p>Oil and gas companies applying for exploration and production licenses in new fields are, in most countries, obliged to produce an environmental impact assessment (EIA) for each proposed project. Firms submit these EIAs to the government and they are usually made public. The idea is that public scrutiny and participation will ensure the government’s final decision is informed and transparent. </p>
<p>In many countries, <a href="https://www.cambridge.org/core/journals/international-and-comparative-law-quarterly/article/abs/climate-assessment-as-an-emerging-obligation-under-customary-international-law/2D0D42C4E488EC511088A30BF3B75429">EIAs must now</a> account for a project’s impact on the climate. But this obligation is typically interpreted as encompassing the emissions from exploration and production only – not from burning the oil and gas extracted. </p>
<p>Despite previous legal challenges and until this recent decision, regulators and courts in oil-producing countries like Norway and the UK have been reluctant to make firms account for the emissions that come from burning the fuels they produce. This is despite the fact these scope 3 or downstream emissions <a href="https://www.wri.org/resources/data-visualizations/upstream-emissions-percentage-overall-lifecycle-emissions">constitute</a> 67%–95% of overall emissions for oil production.</p>
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<span class="caption">Downstream emissions make up most of the oil and gas industry’s carbon footprint.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/different-gas-diesel-pistols-347923826">FXQuadro/Shutterstock</a></span>
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<h2>Why consider downstream emissions?</h2>
<p>Regulators and companies argue that these emissions are not relevant as they do not form a part of the project under consideration. But regulating demand for oil and gas, through higher emission standards for vehicles for example, <a href="https://doi.org/10.1080/14693062.2020.1804315">is not enough</a> to tackle climate change. </p>
<p>Research <a href="https://www.nature.com/articles/nature14016">confirms</a> that keeping global heating below 2°C will require a third of the world’s oil and half of its gas reserves to remain underground by 2050. More recent <a href="https://www.nature.com/articles/s41586-021-03821-8">assessments</a> based on limiting warming to 1.5°C are even stricter. </p>
<p>Plainly, we cannot keep producing fossil fuels while keeping climate targets alive.</p>
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Read more:
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<p>The legal requirements on EIAs in Norway allow room for interpretation, carving a role for courts to clarify if downstream emissions ought to be included. In a 2020 <a href="https://climatecasechart.com/wp-content/uploads/non-us-case-documents/2020/20201222_HR-2020-846-J_judgment.pdf">ruling</a> by the Norwegian Supreme Court, in a case dubbed People v Arctic Oil, the court decided that downstream emissions were a relevant consideration for environmental assessment. </p>
<p>However, the case concerned opening new areas for firms to bid for licenses and the court ruled that such an assessment was not required at that stage. This new decision concerns the government awarding production licenses for specific fields. </p>
<p>At this stage, firms should have a much better understanding of the geology of the field they intend to drill in, how much oil or gas is there and the quantity of downstream emissions it should yield. The court argued that the government’s interpretation of the law to exclude downstream emissions at this stage is too restrictive and downstream emissions must be considered before granting permits.</p>
<h2>Will the decision inspire further legal challenges?</h2>
<p>Despite the clear victory for environmental groups, the practical value of the judgment must be carefully considered. </p>
<p>The judgment will most likely result in an appeal from the Norwegian Ministry of Energy and take months or years to make its way to the country’s Supreme Court for a final decision. While this might delay the drilling, if the government complies with the judgment and requires oil and gas firms to make the necessary downstream emissions assessment it might still proceed with approving new oil production permits – even if the assessment shows considerable downstream emissions.</p>
<p>Will courts in other countries follow suit? Not every country has a written constitution with environmental rights provisions like Norway (the UK doesn’t, for example). But while foreign judgments do not usually serve as precedent, courts often mention applicable decisions in consideration of the relevant facts. </p>
<p>In the UK, a few outstanding cases deal with downstream emissions. For example, environmental campaign groups Greenpeace and Uplift <a href="https://www.greenpeace.org.uk/news/uplift-greenpeace-rosebank-legal-case/">are challenging</a> the government’s approval of the Rosebank oil and gas field west of Shetland, in part due to its lack of consideration of downstream emissions. </p>
<p>The UK Supreme Court is also expected to hand down judgement in the Finch case. This will decide whether it was lawful for Surrey County Council to approve an oil development without requiring an assessment of downstream emissions. </p>
<p>This builds on similar legal challenges in response to new fossil fuel production in <a href="https://climatecasechart.com/non-us-case/gloucester-resources-limited-v-minister-for-planning/">Australia</a> and the <a href="https://climatecasechart.com/case/wildearth-guardians-v-jewell/">US</a>. The outcomes of these cases could change the assessment process for all fossil fuel projects. </p>
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<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p class="fine-print"><em><span>has received funding from Uplift and the Scottish government's Just Transition Fund for research not mentioned in this article.</span></em></p>Precedent set by court in Norway could embolden judges and campaigners further afield.Daria Shapovalova, Senior Lecturer in Energy Law, University of Aberdeen, University of AberdeenLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2055432023-11-06T07:55:05Z2023-11-06T07:55:05ZAbandoned oil rigs could scrape carbon from the sky and store it in empty undersea reservoirs<figure><img src="https://images.theconversation.com/files/554021/original/file-20231016-19-91k6p2.jpg?ixlib=rb-1.1.0&rect=0%2C489%2C5351%2C3073&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">An oil rig graveyard in Cromarty Firth, Scotland.</span> <span class="attribution"><a class="source" href="https://www.pxfuel.com/en/free-photo-qpdew">Pxfuel</a></span></figcaption></figure><p>Keeping control of our planet’s thermostat is proving tricky these days. Temperatures are rising slowly, and inaction is proving costly as we awkwardly lurch towards a cleaner future. </p>
<p>Some industries are proving stubbornly difficult to decarbonise, and we are likely to <a href="https://theconversation.com/global-warming-to-bring-record-hot-year-by-2028-probably-our-first-above-1-5-c-limit-205758">miss the key 1.5°C warming target</a>. One response: big machines that suck CO₂ out of the air, also known as direct air capture.</p>
<p>Stemming from something like a realist science-fiction flick, these literal “skyscrapers” act like massive industrial vacuum cleaners. They strip the CO₂ from the air and store it in a secure location for at least 1,000 years. However, there are various problems with these machines, which is why they may be best suited to oil rigs.</p>
<p>The problems are threefold. Even if they were rolled out at a vastly bigger scale, they are still expensive, noisy and a major eyesore, which means they cannot be built where people live. </p>
<p>Also, for these machines to work at their best, they would ideally be powered by renewable energy which is why wind power has been endorsed by leading scientists as the <a href="https://news.climate.columbia.edu/2022/01/28/offshore-wind-farms-could-help-capture-carbon-from-air-and-store-it/">perfect marriage</a> for direct air capture. </p>
<p>On land, wind turbines the size of high-rise buildings have their critics. But offshore, there are no locals to bother and the turbines can produce more energy as the wind supply is more consistent. </p>
<p>There is also an abundance of sites below the sea where oil and gas has been extracted and where CO₂ can now be stored.</p>
<h2>Make use of abandoned oil rigs</h2>
<p>Placing CO₂ scrubbers on abandoned oil rigs and sending them out to sea would allow us to take advantage of this. It would also provide a way to deal with the dozens of abandoned oil rigs that pose a serious issue for the industry as they are expensive to decommission. The UK’s rigs alone could cost an estimated <a href="https://theconversation.com/why-we-should-leave-old-oil-rigs-in-the-sea-and-why-we-dont-145587">£24 billion</a>. </p>
<p>An <a href="https://www.ospar.org/convention">international convention</a> known as Ospar also dictates that such rigs cannot stay in the sea and must be removed. This conflicts with UK policy on the preservation of marine life since the legs of the rig can act as <a href="https://www.outdooralabama.com/saltwater-fishing/artificial-reefs">artificial reefs</a> creating new <a href="https://theconversation.com/how-offshore-structures-serve-up-a-steady-supply-of-fish-for-seabirds-114891">marine habitats</a>. </p>
<p>Taxpayers money that would be spent on decommissioning could instead be diverted towards retrofitting the big rigs with the ability to suck CO₂ from the air. Pipelines between air scrubbing machines and the carbon storage reservoirs can be prohibitively expensive, but would be cheaper in this scenario as most of the pipes already exist. </p>
<p>The rigs possess the capability to store CO₂ using the on-board equipment that was previously used to extract oil and natural gas, except it would, with <a href="https://newatlas.com/environment/project-greensand-denmark-ccs/">minor modifications</a>, be operated in reverse.</p>
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<a href="https://images.theconversation.com/files/554234/original/file-20231017-15-w5co52.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Annotated map of the North Sea." src="https://images.theconversation.com/files/554234/original/file-20231017-15-w5co52.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/554234/original/file-20231017-15-w5co52.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=831&fit=crop&dpr=1 600w, https://images.theconversation.com/files/554234/original/file-20231017-15-w5co52.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=831&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/554234/original/file-20231017-15-w5co52.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=831&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/554234/original/file-20231017-15-w5co52.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1045&fit=crop&dpr=1 754w, https://images.theconversation.com/files/554234/original/file-20231017-15-w5co52.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1045&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/554234/original/file-20231017-15-w5co52.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1045&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">North Sea oil (green) and gas (red) as of 2005. Some of these reservoirs are now empty and could be filled with captured carbon.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:North_Sea_oil_and_gas_fields.svg">wiki / USGS / Gautier, D.L</a></span>
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<p>For now, the returns would be modest. Based on the amount of carbon these machines would typically capture – about 1 million tonnes of CO₂ a year requires machines covering <a href="https://www.wri.org/insights/direct-air-capture-resource-considerations-and-costs-carbon-removal">half a square kilometre</a> – a large oil rig might capture around 65,000 tonnes of CO₂ a year. </p>
<p>This of course isn’t much on a global scale. The UK alone emits <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1147372/2022_Provisional_emissions_statistics_report.pdf">332 million tonnes</a> annually. But all options are worth trying, and it’s a technology we can expect to improve in coming years.</p>
<p>It may also be possible to extract CO₂ directly from the oceans. Recent research by the <a href="https://news.mit.edu/2023/carbon-dioxide-out-seawater-ocean-decorbonization-0216">Massachusetts Institute of Technology</a> suggests this would actually be far more efficient. Carbon is 100 times more concentrated in seawater than it is in the sky, and this approach could ultimately begin reversing acidification in our oceans.</p>
<p>Rigs that can be moved to other sites on demand would be the perfect candidates, as the same rig could store CO₂ in many different sites under the sea. These sites include empty natural gas reservoirs and underground rivers, and it is this flexibility that could finally resolve the ongoing stalemate between the Ospar convention and the UK government.</p>
<p>The industry is still too small to deliver carbon removal on anything like the required scale. This is due to a lack of investment, and a very minimal market presence. </p>
<p>But, much like how the vaccines for COVID quickly matured due to the absolute necessity of the global pandemic, we now also require a significant mass investment to generate our own market that allows us to remove carbon. The US company Frontier, backed by tech giants, is providing <a href="https://finance.yahoo.com/news/google-facebook-owners-among-tech-093000062.html">US$925 million (£738 million)</a> in order to stimulate such a market into existence. </p>
<p>Unfortunately, even this only represents between <a href="https://nanransohoff.com/A-mental-model-for-combating-climate-change-846be1769d374fa1b5b855407c93da66">0.1% and 1%</a> of the total finances required every year up until 2050. That’s because, even in an optimistic scenario where renewables grow and global emissions are reduced, we’ll still need to remove 10 billion tonnes of carbon to compensate for the fact that industries like steel and cement are notoriously hard to decarbonise.</p>
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<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p class="fine-print"><em><span>Ben Kolosz does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>This could be one reason to leave these rigs in the sea.Ben Kolosz, Lecturer (Assistant Professor) of Renewable Energy and Carbon Removal, University of HullLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2162232023-10-26T16:44:53Z2023-10-26T16:44:53ZElectrifying offshore platforms targets a tiny fraction of the oil industry’s emissions<figure><img src="https://images.theconversation.com/files/556087/original/file-20231026-21-a1ejrj.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4000%2C1868&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/oil-gas-platforms-north-sea-2348824845">David Nixon/Shutterstock</a></span></figcaption></figure><p>We are all familiar with the greenhouse gas emissions that come from burning fossil fuels in car engines, central heating systems and power stations. Little discussed is the climate footprint of producing oil and gas in the first place.</p>
<p>Extracting, refining and distributing oil and gas requires energy. Pumps, compressors, heaters and drilling units treat and move the fuels from many kilometres underground using electricity <a href="https://www.aafintl.com/en-gb/industry/energy/offshore-marine/">typically generated</a> by gas turbines. Clearly, burning gas at offshore production sites will result in local emissions of climate-heating CO₂.</p>
<p>The North Sea Transition Authority (NSTA) regulates the UK’s oil and gas industry and has <a href="https://www.nstauthority.co.uk/news-publications/uk-north-sea-emissions-down-three-years-in-a-row">a remit</a> to reduce the amount of greenhouse gas emissions from UK operations. This does not, however, extend to emissions arising from the subsequent use of that oil and gas.</p>
<p>With what little scope it has to reduce the industry’s emissions, the NSTA is <a href="https://www.offshore-mag.com/renewable-energy/article/14278670/nsta-selects-three-north-sea-platform-electrification-concepts">keen</a> for oil and gas platforms to be electrified. In essence, converting these offshore production sites from running on gas turbines to imported electricity from renewable sources like wind turbines.</p>
<p>Conventional oil production only accounts for <a href="https://carnegieendowment.org/2016/02/09/breaking-down-barrel-tracing-ghg-emissions-through-oil-supply-chain-pub-62722">roughly 5-10%</a> of the emissions associated with the fossil fuel. By far the bulk of these emissions come from when it is used in transport, heating and power generation.</p>
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<img alt="A UK motorway with cars and lorries travelling in one direction." src="https://images.theconversation.com/files/556089/original/file-20231026-29-c6691k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/556089/original/file-20231026-29-c6691k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/556089/original/file-20231026-29-c6691k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/556089/original/file-20231026-29-c6691k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/556089/original/file-20231026-29-c6691k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/556089/original/file-20231026-29-c6691k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/556089/original/file-20231026-29-c6691k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Burning oil and gas for energy emits far more than producing these fuels.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hemel-hempstead-uk-september-27-2021-2049094031">Jarek Kilian/Shutterstock</a></span>
</figcaption>
</figure>
<p>It’s clear that, by pursuing platform electrification, the NSTA is focusing on the wrong emissions source. </p>
<h2>Open heart surgery at sea</h2>
<p>I worked in the oil and gas sector for over 40 years and know from experience that modifying an existing installation can be a risky undertaking. When dealing with equipment that is several decades old, unforeseen issues can emerge.</p>
<p>Shell’s UK chief Steve Phimister has compared the complicated process of converting oil and gas platforms to renewable electricity to <a href="https://www.energyvoice.com/oilandgas/nort/h-sea/278410/electrification-platforms-open-heart-surgery-shell/">open heart surgery</a>. Some oil and gas companies have described electrification as a “<a href="https://www.energyvoice.com/oilandgas/north-sea/538949/new-nsta-electrification-plans-matter-of-huge-concern-for-operators/">huge concern</a>”.</p>
<p>The configuration and location of some of the older installations mean that electrification will prove to be prohibitively expensive. On some installations, access to relevant equipment is limited.</p>
<p>Electrification is being proposed for clusters of platforms so that costs can be shared. For more remote platforms, sharing costs will not be feasible, so not all offshore platforms will be suitable for the switch to renewable electricity. Future North Sea oil and gas production would be a mix of electrified platforms and those which continue to burn gas. </p>
<p>For those offshore platforms that can be electrified, my experience tells me that costs are likely to be in the billions of pounds. Electrification costs are not quantified in the <a href="https://www.nstauthority.co.uk/media/8439/emr-2022-final-v2.pdf">NSTA’s 2022 report</a> on the industry’s emissions – in fact, there is only one mention of cost. </p>
<p>But even without cost and schedule overruns, electrifying a platform does not tackle all of its emissions. According to the NSTA itself, a large portion of the emissions from producing oil and gas will be unaffected by electrification. The authority estimates that around 35% of platform emissions come from activities unrelated to energy generation, mainly flaring and venting gas. </p>
<figure class="align-center ">
<img alt="An offshore oil platform flaring gas." src="https://images.theconversation.com/files/556088/original/file-20231026-26-989w3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/556088/original/file-20231026-26-989w3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/556088/original/file-20231026-26-989w3x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/556088/original/file-20231026-26-989w3x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/556088/original/file-20231026-26-989w3x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/556088/original/file-20231026-26-989w3x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/556088/original/file-20231026-26-989w3x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Gas flaring allows operators to alleviate pressure on equipment.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/areal-photography-oil-gas-platform-taken-698542009">AzmanMD/Shutterstock</a></span>
</figcaption>
</figure>
<p>The NSTA does estimate that an electrification campaign could save 1.2 million tonnes of CO₂ a year. That might sound like a big number, but the UK emits greenhouse gases equivalent to <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1147372/2022_Provisional_emissions_statistics_report.pdf">around 420 million tonnes</a> of CO₂ annually. The climate benefit of the UK oil and gas industry shedding 1.2 million tonnes of CO₂ from its offshore operations amounts to just 0.3% of the country’s yearly emissions.</p>
<h2>Cut fossil fuel use instead</h2>
<p>I believe electrifying offshore oil and gas platforms is a wrong-headed use of taxpayer and industry money and fails to address the wider picture.</p>
<p>The UK would cut far more CO₂ per pound spent if the billions earmarked for offshore electrification were directed at reducing the much larger carbon footprint from fossil fuel use instead. The government could cut these emissions by improving building insulation, building more electric vehicle charging points, investing in wind and solar installations and expanding the electricity grid. </p>
<p>But shifting money from offshore electrification to abating fossil fuel use will not be straightforward. Perhaps the NSTA could agree to let oil and gas firms operate without electrification, provided they can demonstrate they are operating their equipment in such a way as to reduce these emissions to as low as reasonably practical. This would not cut emissions as much as electrification, but it would free up money for more effective decarbonisation elsewhere.</p>
<p>And in this scenario, oil and gas companies would not need to undertake open heart surgery at sea. That sounds like a win-win for everyone.</p>
<hr>
<figure class="align-right ">
<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
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<p class="fine-print"><em><span>Tom Baxter does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The use of fossil fuels carries a much heavier greenhouse gas penalty.Tom Baxter, Honorary Senior Lecturer in Chemical Engineering, University of AberdeenLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2146512023-10-02T15:17:14Z2023-10-02T15:17:14ZRosebank shows the UK’s offshore oil regulator no longer serves the public good<figure><img src="https://images.theconversation.com/files/551200/original/file-20230929-17-xf9jyx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Igor Hotinsky / Shutterstock</span></span></figcaption></figure><p>In a <a href="https://www.nstauthority.co.uk/news-publications/news/2023/consent-granted-for-rosebank-project/">four-line statement</a> announcing the approval of the new Rosebank oil field 80 miles west of Shetland, the UK’s offshore oil and gas regulator showed its mission no longer serves the public good. </p>
<p>The announcement by the North Sea Transition Authority (NSTA), which regulates oil and gas extraction in the waters off the British coast, asserted that net zero considerations had been taken into account – a technical definition that makes it appear long-term oil production is compatible with climate goals. This has outraged and dismayed climate scientists, campaigners, and the many other people concerned about the UK’s faltering climate leadership.</p>
<p>The approval greenlights a process that is expected to produce first oil by 2026, and around 300 million barrels of oil (and a smaller amount of gas) over the next two decades. The project’s developers are Equinor, an oil company owned for the most part by the Norwegian state, and Ithaca Energy, owned by the Delek Group listed on the Tel Aviv stock exchange.</p>
<p>The decision is out of step with demands for rapid action on climate change coming from a range of quarters. This includes shareholder activists demanding corporations accelerate decarbonisation, direct action groups such as <a href="https://juststopoil.org">Just Stop Oil</a>, and financiers concerned about the risks of “asset stranding” as renewables become cheaper than fossil fuels. </p>
<p>Public protests and <a href="https://www.greenpeace.org.uk/news/greenpeace-is-suing-the-uk-government-over-unlawful-oil-and-gas-decision/">legal challenges</a> to the NSTA spotlight the irrationality and recklessness in the government’s expressed support for <a href="https://www.bbc.co.uk/news/uk-scotland-66354478">issuing new licenses</a>. Activists are not alone in making this point. </p>
<p>A welter of scientific studies and reports by <a href="https://www.iea.org/news/the-path-to-limiting-global-warming-to-1-5-c-has-narrowed-but-clean-energy-growth-is-keeping-it-open">international agencies</a> confirm that new fossil fuel extraction is incompatible with keeping global temperature increases well below 2°C.</p>
<p>Rosebank has been a major focus for climate activism in the past couple of years, as <a href="https://www.nature.com/articles/s41586-021-03821-8">science</a>, international policy and campaigners turn their attention to stopping new extraction, rather than solely focusing on reducing emissions. Calls to <a href="https://theconversation.com/keir-starmer-hasnt-really-called-time-on-north-sea-oil-and-gas-heres-why-207091">end new licensing</a> for oil and gas are in line with climate science. </p>
<p>But a <a href="https://theconversation.com/keir-starmer-hasnt-really-called-time-on-north-sea-oil-and-gas-heres-why-207091">climate politics</a> focused on new licensing alone misses the point. The thing is, like other North Sea oil fields yet to be approved, Rosebank was licensed for oil and gas extraction <a href="https://itportal.nstauthority.co.uk/information/licence_reports/offshorebylicence.html">years ago</a>. </p>
<p>The NSTA approval process follows licensing, sometimes after considerable time has passed. And it is this approval process that locks the UK into hydrocarbon production for years to come.</p>
<h2>End ‘maximising economic recovery’</h2>
<p>The core objective of the NSTA is to maximise the economic recovery of UK petroleum – a principle shorthanded as MER – as set out in the 1998 <a href="https://www.legislation.gov.uk/ukpga/1998/17/contents">Petroleum Act</a>. In practice, this means the regulator’s primary mission is to facilitate the extraction of oil and gas. </p>
<p>A revised strategy in 2021 paired MER with an <a href="https://d2e1qxpsswcpgz.cloudfront.net/uploads/2021/12/UKERC_Review-of-Energy-Policy-2021-1.pdf">obligation to support the UK’s net zero commitments</a>. And the former Oil and Gas Authority <a href="https://www.nstauthority.co.uk/news-publications/news/2022/andy-samuel-on-the-oga-becoming-the-north-sea-transition-authority/">changed its name</a> to include an explicit reference to the “transition” in 2022, underpinned by ambitions for emissions reduction and decarbonisation. </p>
<p>NSTA sees its job as effecting the industry’s alignment with these goals. It is <a href="https://www.nstauthority.co.uk/news-publications/news/2023/nsta-expected-to-take-on-role-of-offshore-hydrogen-transport-and-storage-">now also in charge</a> of licensing for carbon capture and storage and offshore hydrogen storage.</p>
<p>Rosebank’s approval therefore reveals a deeper truth: the regulator’s guiding objective fails the public good test. Regulation aims to avoid economic, environmental and social harms, and ensure the <a href="https://doi.org/10.3167/ca.2015.330103">public good</a> through delivering collective benefits and upholding socially-desirable ideals. The Rosebank decision arguably breaches this principle. </p>
<p>Supporters of Rosebank argue it will contribute to the UK’s energy security and deploy decarbonisation technologies that <a href="https://www.equinor.com/energy/rosebank">reduce CO₂ emissions overall</a>. These arguments do not stand scrutiny, however: oil from Rosebank, <a href="https://blog.geographydirections.com/2022/09/26/backing-britain-soaring-energy-prices-and-record-profits-are-driving-global-energy-companies-like-bp-to-wrap-themselves-in-the-national-flag-whats-at-stake-in/">like around 80% of North Sea oil production</a>, will be sold directly into international markets and will not materially affect the price of petrol or diesel for UK motorists. </p>
<p>Much of the value of that oil will flow into the portfolios of Equinor and Ithaca. That value could be harnessed to speed up transition to renewables or ensure its benefits are widely distributed, but that’s largely down to Equinor and Ithaca – not the UK government. </p>
<p>The NSTA asserts that its decision has “<a href="https://www.nstauthority.co.uk/news-publications/news/2023/consent-granted-for-rosebank-project/">tak[en] net zero considerations into account</a>”, yet the sector’s own decarbonisation ambitions count only those emissions associated with <a href="https://ukerc.ac.uk/news/offshore-oil-and-gas-continuity-or-transition/">producing a barrel of oil</a>, and exclude those from burning it (<a href="https://iea.blob.core.windows.net/assets/77ecf96c-5f4b-4d0d-9d93-d81b938217cb/World_Energy_Outlook_2018.pdf">70%-90% of its total impact</a>).</p>
<h2>Rewrite the Petroleum Act</h2>
<p>A decade ago, a decision by NSTA would not have raised much attention. Now it highlights a significant problem in need of reform. Piecemeal adaptation has left MER and other core regulatory principles untouched, which is at odds with the climate emergency. </p>
<p>Existing licensed fields escape the weak scrutiny embodied in instruments such as the <a href="https://www.gov.uk/government/publications/climate-compatibility-checkpoint-design#:%7E:text=The%20climate%20compatibility%20checkpoint%20aims,UK%27s%20climate%20objectives%20is%20evaluated.">climate compatibility checkpoint</a>, a series of tests to be applied in decisions about future licensing rounds. What’s more, as a <a href="https://www.energyvoice.com/oilandgas/north-sea/west-of-shetland/537239/westwood-woodmac-investor-analysts-react-to-rosebank-approval/">litmus test</a> for approval, Rosebank indicates other licensed projects may get the go-ahead, like <a href="https://theconversation.com/why-shell-pulled-out-of-the-cambo-oilfield-173183">Cambo</a>.</p>
<p>Removing NSTA’s central objective to maximise economic recovery requires nothing less than a rewrite of the Petroleum Act. This would be an opportunity to fundamentally revise what the North Sea is for, and whether or how to exploit its resources in the future. A start would be to consider a reversal of direction – a “minimising” of economic recovery, for example – which redefines the “economic” in terms of what is socially necessary.</p>
<p>Such a move will inevitably entail reviewing licences already in place, and will likely generate challenges from the sector and other powerful incumbents. Rosebank exposes, however, how the new mission of the offshore regulator has to be about securing a new public good. This needs wider social debate, and should ultimately be decided through parliament.</p>
<hr>
<figure class="align-right ">
<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
<br><em><a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeTop">Get a weekly roundup in your inbox instead.</a> Every Wednesday, The Conversation’s environment editor writes Imagine, a short email that goes a little deeper into just one climate issue. <a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeBottom">Join the 20,000+ readers who’ve subscribed so far.</a></em></p>
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<p class="fine-print"><em><span>Gisa Weszkalnys receives funding from UKRI, Economic and Social Research Council.</span></em></p><p class="fine-print"><em><span>Gavin Bridge receives funding from UKRI, Economic and Social Research Council.</span></em></p>The regulator’s guiding principle is still to ‘maximise economic recovery’.Gisa Weszkalnys, Associate Professor of Anthropology, London School of Economics and Political ScienceGavin Bridge, Professor of Geography and Fellow of the Durham Energy Institute, Durham UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2080732023-06-21T13:00:59Z2023-06-21T13:00:59ZWhy Labour is right to stop future UK oil and gas development<figure><img src="https://images.theconversation.com/files/533135/original/file-20230621-16-2ik3f9.jpg?ixlib=rb-1.1.0&rect=261%2C629%2C4596%2C2396&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Discarded oil rigs in the Cromarty Firth, Scotland.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cromarty-firth-scotland-oil-rigs-discarded-2021470739">Wayleebird/Shutterstock</a></span></figcaption></figure><p>The Labour Party has <a href="https://labour.org.uk/press/keir-starmer-speech-unveiling-labours-mission-to-cut-bills-create-jobs-and-provide-energy-security-for-britain/">announced</a> that it intends to stop the development of any new oil and gas fields in UK territory if it forms the next government. </p>
<p>The move will have far-reaching consequences, leading to a rapid contraction of the UK’s oil and gas industry over the next decade. So it’s no surprise that much of the reaction from newspapers, businesses and trade unions has been very negative. The current prime minister, Rishi Sunak, has gone so far as to <a href="https://www.bbc.co.uk/news/uk-politics-65839733">call Labour’s proposed policy</a> “bizarre” and the product of “eco-zealots”.</p>
<p>But Labour is currently well ahead in the polls, and with an election due by early 2025, there’s a real possibility that banning further fossil fuel development could become official UK government policy within the next two years. </p>
<p>So, it’s important to know if Sunak is right. Is Labour’s vow to halt new oil and gas fields ill-advised and even “bizarre”?</p>
<p>In fact, according to my calculations, burning all the UK’s existing oil and gas reserves will already produce more than the UK’s fair share of greenhouse gas emissions under the <a href="https://theconversation.com/five-things-you-need-to-know-about-the-paris-climate-deal-52256">2015 Paris Climate Agreement</a> – so suggesting we look for more seems bizarre to me. </p>
<p>It only makes sense if the people making such decisions have no intention of sticking to the UK’s international obligations to tackle climate change.</p>
<h2>Limiting temperature rise</h2>
<p>Under the <a href="https://unfccc.int/process-and-meetings/the-paris-agreement">Paris Agreement</a>, nearly every country in the world is legally obliged to prevent dangerous climate change. Signatories are committed to pursuing efforts to limit global heating to 1.5°C above pre-industrial levels.</p>
<p><a href="https://essd.copernicus.org/articles/15/2295/2023/">Recent estimates</a> suggest that in order to meet this target, we must emit no more than the equivalent of 250 billion tonnes (250 gigatonnes) of CO₂ globally. To put this in context, we’ve <a href="https://ourworldindata.org/co2-emissions">already emitted 1,500 gigatonnes</a> of CO₂ since the industrial revolution, meaning about 86% of all the emissions we can get away with have already been released into the atmosphere.</p>
<p>The consequences of exceeding 1.5°C of global warming will be severe. Temperatures have already risen 1.2°C above pre-industrial times, and at this level of heating, <a href="https://www.ipcc.ch/report/sixth-assessment-report-cycle/">we are seeing</a> increasingly frequent and intense heat, precipitation, droughts, hurricanes and glacier loss. So, even 1.5°C of global warming <a href="https://journals.plos.org/climate/article?id=10.1371/journal.pclm.0000234">may be too much</a>.</p>
<figure class="align-center ">
<img alt="A glacier calving large chunks of ice." src="https://images.theconversation.com/files/533137/original/file-20230621-30-7lslyr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/533137/original/file-20230621-30-7lslyr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/533137/original/file-20230621-30-7lslyr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/533137/original/file-20230621-30-7lslyr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/533137/original/file-20230621-30-7lslyr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/533137/original/file-20230621-30-7lslyr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/533137/original/file-20230621-30-7lslyr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Neko Harbour glacier calving at Andvord Bay, West Antarctica.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/neko-harbor-glacier-calving-andvord-bay-1556725400">Steve Allen/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Emissions from existing reserves</h2>
<p>If the global budget of emissions for keeping temperature rise below 1.5°C is shared equally across the world’s population, then the UK should contribute no more than 2.5 gigatonnes. Yet <a href="https://climate-change.data.gov.uk/articles/emissions-embedded-in-trade-and-impacts-on-climate-change">43% of our emissions are “embedded”</a>, meaning they are produced when the goods we buy are manufactured abroad. Our domestic emissions should therefore be no more than the remaining 57% – that’s just 1.4 gigatonnes.</p>
<p>How does this stack up against the future emissions from the UK’s oil and gas reserves?</p>
<p>The <a href="https://www.nstauthority.co.uk/media/8394/reserves-and-resources-2022.pdf">UK government’s own estimate</a> of reserves (oil and gas remaining in existing fields and likely developments of them) is around 4 billion barrels. A barrel is the oil industry’s rather odd way to measure volume (it equates to about 160 litres). Setting fire to a barrel of oil releases roughly <a href="https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references#:%7E:text=The%20average%20carbon%20dioxide%20coefficient,gallon%20barrel%20(EPA%202022).">430 kg of CO₂</a> into the atmosphere. </p>
<p>Taking this figure into account, 1.7 gigatonnes of CO₂ would be released into the atmosphere if all of the UK’s reserves were extracted and burned. That’s 300,000 tonnes more than the UK’s remaining emissions budget.</p>
<h2>Stop fossil fuel exploration</h2>
<p>The message is clear: in the UK, we cannot safely burn all of the oil and gas reserves we already have. So, it make no sense to invest money and jeopardise our collective futures by developing new fields.</p>
<p>Doing so will result in two unfavourable scenarios. Either we will be left with hydrocarbons that we cannot sell as the world transitions to alternative energy sources, or we will burn it anyway and disregard the climate consequences. </p>
<p>That’s why, in my opinion, it’s “bizarre” to develop new fields. And I’m someone who has spent 40 years working in or with the hydrocarbon exploration industry. Simple arithmetic tells us we have to stop, but it’s arithmetic that many of our political leaders have yet to grasp.</p>
<p>The same is true on a global scale. The world’s oil reserves are still going up because, every year, we find more oil than we use. </p>
<p>The latest estimate of global reserves stands at <a href="https://www.ogj.com/exploration-development/reserves/article/14286688/global-oil-and-gas-reserves-increase-in-2022">1,757 billion barrels</a>. Following the same calculations as before, these reserves would generate the equivalent of 760 gigatonnes of CO₂ when burned. That’s three times the world’s safe emissions limit. </p>
<p>If released, these CO₂ emissions would take global temperatures over 2°C above the pre-industrial level – a clear breach of the Paris agreement.</p>
<figure class="align-center ">
<img alt="Oil truck tankers at an oil refinery." src="https://images.theconversation.com/files/533148/original/file-20230621-24-971h6x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/533148/original/file-20230621-24-971h6x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/533148/original/file-20230621-24-971h6x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/533148/original/file-20230621-24-971h6x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/533148/original/file-20230621-24-971h6x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/533148/original/file-20230621-24-971h6x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/533148/original/file-20230621-24-971h6x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The world’s oil reserves are still going up.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/oil-truck-tankers-refinery-background-evening-442808020">Huang Yi Fei/Shutterstock</a></span>
</figcaption>
</figure>
<p>I’m not the first person to point this out. In fact, the International Energy Agency (a multi-government organisation set up in 1974 to promote the security of oil supplies) <a href="https://iea.blob.core.windows.net/assets/7ebafc81-74ed-412b-9c60-5cc32c8396e4/NetZeroby2050-ARoadmapfortheGlobalEnergySector-SummaryforPolicyMakers_CORR.pdf">stated last year</a> that “there is no need for investment in new fossil fuel supply in our net zero pathway”. </p>
<p>If the International Energy Agency says we should stop developing new fields, then perhaps we should listen. <a href="https://beyondoilandgasalliance.org/who-we-are/">Several nations</a>, including Denmark, Ireland, France and Costa Rica, paid attention and have announced they will discourage continued investment in increasing the production of oil and natural gas. It’s time the UK joined them. </p>
<hr>
<figure class="align-right ">
<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
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<p class="fine-print"><em><span>David Waltham receives funding from Shell. He is affiliated with the Citizens' Climate Lobby. He is also Director of the Centre for Energy and Resources at Royal Holloway, University of London.</span></em></p>Keir Starmer pledges to end new UK oil and gas exploration – an expert’s take on why this is the right move.David Waltham, Professor of Geophysics, Royal Holloway University of LondonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2070912023-06-07T15:01:40Z2023-06-07T15:01:40ZKeir Starmer hasn’t really called time on North Sea oil and gas – here’s why<p>Keir Starmer <a href="https://www.theguardian.com/politics/2023/may/28/labour-confirms-plans-to-block-all-new-north-sea-oil-and-gas-projects">recently announced</a> that the UK will grant no new licenses for oil and gas firms to drill in the North Sea if Labour wins the next election. </p>
<p>It’s a decision that would terminate the UK’s 60-year policy of offering up new areas of the North Sea for <a href="https://ukerc.ac.uk/news/offshore-oil-and-gas-continuity-or-transition/">fossil fuel extraction</a>. The Labour party has promised to clarify its energy policy <a href="https://www.theguardian.com/politics/2023/may/28/labour-confirms-plans-to-block-all-new-north-sea-oil-and-gas-projects">later this month</a>.</p>
<p>The plan has been criticised, for different reasons, by <a href="https://www.heraldscotland.com/business_hq/23567095.aberdeen-jobs-fears-labour-plans-north-sea-oil-ban/">oil industry figures</a>, <a href="https://www.theguardian.com/politics/2023/jun/04/labour-plans-to-ban-north-sea-oil-production-naive-says-union-leader">union officials</a> and <a href="https://www.scottishdailyexpress.co.uk/news/politics/fury-labours-extraordinary-reckless-pledge-30097120">politicians</a>. But how consequential is it?</p>
<p>Labour’s challenge to the offshore industry is part of a broader public debate in the UK about what a desirable future looks like with a worsening climate emergency and after half a century of domestic extraction.</p>
<p>Longstanding principles of offshore oil and gas policy – such as <a href="https://www.nstauthority.co.uk/media/1022/mer_uk_strategy.pdf">maximising the recovery</a> of hydrocarbon fuels which it is cost-effective to pump – are being <a href="http://climatecasechart.com/non-us-case/greenpeace-v-north-sea-transition-authority/">challenged in court</a>. Opposition parties and trade unions demanded oil and gas companies pay a <a href="https://www.theguardian.com/business/2023/feb/02/shell-profits-2022-surging-oil-prices-gas-ukraine">windfall tax</a> while consumers are saddled with high energy prices. </p>
<p>The independent <a href="https://www.theccc.org.uk/publication/letter-climate-compatibility-of-new-oil-and-gas-fields/">Climate Change Committee</a>, which advises the UK government on meeting its emissions targets, supports the end of oil and gas exploration – and the Scottish government has embedded a similar position in its <a href="https://www.gov.scot/publications/draft-energy-strategy-transition-plan/pages/5/">draft energy strategy</a>.</p>
<p>Denmark, France and Ireland have already <a href="https://www.euronews.com/green/2021/08/12/the-end-of-fossil-fuels-which-countries-have-banned-exploration-and-extraction">declared a halt</a> to licensing and <a href="https://beyondoilandgasalliance.org/">pledged</a> a managed phase-out of oil and gas production. The International Energy Agency <a href="https://www.iea.org/reports/net-zero-by-2050">found that</a> no new oil and gas fields (beyond those already approved for development) are required to meet demand under a scenario in which the world reaches net zero emissions by 2050.</p>
<p>Evidence of the <a href="https://www.nature.com/articles/s41586-021-03821-8">need for rapid cuts</a> to the amount of fossil fuels being extracted and burned is mounting. There is even a financial case for it, as fossil fuels and the infrastructure that produces them risk becoming massively overvalued <a href="https://carbontracker.org/terms/stranded-assets/">stranded assets</a> as demand falls in the transition to a low-carbon economy.</p>
<p>Labour’s reported position on licensing, then, is not a bolt from the blue. Starmer said in January, while on a panel at the World Economic Forum in Davos, that oil and gas would play its part during that transition – “but not new investment, <a href="https://www.reuters.com/business/energy/davos-2023-starmer-says-no-new-uk-oil-gas-investment-under-labour-government-2023-01-19/">not new fields up in the North Sea</a>, because we need to go towards net zero, we need to ensure that renewable energy is where we go next”.</p>
<h2>What’s in the pipeline?</h2>
<p>Labour’s plan would draw new licensing to a close, but it <a href="https://www.thetimes.co.uk/article/stand-back-from-cliff-edge-on-oil-and-gas-policy-keir-starmer-urged-7s0kqcx28">would not end</a> oil and gas production. There have been 33 licensing rounds since the mid-1960s, the primary means by which oil and gas companies gain access to the seabed on the UK’s continental shelf. The most recent opened in October 2022 and its outcomes have yet to be declared. </p>
<p>Large reserves of oil and gas are already covered by existing licenses and await decisions by the companies who hold them on whether to develop them. A Labour spokesperson has <a href="https://www.heraldscotland.com/politics/23554333.scottish-labour-back-starmers-oil-gas-ban-despite-union-concern/">clarified</a> that it would not touch this substantial pipeline of projects, and that “existing licences will continue and using existing wells sensibly is baked into our plans”. </p>
<p>For anyone concerned about climate change, this is a major problem. Pressure from <a href="https://action.greenpeace.org.uk/stop-new-fields">Greenpeace</a> and <a href="https://upliftuk.org/">allied climate campaigners</a> is building on the regulator, the North Sea Transition Authority (NSTA), to withhold consent – especially for large-scale projects such as Rosebank and <a href="https://theconversation.com/why-shell-pulled-out-of-the-cambo-oilfield-173183">Cambo</a>. From the Scottish government’s perspective, declining production in the North Sea offers a <a href="https://www.gov.scot/publications/scotlands-energy-strategy-transition-plan-ministerial-statement/">glide path for a “just transition”</a> from a fossil fuel economy.</p>
<h2>Will Sunak go for broke?</h2>
<p>The immediate question is whether the government will seek to drive a big licence giveaway to lock in as many new fields as possible before a future Labour government ends licensing.</p>
<p>It’s possible. The UK prime minister, Rishi Sunak, has described the idea that the UK will not develop further offshore oil and gas fields as “<a href="https://www.scotsman.com/news/politics/rishi-sunak-hints-at-go-ahead-for-controversial-rosebank-oil-field-4137866">economically illiterate</a>”. When the current 33rd licensing round opened in October, Liz Truss called for 100 licenses to be made available and <a href="https://www.nstauthority.co.uk/news-publications/news/2023/33rd-round-attracts-115-bids-across-258-blocks-or-part-blocks/">115 bids were received from 76 companies</a>. The NSTA is expected to announce very soon what licences will be awarded. </p>
<p>It’s worth noting that the licences on offer are in what the NSTA calls technically mature but undeveloped <a href="https://www.nstauthority.co.uk/news-publications/news/2022/nsta-launches-33rd-offshore-oil-and-gas-licensing-round/">cluster areas</a>. That is, areas which have known reserves, are close to drilling platforms, but which are not currently pumping any oil and gas. These sites were selected to enable expedited production, particularly of gas. </p>
<p>Changing licensing structures to suit company needs and encourage development could be another possibility. <a href="https://www.nstauthority.co.uk/licensing-consents/types-of-licence/">NSTA has done so in the past</a>. But any such measures are bound to come under scrutiny.</p>
<p>Scheduling a further licensing round before the general election seems unlikely. The <a href="https://www.energyvoice.com/oilandgas/north-sea/505453/north-sea-licensing/?utm_source=Sailthru&utm_medium=email&utm_campaign=Energy%2520Voice%2520-%2520Newsletter%2520AB%2520Test%2520%255BB%255D%25202023-06-05&utm_term=Energy%2520Voice%2520-%2520Newsletter">process is protracted</a> and absorbs substantial resources at the NSTA, which is also managing a <a href="https://www.nstauthority.co.uk/licensing-consents/licensing-rounds/carbon-storage-licensing-rounds/#tabs">new licensing programme for carbon storage</a>. </p>
<h2>What if Labour wins?</h2>
<p>The more interesting question is what an NSTA under Labour could look like. </p>
<p>Established in 2015, NSTA (previously called the Oil and Gas Authority) was deliberately conceived as a different kind of regulator – one with the expertise and powers necessary to stand up to the oil majors but, at the same time, a co-creator of value working closely with industry and government. This was partly enabled by setting it up as a <a href="https://www.nstauthority.co.uk/news-publications/news/2016/new-chapter-for-the-oga-as-government-company/">company</a> fully owned by the government. Starmer winning the 2024 general election would place the NSTA under the control of a Labour government for the first time. </p>
<p>At the core of NSTA’s work is an obligation to achieve the greatest possible net economic value from oil and gas extracted in the North Sea. This is an objective also embedded in the <a href="https://www.legislation.gov.uk/ukpga/1998/17/contents">1998 Petroleum Act</a>, which has now been paired with an effort to <a href="https://www.nstauthority.co.uk/media/6980/annex-2-the-oga-strategy.pdf">support the country’s net zero committment</a>. </p>
<p>At the moment, meeting net zero emissions from North Sea oil and gas primarily means reducing direct and indirect operating emissions (scope 1 and scope 2), for example, by <a href="https://www.nstauthority.co.uk/the-move-to-net-zero/platform-electrification/">running drilling platforms</a> on electricity from renewables, such as offshore wind, and reducing gas flaring and venting, as well as investing in carbon capture, use and storage. </p>
<p>Significantly, it leaves scope 3 (supply chain and customer use of products) and the underlying objective to maximise the economic recovery of oil and gas untouched. Scope 3 emissions account for roughly <a href="https://iea.blob.core.windows.net/assets/77ecf96c-5f4b-4d0d-9d93-d81b938217cb/World_Energy_Outlook_2018.pdf">70% to 90%</a> of the total emissions from extracting, refining and consuming oil products and 60 to 85% of those from fossil gas.</p>
<p>Labour putting the climate at the heart of a new UK North Sea policy would imply a fundamental reimagining of existing regulatory obligations. NSTA already has the power to revoke licences if licensees do not meet regulatory requirements, although this is not often used (<a href="https://www.energyvoice.com/oilandgas/north-sea/decom/502441/nsta-first-as-regulator-partially-revokes-brae-area-licence-after-fujairah-decom-default/">first time in May 2023</a> when a company defaulted on its share of decommissioning costs). </p>
<p>Removing the maximum economic recovery obligation from NSTA would probably require rewriting or unmaking the Petroleum Act. This is a step more profound and more laborious than the pragmatic decision to stop licensing. But it is one that could open up a more extensive public deliberation on the future of the North Sea.</p>
<hr>
<figure class="align-right ">
<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p class="fine-print"><em><span>Gavin Bridge receives funding from the UK Economic and Social Research Council. </span></em></p><p class="fine-print"><em><span>Gisa Weszkalnys receives funding from ESRC. </span></em></p>Labour would still honour existing licenses to drill for fossil fuels.Gavin Bridge, Professor of Geography and Fellow of the Durham Energy Institute, Durham UniversityGisa Weszkalnys, Associate Professor of Anthropology, London School of Economics and Political ScienceLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2029762023-03-30T15:25:50Z2023-03-30T15:25:50ZWhy a serious climate strategy is almost impossible in the UK’s current political system<figure><img src="https://images.theconversation.com/files/518497/original/file-20230330-1194-9knsyk.jpg?ixlib=rb-1.1.0&rect=57%2C19%2C4186%2C1730&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">In its new energy strategy, the government says it "remains absolutely committed to maximising the vital production of North Sea oil and gas as the North Sea basin declines".</span> <span class="attribution"><span class="source">donvictorio / shutterstock</span></span></figcaption></figure><p>The UK government <a href="https://www.theguardian.com/environment/2023/mar/24/uk-government-launch-revamped-net-zero-strategy-oil-gas-capital-aberdeen">reportedly</a> chose Aberdeen, its carbonisation capital, as the original location to relaunch its de-carbonisation strategy. The strategy, <a href="https://www.gov.uk/government/publications/powering-up-britain">now published</a>, has been <a href="https://www.theguardian.com/business/2023/mar/30/half-baked-half-hearted-critics-ridicule-uk-long-awaited-climate-strategy">strongly criticised</a> by environmentalists. Part of the plan to transition the country away from oil and gas is to allow highly subsidised, mostly foreign-owned companies to extract more oil and gas from these islands and sell it overseas to the highest bidder, thereby improving the UK’s national energy security. This is barely a week after climate scientists gave their starkest, <a href="https://www.ipcc.ch/report/ar6/syr/">final warning</a> to keep fossil fuels in the ground or risk catastrophic, civilisation-threatening levels of global overheating.</p>
<p>If your response to “energy security day” is to ask yourself: how on Earth can our leaders offer this as an adequate plan? After all the flooding, wildfires, heatwaves and storms; after all the scientific reports; after David Attenborough’s Climate: The Facts; after Extinction Rebellion and Greta Thunberg and the millions of young people who refused to go to school; and <a href="https://www.ons.gov.uk/peoplepopulationandcommunity/wellbeing/articles/worriesaboutclimatechangegreatbritain/septembertooctober2022">poll</a> after <a href="https://www.ipsos.com/en-uk/8-10-britons-concerned-about-climate-change-half-think-net-zero-target-should-be-brought-forward">poll</a> showing how concerned we now are; how we want our government to go much further and faster on climate policy. Do they really think we will swallow this Orwellian doublethink – hold two contradictory beliefs in our minds simultaneously, and accept them both? Are we really going to put up with this?</p>
<p>According to my <a href="https://openresearch.surrey.ac.uk/esploro/outputs/doctoral/99705866502346">doctoral research</a> at the University of Surrey, the answer to these questions, unfortunately, is yes. Until the elements of UK civil society and polity who advocate accelerating action for a rapid transition become a much more effective, collaborative, strategic and coherent coalition, most of us probably will accept the doublethink and put up with it. To understand why, you first need to understand the “ecosystem” of UK climate actors and coalitions.</p>
<p>One key insight of this research, which relied on analysing the views of 100 experts from a wide cross-section of society, is that the decarbonisation transition needs to be both politically and ecologically viable, but a configuration of actors and narratives that combines these two necessary conditions into an effective force for change does not yet exist. </p>
<h2>Politically but not ecologically viable</h2>
<p>There is a large, dominant, politically viable coalition – I call it the “green growth” coalition – which consists of the government, the main political parties, the business and finance sectors, the mainstream media, and most civil society NGOs. It is politically viable because it enjoys a broad cross section of support, is relatively unified, and communicates a familiar, coherent, consistent, “win-win” narrative: private wealth and public health and wellbeing go together, and you need a viable, growing economy to pay for public goods. </p>
<p>This coalition also conforms to the global financial system and its deeply embedded addiction to GDP growth. No single politician, political party or national government acting alone is likely to survive a campaign pledge that doesn’t prioritise economic growth.</p>
<p>However, the green growth coalition is ecologically unviable. The internationally agreed safety limit of +1.5O°C of global overheating will almost certainly be breached by the 2030s. If we factor in our greater historical responsibilities and financial capabilities to make things fairer for newly industrialised and less wealthy countries, then developed nations like the UK should be reaching <a href="https://theconversation.com/ipccs-conservative-nature-masks-true-scale-of-action-needed-to-avert-catastrophic-climate-change-202287">zero emissions by the mid-2030s</a>. </p>
<p>The government’s net zero by 2050 transition is therefore far too slow and increases the risk of <a href="https://www.theguardian.com/environment/2022/sep/08/world-on-brink-five-climate-tipping-points-study-finds">tipping Earth systems</a> beyond critical thresholds. 2050 is based not on ecological necessity but on least-cost optimisation and a belief that existing power relations and “<a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1028157/net-zero-strategy.pdf">the grain of existing behaviour and trends</a>” must be maintained. It also relies on “exporting” emissions to other countries and on speculative carbon removal technologies.</p>
<h2>Ecologically but not yet politically viable</h2>
<p>Two further coalitions – which I label “limits” (consisting of The Green Party, Greenpeace, and various more radical thinktanks, NGOs and campaigners) and “revolution” (Extinction Rebellion and similar non-violent direct-action groups) – are ecologically viable. They respect the overriding importance of the Earth’s biophysical capacities (<a href="https://www.stockholmresilience.org/research/planetary-boundaries/the-nine-planetary-boundaries.html">planetary boundaries</a>). However, they are (currently) politically unviable, being composed of fragmented groups of more radical actors with marginal influence, few resources and no support at all in key sectors. They also face well-resourced, skilled, incumbent opposition with the backing of all the major media.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/518492/original/file-20230330-22-psfhzj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="people with XR flags on a protest in London" src="https://images.theconversation.com/files/518492/original/file-20230330-22-psfhzj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/518492/original/file-20230330-22-psfhzj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/518492/original/file-20230330-22-psfhzj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/518492/original/file-20230330-22-psfhzj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/518492/original/file-20230330-22-psfhzj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/518492/original/file-20230330-22-psfhzj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/518492/original/file-20230330-22-psfhzj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Extinction Rebellion: limited influence and powerful enemies.</span>
<span class="attribution"><span class="source">Joe Kuis / shutterstock</span></span>
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</figure>
<h2>Concerned, but not yet persuaded</h2>
<p>A rapid transition to net zero carbon by 2035 for the UK may be an ecological and humanitarian necessity. But despite record levels of concern, the UK public and key sectors are not yet persuaded. In addition, we have our own doublethink issues to contend with. We want better public transport and clean air. And we want to keep our cars and our cheap flights and to pay less in taxes. We want the government to take the lead. And we don’t trust them to manage the rubbish collection let alone a just transition to a new economy. </p>
<p>If we want to take back control and have real energy security – based on renewable energy, properly insulated buildings, the right to generate and sell our own renewable electricity, free public transport funded by a tax on frequent flyers – we’re going to have to break the “<a href="https://bristoluniversitypress.co.uk/too-hot-to-handle">silent stand-off</a>” that leads politicians and the public to assume that the other party doesn’t really care about the climate or surely they would be doing more about it. We need a proper national conversation about the kind of society we want to live in, and the real risks and difficult trade-offs we face in the years ahead, so that rapid transition or incremental change becomes a <a href="https://carnegieeurope.eu/2020/11/05/getting-climate-citizens-assemblies-right-pub-83133">conscious choice</a>.</p>
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<figure class="align-right ">
<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
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<p class="fine-print"><em><span>Steven R. Smith is also Tipping Points Research Impact Fellow at the Global Systems Institute, University of Exeter.</span></em></p>The country is missing a strong and strategic coalition of pro-climate interest groups, says research.Steven R. Smith, Visiting Research Fellow, Centre for the Understanding of Sustainable Prosperity (CUSP), University of SurreyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2029722023-03-30T15:16:01Z2023-03-30T15:16:01ZDoes carbon capture and storage hype delay emissions cuts? Here’s what research shows<figure><img src="https://images.theconversation.com/files/518472/original/file-20230330-190-qrnb80.jpg?ixlib=rb-1.1.0&rect=1094%2C1321%2C4940%2C2687&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/drax-coal-fired-power-station-selby-552746056">Daniel Heighton/Shutterstock</a></span></figcaption></figure><p>Is carbon dioxide capture and storage (CCS) an important tool for slowing climate change, or merely a way to justify the continued extraction and burning of fossil fuels? I’m a social scientist who studies the politics of environmental technology and I have given this question a lot of thought.</p>
<p>CCS is a technology that can separate out carbon dioxide (CO₂) from industrial facilities, like a coal-fired power plant or a cement factory, and sequester the CO₂ underground so as to keep it out of the atmosphere.</p>
<p>The technology works and has been demonstrated to <a href="https://theconversation.com/how-world-leaders-hope-to-reach-net-zero-emissions-by-2050-and-why-some-experts-are-worried-climate-fight-podcast-part-2-169555">some effect</a> on industrial plants. CO₂ storage underground has been demonstrated in Norway <a href="https://www.earthdoc.org/content/journals/0.3997/1365-2397.26.1115.27807">since the 1990s</a>. A lot of energy and water is used to do this and there is <a href="https://theconversation.com/how-soon-could-carbon-capture-technology-solve-industry-co-shortages-168310">no market</a> for the stored CO₂ in the UK. This means CCS will not be commercially viable without policies such as a legal mandate for companies to use it.</p>
<p>The UK government’s climate policy is defined by the concept of “net zero”. This entails phasing out emissions and scaling up methods of removing CO₂ from the atmosphere to reach a point where sources and sinks of the gas are balanced. Some emissions, such as those from steelmaking, are often expected to be hard to eliminate in the time left to avert catastrophic warming. Governments propose compensating for these by using carbon removal technologies, where CCS is used to capture CO₂ from burning or processing biomass or to extract CO₂ <a href="https://theconversation.com/direct-air-capture-how-advanced-is-technology-to-suck-up-carbon-dioxide-and-could-it-slow-climate-change-189260">directly from the air</a>.</p>
<p>A <a href="https://www.theguardian.com/environment/2022/jul/18/court-orders-uk-government-to-explain-how-net-zero-policies-will-reach-targets">high court ruling</a> in 2022 ordered the government to outline how its policies will meet the legally binding target of reaching net zero by 2050. The government has now released its <a href="https://www.gov.uk/government/publications/powering-up-britain">revised plans</a> which will include storing CO₂ below the North Sea using new carbon capture sites in Teesside, funded with £20 billion (US$24.7 billion) over 20 years. The government may also license a large new oilfield in the North Sea called Rosebank.</p>
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<img alt="An industrial scene with chimneys and storage tanks." src="https://images.theconversation.com/files/518480/original/file-20230330-26-zqm4xv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/518480/original/file-20230330-26-zqm4xv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=325&fit=crop&dpr=1 600w, https://images.theconversation.com/files/518480/original/file-20230330-26-zqm4xv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=325&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/518480/original/file-20230330-26-zqm4xv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=325&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/518480/original/file-20230330-26-zqm4xv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=408&fit=crop&dpr=1 754w, https://images.theconversation.com/files/518480/original/file-20230330-26-zqm4xv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=408&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/518480/original/file-20230330-26-zqm4xv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=408&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An oil refinery in Hampshire, England.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/early-morning-light-over-oil-refinery-1335205391">Tony Mills/Shutterstock</a></span>
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<p>Is this an example of CCS being used to delay real cuts in emissions as some have <a href="https://www.theguardian.com/environment/2023/mar/30/government-gambles-on-carbon-capture-and-storage-tech-despite-scientists-doubts">alleged</a>? A recent <a href="https://wires.onlinelibrary.wiley.com/doi/10.1002/wcc.826">paper</a> published by myself and fellow researchers offers some insight by reviewing decades of research on the topic of delay caused by carbon removal technologies.</p>
<h2>What do studies say?</h2>
<p>So far, critics seem to have a point. CCS has been very slow to get off the ground and successive UK governments have botched attempts to demonstrate the technology at scale.</p>
<p>Our research traced the debate back to the 1990s when economists first modelled how emissions reductions might be substituted with carbon removal technology to reveal the cheapest way to decarbonise. This aroused interest in carbon removal (and solar radiation management, which involves bouncing the sun’s energy back to space) technology, but the results were controversial as even then climate scientists were wary that they could replace vital cuts to emissions.</p>
<p>The problem of whether carbon removal actually deters or delays emission reductions has been conceptualised and studied in multiple ways by academics. Few deny the risk altogether, but conclusions vary as to how serious it is.</p>
<p>Some studies look at integrated assessment models – complex computer models of the climate system which use economics to describe how emissions might change depending on the technologies used to handle them. These studies tend to find that introducing the option of carbon removal into projections of how countries can decarbonise does indeed substitute emissions reductions to some extent. Authors disagree on how relevant these findings are to what happens in the real world. But we know from other studies about the performative effects of modelling studies: their findings tend to shape policy, and so real-world outcomes, meaning results showing substitution effects should not be dismissed.</p>
<p>A large number of studies assess the allure of carbon removal on individuals by, for example, asking policy makers or members of the public about the kinds of decision they would make or would like to see made. These studies are among the most sceptical about the risk of carbon removal acting as a deterrent to cutting emissions, with some even suggesting an opposite effect.</p>
<h2>Political economy matters</h2>
<p>In our review, we argued that it is in these cases where the relevance of experimental results for real-world outcomes must be taken with a pinch of salt. These methodologies tend to assume that individual preferences are what matters in shaping climate policy, and that rational calculations by people concerned with finding the most efficient solution to a problem determine what decisions are made. We argue that any number of social, cultural, political and economic processes make the world much messier than that.</p>
<p>Structural accounts of the role of carbon removal aim to take such processes into account. These studies tend to find stronger support for carbon removal delaying and deterring emissions reductions by considering the context created by political economy – that is, the influence of powerful economic interests on political systems and government policy. Most of these studies are, to date, highly theoretical, and more empirical assessments are needed, including case studies which analyse the processes governing the creation of particular policies.</p>
<p>While the new government plan was billed as an “energy security strategy”, it contains no significant proposals to insulate leaky houses, which experts have <a href="https://theconversation.com/energy-discounts-are-a-sticking-plaster-heres-a-long-term-solution-to-soaring-household-bills-176402">consistently argued</a> would reduce demand for foreign sources of energy, cut household emissions and alleviate bills. This would have been a reasonable priority during a so-called cost-of-living crisis. But home insulation does nothing to shield the profits of fossil fuel companies or landlords in the <a href="https://theconversation.com/how-the-private-rental-sector-created-a-homelessness-crisis-in-ireland-and-england-201734">large and growing</a> private rental sector.</p>
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<img alt="An aerial view of rows of terraced housing." src="https://images.theconversation.com/files/518489/original/file-20230330-1159-2psjf4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/518489/original/file-20230330-1159-2psjf4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/518489/original/file-20230330-1159-2psjf4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/518489/original/file-20230330-1159-2psjf4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/518489/original/file-20230330-1159-2psjf4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=502&fit=crop&dpr=1 754w, https://images.theconversation.com/files/518489/original/file-20230330-1159-2psjf4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=502&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/518489/original/file-20230330-1159-2psjf4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=502&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The UK has some of the least insulated housing in Europe.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/aerial-view-old-terraced-houses-on-2217577647">Clare Louise Jackson/Shutterstock</a></span>
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<p>When the political economy in which climate policy making happens is considered, the repeated role of CCS, be it on fossil fuelled plants or in carbon removal, is revealed: a handy excuse to delay reform and protect the profitability of powerful sectors of the economy.</p>
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<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
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<p class="fine-print"><em><span>Nils Markusson receives funding from the Swedish Research Council for Sustainable Development (FORMAS). The paper was co-authored with Inge-Merete Hougaard, Wim Carton and Jens Friis Lund.</span></em></p>CCS remains a ‘handy excuse’ for extracting more fossil fuels, our review indicates.Nils Markusson, Lecturer in Environmental Politics, Lancaster UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1902802022-09-09T14:27:50Z2022-09-09T14:27:50ZWhat Liz Truss’s government means for climate action<figure><img src="https://images.theconversation.com/files/483691/original/file-20220909-7256-ooc4dy.jpg?ixlib=rb-1.1.0&rect=975%2C860%2C4532%2C3375&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The new prime minister Liz Truss has announced plans to reverse the fracking ban and drill for more North Sea gas.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/uk-foreign-secretary-liz-truss-holds-2184533585">Clicksbox/Shutterstock</a></span></figcaption></figure><p>Ever since climate change appeared on the political agenda, there has been general agreement on the need for a robust response. While the implementation of climate policy has lagged over the past decade, that basic consensus has held. Liz Truss’s new government puts that under serious strain.</p>
<p>There are a number of components to worry about. First of all, the job of coordinating climate policy has gone to <a href="https://www.desmog.com/jacob-rees-mogg/">Jacob Rees-Mogg</a>, a man with a history of climate denial who continues to decry “climate alarmism”. He is open in his hostility towards the pursuit of net zero and brazen in his support for fossil fuels.</p>
<p>Various other members of the new government also actively oppose ambitious climate policy. Steve Baker, a critic of the government’s net-zero strategy and founder of the <a href="https://www.desmog.com/net-zero-scrutiny-group/">Net Zero Scrutiny Group</a>, which works to undermine climate action, is now a cabinet minister. Two of Truss’s <a href="https://www.theguardian.com/politics/2022/sep/07/liz-trusss-chief-of-staff-brings-key-figures-from-lobbying-firm-into-no-10">key advisers</a> also have blemished climate records.</p>
<p>The prime minister herself has <a href="https://www.desmog.com/2022/09/05/analysis-new-uk-prime-minister-liz-trusss-links-to-climate-science-denial/">extensive connections</a> to organisations opposing climate action. She is also a vocal advocate for the role of gas as a transition fuel. </p>
<p>Truss is more ideological than her predecessor. Boris Johnson’s opportunism often <a href="https://www.gov.uk/government/publications/the-ten-point-plan-for-a-green-industrial-revolution">created openings</a> for climate action that served other elements of his agenda. His support for wind turbine manufacturing in red wall seats is evidence of this. Driven by an ideological commitment to “free markets”, Truss is less likely to take such an approach. </p>
<p>There are some appointments that offer optimism. The new junior minister for climate change, Graham Stuart, has <a href="https://www.endsreport.com/article/1798233/graham-stuart-new-climate-minister">consistently pushed for renewables</a>. While the former climate minister, Chris Skidmore, has been appointed to <a href="https://www.theguardian.com/politics/2022/sep/08/liz-truss-appoints-green-tory-chris-skidmore-to-lead-net-zero-review">lead a review</a> of the UK’s net zero strategy.</p>
<p>However, the decision to select a loyal cabinet with questionable environmental credentials indicates a sharp shift away from previous commitments to climate action.</p>
<h2>Fossil-fuelled response to the energy crisis</h2>
<figure class="align-center ">
<img alt="An offshore oil rig with a flare emerging from one of its chimneys." src="https://images.theconversation.com/files/483696/original/file-20220909-23-1qd39x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/483696/original/file-20220909-23-1qd39x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=397&fit=crop&dpr=1 600w, https://images.theconversation.com/files/483696/original/file-20220909-23-1qd39x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=397&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/483696/original/file-20220909-23-1qd39x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=397&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/483696/original/file-20220909-23-1qd39x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=499&fit=crop&dpr=1 754w, https://images.theconversation.com/files/483696/original/file-20220909-23-1qd39x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=499&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/483696/original/file-20220909-23-1qd39x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=499&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The new government’s response to the energy crisis so far has been to increase fossil fuel supply.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/flare-boom-on-offshore-oil-rig-432473">Ingvar Tjostheim/Shutterstock</a></span>
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</figure>
<p>The new government’s response to the energy crisis reflects this. So far, the focus has been on expanding fossil fuel supply. Up to <a href="https://www.reuters.com/business/energy/exclusive-uk-announce-dozens-new-north-sea-oil-gas-licences-sources-2022-09-07/">130 new licences</a> are being approved for North Sea oil and gas drilling, while plans to overturn <a href="https://www.independent.co.uk/news/uk/politics/liz-truss-fracking-ban-energy-bills-b2162399.html">the moratorium on fracking</a> have been announced. </p>
<p>Neither fracking or North Sea gas exploration will have an immediate impact on natural gas prices. <a href="https://www.reuters.com/business/energy/exclusive-uk-announce-dozens-new-north-sea-oil-gas-licences-sources-2022-09-07/">New production</a> will not come on stream immediately and even when it does the supply will remain relatively small. </p>
<p>The populist rhetoric about protecting people from rising costs has seen heat pumps, electric vehicles, and renewables all attract blame. However, the £130 billion being borrowed to cap energy bills will help energy <a href="https://www.theguardian.com/money/2022/sep/07/liz-truss-energy-bills-cap-will-fail-to-protect-poorest-say-thinktanks">corporations</a> far more than poor households. </p>
<p>These actions will undermine attempts to eliminate fossil fuel consumption, instead consolidating more capacity for years to come. Oil and gas companies can also be expected to fiercely resist future attempts to reverse this move.</p>
<p>Measures consistent with net zero instead have the potential to address the energy crisis and should be prioritised. Enhancing energy efficiency, insulating housing, and accelerating the shift away from natural gas could have an immediate impact on <a href="https://friendsoftheearth.uk/climate/whats-insulation-and-can-it-save-me-money">energy demand</a>. However, these measures would undermine the oil and gas industries to which the new government is allied, making their adoption improbable.</p>
<h2>How severe is the threat?</h2>
<p>Whether UK climate policy will be watered down depends on factors beyond the prime minister’s immediate control. </p>
<p>Legislation, including the <a href="https://www.legislation.gov.uk/ukpga/2008/27/contents">Climate Change Act</a>, has so far been effective in constraining governments from relapse. Its structure of five-year carbon budgets, and <a href="https://www.theccc.org.uk/">external scrutiny</a> has generally kept policy moving forward.</p>
<p>There is also organised support for climate action within the Conservative party. The influential <a href="https://www.cen.uk.com/">Conservative Environment Network</a>, with a <a href="https://www.cen.uk.com/our-caucus">membership</a> of 133 MPs and 17 members of the House of Lords, resist reversals on climate action. They have immediately pressured the new government over their net zero commitments.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1567796889046622208"}"></div></p>
<p>How effectively they oppose policy shifts will depend on various factors including their own political ambitions and electoral situation. However, fracking and the expanded fossil fuel production are <a href="https://yougov.co.uk/topics/science/trackers/should-britain-start-extracting-shale-gas">deeply unpopular</a> with the public, which will further help the group. Organised parliamentary support for climate action, if it materialises, can restrict how far climate policy can be undermined.</p>
<p>The situation the new prime minister finds herself in is both novel and politically delicate. She is the first prime minister to be elected <a href="https://www.theguardian.com/commentisfree/2022/aug/25/liz-truss-wins-election-tory-prime-minister">against the wishes</a> of the majority of her own party’s MPs. This may weaken her ability to pass legislation. The decision to select a loyal cabinet, forming a narrow range of opinion may intensify the problem she faces.</p>
<p>While the new government represent a threat for UK action on climate change, their ability to inflict damage to climate policy will be restricted. But, immediate risks remain regarding expanded hydrocarbon production. This undermines the pursuit of net zero while doing little to relieve pressure on energy prices.</p><img src="https://counter.theconversation.com/content/190280/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Matthew Paterson has previously received funding from the Social Sciences and Humanities Research Council (Canada). He is a member of the Green Party. </span></em></p>Liz Truss has appointed a loyal cabinet with varied environmental credentials. What will this mean for UK climate action?Matthew Paterson, Professor of International Politics, University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1731832021-12-07T14:37:16Z2021-12-07T14:37:16ZWhy Shell pulled out of the Cambo oilfield<figure><img src="https://images.theconversation.com/files/435867/original/file-20211206-17-bjom9y.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5991%2C3997&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/image-oil-platform-during-sunset-124714078">Dabarti CGI/Shutterstock</a></span></figcaption></figure><p>Shell has scrapped plans to invest in Cambo, a proposed oilfield off the Shetland Islands. The fossil fuel supermajor has been shedding UK assets for a while. It sold a large refinery complex in Cheshire <a href="https://www.shell.co.uk/media/2011-media-releases/stanlow-refinery-sale.html">in 2011</a> and US$3.8 billion (£2.64 billion) of North Sea assets <a href="https://www.shell.com/media/news-and-media-releases/2017/shell-completes-sale-of-uk-north-sea-asset-package-to-chrysaor.html">in 2017</a>. </p>
<p>But the decision to pull out of Cambo is different. Cambo is an undeveloped field rather than a mature legacy asset. Shell bought into it in May 2018 when it acquired a 30% non-operator stake. Climate protesters targeted the Cambo project in the run-up to COP26 – the UN climate conference hosted by the UK in Glasgow in November 2021 – <a href="https://smileymovement.org/news-list/Stop-Cambo-campaign">arguing</a> that new oil and gas developments are incompatible with reaching zero emissions.</p>
<p>Cambo may still go ahead. Shell’s partner in the project is exploring options to develop the field. But Shell’s decision to pull investment has left the government’s continued support for finding and producing new sources of oil and gas in the North Sea exposed.</p>
<h2>Undeveloped, for now</h2>
<p>Cambo is one of the UK’s largest undeveloped offshore oilfields. It was first discovered in 2002 by the US oil firm Hess, which drilled several appraisal wells before the licence passed to Siccar Point in January 2017.</p>
<p>One of several new oil and gas developers to invest in the North Sea <a href="https://blog.geographydirections.com/2020/10/12/north-sea-oil-new-owners-for-twilight-years-raise-questions-of-national-interest/">in recent years</a>, Siccar Point is a comparatively small company controlled by two private equity backers, Bluewater and Blackstone. Its <a href="https://www.siccarpointenergy.co.uk/about-us/our-strategy">strategy</a> is to accumulate stakes in <a href="https://www.siccarpointenergy.co.uk/about-us/our-strategy">low-cost, long-life</a> oil and gas fields in the UK with a view to <a href="https://www.reuters.com/article/siccar-point-ma-blue-water-blackstone-gr-idUSL8N27F785">bringing them into production this decade</a>.</p>
<p>Siccar Point retains its role as the operator of Cambo, with responsibility for managing development and production. The pandemic postponed Siccar Point and Shell’s joint final investment decision, which would commit capital to the project.</p>
<p><a href="https://www.reuters.com/business/energy/shell-partner-scrap-plans-develop-north-sea-oilfield-2021-12-02/">Shell’s announcement</a> that “after comprehensive screening … the economic case for investment in [Cambo] is not strong enough at this time,” came ahead of any formal decision from the UK Oil and Gas Authority, although it may have anticipated it. </p>
<p>The industry regulator supports the recovery of hydrocarbons from the UK’s continental shelf but may have been preparing additional environmental requirements, such as reduced emissions, for example, that would have raised costs.</p>
<p>More broadly, growing public concern about the climate crisis has heightened the reputational costs of pursuing new oil projects in the UK since Shell acquired its stake in 2018. <a href="https://www.bbc.co.uk/news/uk-scotland-scotland-politics-59312510">The Scottish first minister’s</a> alliance with the Green Party and <a href="https://www.standard.co.uk/news/uk/first-minister-nicola-sturgeon-sweden-wales-ireland-b965976.html">Scotland’s vague support</a> for <a href="https://beyondoilandgasalliance.com/">the Beyond Oil and Gas Alliance</a> – a coalition of countries supporting a moratorium on drilling for new fossil fuels – may have played a role, too. </p>
<p>Several of Shell’s plans for the UK have already been thwarted. The government regulator for offshore oil and gas rejected its proposals for developing the Jackdaw gasfield. The Acorn project, designed to capture and store carbon dioxide in underground rock formations, and in which Shell is a partner, was not selected for fast-track government funding either. </p>
<p>Earlier in 2021, a Dutch court ordered Shell to cut its worldwide <a href="https://theconversation.com/shell-ordered-to-cut-its-emissions-why-this-ruling-could-affect-almost-any-major-company-in-the-world-161754">CO₂ emissions by 45%</a> by 2030, and the company continues to struggle with its history in Nigeria. The UK Supreme Court ruled that Nigerian communities can <a href="https://www.business-humanrights.org/en/latest-news/uk-supreme-court-rules-that-polluted-nigerian-communities-can-sue-royal-dutch-shell-in-the-english-courts/">sue Shell directly</a> rather than its Nigerian subsidiary. A US activist hedge fund recently proposed splitting Shell’s legacy business from its newer investments in <a href="https://carbontracker.org/reports/shell-and-third-point-spinning-off-the-sector/">liquefied natural gas and renewables</a>. Shell will have been keen to reassure investors that its future is not at the whim of activists and regulators, but decided internally. </p>
<p>Walking away from <a href="https://www.siccarpointenergy.co.uk/our-portfolio/corona-ridge-area">170 million barrels of oil</a> may seem like a big deal, but it is unlikely to ruffle Shell’s investors. The company’s share of Cambo represents <a href="https://www.ft.com/content/c457f627-23b5-4409-b3a9-b42c00eaa275">a fortnight’s worth</a> of its total global production, but it would be spread over 25 years. Shell continues to explore for new fossil fuels <a href="https://investors.kosmosenergy.com/news-releases/news-release-details/kosmos-energy-announces-farm-down-portfolio-exploration-assets">elsewhere</a>. </p>
<p>Oil companies with multiple fields weigh up an investment case like Cambo against other possibilities for replacing reserves and reducing costs. One interpretation of Shell’s announcement is that it weighed Cambo’s potential returns against its reputational value, plus the cost of tying up capital in the long and contested process of developing a large oil project in the North Sea.</p>
<h2>Shell’s decision doesn’t close the door</h2>
<p>It is too soon to count Cambo out, although Shell’s decision has <a href="https://www.theguardian.com/business/2021/dec/03/shell-u-turn-cambo-could-mean-end-big-north-sea-oil-projects">knocked investor confidence</a> in North Sea oil and gas. The government’s recent North Sea transition deal views investment in the basin, including in so-called frontier areas with undeveloped reserves like west of Shetland, as critical to <a href="https://ukerc.ac.uk/news/offshore-oil-and-gas-continuity-or-transition/">a successful energy transition</a>.</p>
<p>Siccar Point is committed to <a href="https://www.siccarpointenergy.co.uk/uploads/20211202_Cambo_Shell.pdf">pursuing the project</a> but it will need new partners to match the technical and financial challenge Cambo presents. The spate of acquisitions on the UK continental shelf over the past few years suggests buyers for Shell’s share are out there. Shell’s “uneconomic” verdict on Cambo is significant, although not because it presages a wholesale retreat of investment from hydrocarbon production. Rather, it shows a growing differentiation among companies in the sector in how they evaluate wider business risks in responding to net zero obligations. </p>
<p>Long-standing, publicly listed firms are moving away from producing oil from the UK offshore, either divesting from the UK entirely or gradually shifting their UK portfolios towards gas and renewables. In turn, a diverse group of new firms are moving in, backed by private equity and overseas state investment funds and attracted to oil assets. The UK government’s goal of maintaining investment in oil while reducing emissions increasingly relies on firms whose connections to the UK are limited, and whose willingness to respond to net zero obligations remains to be seen.</p>
<hr>
<figure class="align-right ">
<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption"></span>
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<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
<br><em><a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeTop">Get a weekly roundup in your inbox instead.</a> Every Wednesday, The Conversation’s environment editor writes Imagine, a short email that goes a little deeper into just one climate issue. <a href="https://theconversation.com/uk/newsletters/imagine-57?utm_source=TCUK&utm_medium=linkback&utm_campaign=Imagine&utm_content=DontHaveTimeBottom">Join the 10,000+ readers who’ve subscribed so far.</a></em></p>
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<p class="fine-print"><em><span>Gavin Bridge receives funding from UKRI, Economic and Social Research Council. </span></em></p><p class="fine-print"><em><span>Gisa Weszkalnys receives funding from UKRI, Economic and Social Research Council. </span></em></p><p class="fine-print"><em><span>Tiago Teixeira receives funding from UKRI, Economic and Social Research Council.</span></em></p>Shell’s withdrawal highlights unresolved tensions on the road to net zero.Gavin Bridge, Professor of Geography and Fellow of the Durham Energy Institute, Durham UniversityGisa Weszkalnys, Associate Professor of Anthropology, London School of Economics and Political ScienceTiago Teixeira, Postdoctoral Research Associate in Geography, Durham UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1579852021-03-26T17:52:32Z2021-03-26T17:52:32ZScottish independence: could wind power Scotland back into the EU?<p>Now that First Minister Nicola Sturgeon has survived the investigation over the handling of the case against Alex Salmond, Scotland’s attention is turning to the country’s May election. With the SNP seeking a clear mandate for a second referendum on the back of the vote, independence is back to the top of the agenda. It remains to be seen how Salmond’s new pro-independence <a href="https://www.theguardian.com/politics/2021/mar/26/alex-salmond-launches-new-independence-focused-political-party-alba">Alba party</a> will affect the outcome, but according to the latest independence polls, support for leaving the UK is <a href="https://natcen.ac.uk/our-research/research/what-scotland-thinks/">still narrowly</a> in front. </p>
<iframe id="noa-web-audio-player" style="border: none" src="https://embed-player.newsoveraudio.com/v4?key=x84olp&id=https://theconversation.com/scottish-independence-could-wind-power-scotland-back-into-the-eu-157985&bgColor=F5F5F5&color=D8352A&playColor=D8352A" width="100%" height="110px"></iframe>
<p>Yet there is much more economic and political uncertainty in Scotland than in 2014. Following Brexit, Scotland is having to choose which economic area it most wants to associate with – the UK or the EU. </p>
<p>Remaining in the UK means continuing Scotland’s existing economic relationship with England and Wales while facing a more complex relationship with the EU and more controversially Northern Ireland, which effectively remains in the single market.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/391946/original/file-20210326-21-1h887d1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A thistle" src="https://images.theconversation.com/files/391946/original/file-20210326-21-1h887d1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/391946/original/file-20210326-21-1h887d1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/391946/original/file-20210326-21-1h887d1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/391946/original/file-20210326-21-1h887d1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/391946/original/file-20210326-21-1h887d1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/391946/original/file-20210326-21-1h887d1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/391946/original/file-20210326-21-1h887d1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Finances are a thorny matter.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/DyENefFUKlk">Illiya Vjestica/Unsplash</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>What about voting for independence and joining the EU? One major problem is the EU fiscal rules, which require a general budget deficit of no more than 3% of GDP per member (this is <a href="https://www.euractiv.com/section/economic-governance/news/commission-wants-to-keep-fiscal-rules-suspended-in-2022/">temporarily suspended</a> because of COVID). </p>
<p>In 2019-20, <a href="https://www.gov.scot/publications/government-expenditure-revenue-scotland-gers-2019-20/">Scotland’s deficit</a> amounted to 6.9% if North Sea oil revenues are included (or 7.5% without it). This was a considerable improvement on earlier years, but still well above the threshold – and that was before the pandemic. </p>
<p>Now UK borrowing is hitting <a href="https://www.statista.com/statistics/282796/uk-government-borrowing/#:%7E:text=In%20February%202021%2C%20the%20government,in%20this%20provided%20time%20period.">record highs</a> and the Institute for Fiscal Studies thinks Scotland’s effective deficit will have reached <a href="https://www.ifs.org.uk/publications/14982#:%7E:text=Scotland's%20implicit%20budget%20deficit%20could,Institute%20For%20Fiscal%20Studies%20%2D%20IFS">close to 30%</a> in 2020-21. This will affect the long-term debt burden of both the UK and Scotland, and raises questions about how an independent Scotland’s share of the UK debt should be calculated. </p>
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Read more:
<a href="https://theconversation.com/scottish-independence-referendum-why-the-economic-issues-are-quite-different-to-2014-154119">Scottish independence referendum: why the economic issues are quite different to 2014</a>
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<p>Any analysis of independence economics should therefore start by asking whether an independent Scotland could balance the books by increasing revenues and decreasing spending and how willing Scottish society would be to potentially make sacrifices.
Trade looks likely to exacerbate this problem – in the short-term at least. Currently more than 60% of Scotland’s commerce is directed to other UK countries (<a href="https://escoe-website.s3.amazonaws.com/wp-content/uploads/2020/07/16103450/ESCoE-DP-2020-09.pdf">including Northern Ireland</a>, now practically an EU market for trading purposes) while only about 19% goes to the EU. </p>
<p>Ireland was actually similar before it joined the then European Economic Community (EEC) in 1973. <a href="https://www.cso.ie/en/media/csoie/releasespublications/documents/statisticalyearbook/2004/ireland&theeu.pdf">Just before joining</a>, almost 55% of her exports and 51% of imports were directed to the UK, while only 21% went to the EEC. These shares <a href="https://commonslibrary.parliament.uk/research-briefings/cbp-8173/#:%7E:text=They%20are%20taken%20from%20the,surplus%20of%20%C2%A310.0%20billion.&text=Ireland%20accounted%20for%205.8%25%20of,4.2%25%20of%20all%20UK%20imports.">have since</a> completely reversed, though it has taken time and was very complicated and costly for the country as such overhaul requires finding new markets and adjusting to the requirements of new customers, which is always costly for both workers and firms.</p>
<p>Scotland would have to go through a similar adjustment, and voters should be aware of this.</p>
<p>Scottish exports were at least competitive in the EU market pre-Brexit. <a href="https://www.thetimes.co.uk/article/oil-income-is-a-bigger-issue-than-start-up-costs-warns-economist-j2klfxd2z5b">In 2014</a>, some economists suggested that dwindling North Sea oil revenues were a red herring and that Scotland could develop a competitive advantage in well-performing areas like food and drink, financial services, sustainable tourism and green energy. </p>
<h2>The EU and green energy</h2>
<p>One big question is how rejoining the EU would affect Scotland’s finances. The EU would not subsidise Scottish public sector spending, and would probably not make funds available through the bloc’s <a href="https://ec.europa.eu/regional_policy/en/funding/cohesion-fund/#:%7E:text=The%20Cohesion%20Fund%20is%20aimed,and%20to%20promote%20sustainable%20development.">Cohesion Fund</a>. Scots might not think their country is rich, but it earns <a href="https://fraserofallander.org/new-gross-national-income-figures-for-scotland/">more than 90%</a> of <a href="https://data.worldbank.org/indicator/NY.GNP.PCAP.PP.CD?locations=EU">the EU’s</a> average gross national income – well above <a href="https://data.oecd.org/natincome/gross-national-income.htm">various needier members</a>. </p>
<p>However, the <a href="https://ec.europa.eu/regional_policy/en/funding/erdf/">European Regional Development Fund</a> (ERDF) could be of assistance, potentially easing the transition for the nation’s public finances. The ERDF, the 2014-20 budget of which <a href="https://www.europarl.europa.eu/factsheets/en/sheet/95/european-regional-development-fund-erdf">amounted to</a> €199 billion (£170 billion), focuses on the areas which could well be priorities for an independent Scotland such as innovation and research, the digital agenda, support for small businesses and the low-carbon economy. </p>
<p>Green energy would be of particular mutual interest to Scotland and the EU, especially wind power, for which Scotland has the <a href="https://theconversation.com/its-advantage-scotland-when-it-comes-to-wind-power-15900">most favourable</a> conditions in Europe. Scotland’s accession would be valuable to help the EU meet <a href="https://ec.europa.eu/clima/policies/strategies/2050_en">its goal</a> of climate neutrality by 2050. </p>
<p><a href="https://www.caneurope.org/content/uploads/2018/09/Assessment-EU-budget-climate-mainstreaming-CAN-Europe-August-2018.pdf">At least 25%</a> of the EU’s long-term budget is to be dedicated to climate action, while the European Investment Bank, the EU’s lending arm, <a href="https://www.eib.org/attachments/thematic/eib_group_climate_and_environmental_ambitions_en.pdf">plans to invest</a> €1 trillion in climate action and environmental sustainability between now and 2030. </p>
<p>Scotland’s <a href="https://www.scottishrenewables.com/our-industry/statistics">wind power capacity</a> is <a href="https://community.ieawind.org/HigherLogic/System/DownloadDocumentFile.ashx?DocumentFileKey=b1ee7fca-f393-c834-293d-4db886b14370&forceDialog=0">comparable with</a> Italy and below only Germany, Spain and France. But more importantly, <a href="https://www.current-news.co.uk/news/renewables-meet-97-4-of-scotlands-electricity-consumption-in-2020#:%7E:text=Scotland%20has%20fallen%20just%20short,37%25%20of%20Scotland's%20electricity%20demand.">97% of</a> internal energy consumption in Scotland originates from renewables. The EU member with the highest green energy consumption is Sweden, with less than 60%. <a href="https://ec.europa.eu/eurostat/statistics-explained/index.php/Renewable_energy_statistics#:%7E:text=In%202019%2C%20renewable%20energy%20represented,27%20reached%208.9%20%25%20in%202019.">The EU total</a> is only around 20%, so Scotland would immediately raise this share. </p>
<p>Any increase in Scotland’s wind energy production could also be diverted to supply the EU with green energy, further increasing its overall share. Yes <a href="https://www.nationalgrid.com/stories/energy-explained/what-are-electricity-interconnectors#:%7E:text=In%202019%2C%20interconnectors%20supplied%208,between%20Great%20Britain%20and%20Europe.">there are limitations</a> with the electrical interconnectors, but EU finance could be used to expand them.</p>
<p>As Glasgow gets ready to host the <a href="https://ukcop26.org/">COP26</a> climate conference in November, Scotland’s competitive advantage in green energy ought to be an important part of the economic case for independence if and when the second referendum takes place.</p><img src="https://counter.theconversation.com/content/157985/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Those who talk down an independent Scotland’s prospects are not factoring in one of its biggest natural resources.Piotr Marek Jaworski, Lecturer in Economics, Edinburgh Napier UniversityKenny Crossan, Lecturer in Economics, Edinburgh Napier UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1531792021-02-09T16:17:20Z2021-02-09T16:17:20Z5 ways Norway leads and Canada lags on climate action<figure><img src="https://images.theconversation.com/files/383095/original/file-20210208-19-1scbjxf.jpg?ixlib=rb-1.1.0&rect=144%2C89%2C2931%2C2613&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Norway's Prime Minister Erna Solberg greets Prime Minister Justin Trudeau at the G7 leaders summit in La Malbaie, Que., in June 2018.</span> <span class="attribution"><span class="source">THE CANADIAN PRESS/Justin Tang</span></span></figcaption></figure><p>As major oil and gas producers and exporters, Norway and Canada <a href="https://doi.org/10.1080/14693062.2020.1763900">share a particular</a> responsibility for confronting the planet’s existential climate threat. However, their different political, economic and cultural features have resulted in major differences in their climate policy track records.</p>
<p>Overall, Norway is a leader on climate change performance and Canada is a laggard. The 2021 <a href="https://germanwatch.org/en/19686">Climate Change Performance Index</a> ranks 61 countries on their progress in reducing greenhouse gas emissions, energy consumption, renewable energies and climate policy. Norway ranked eighth overall, while Canada was near the bottom in 58th place.</p>
<p>Both countries face epic challenges in weaning themselves from petroleum dependence — and putting an end to exporting carbon emissions. Canada is a long way from winding down the oil and gas industry and implementing a green and inclusive recovery. </p>
<p>One of the advantages Norway holds is the high degree of equality and inclusivity in the policy process, which translates into a healthier democracy than Canada’s. This is something Canada can learn from and improve upon.</p>
<h2>Our way or the Norway</h2>
<p>Canada produces <a href="https://www.nrcan.gc.ca/science-data/data-analysis/energy-data-analysis/energy-facts/crude-oil-facts/20064#L2">4.7 million barrels</a> of oil per day — 80 per cent of it from Alberta — and <a href="https://www.nrcan.gc.ca/science-data/data-analysis/energy-data-analysis/energy-facts/crude-oil-facts/20064">exports 79 per cent to the United States</a>. The carbon emissions from the consumption of those <a href="https://www.policyalternatives.ca/newsroom/news-releases/canadas-fossil-fuel-exports-threat-global-climate-study">fossil fuel exports are almost four times greater than the emissions produced in their extraction and processing</a>. These emissions aren’t attributed to Canada, even though it’s responsible for making them available. </p>
<p>Norway produces <a href="https://www.norskpetroleum.no/en/production-and-exports/exports-of-oil-and-gas/">1.7 million barrels of oil daily</a> and, since the country runs mainly on hydroelectricity, <a href="https://www.norskpetroleum.no/en/production-and-exports/exports-of-oil-and-gas/">exports almost all of it</a>, largely to Western Europe. Norway <a href="http://priceofoil.org/2017/08/09/the-skys-limit-norway-why-norway-should-lead-the-way-in-a-managed-decline-of-oil-and-gas-extraction/">exports 10 times more emissions</a> than it produces domestically. </p>
<p>Norway’s exit ramp from oil dependence is bumpy. Despite some contradictory climate actions, Norway’s progress exceeds that of virtually all petro-states, with Canada trailing behind.</p>
<p>Norway has committed to <a href="https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Norway%20First/Norway_updatedNDC_2020%20(Updated%20submission).pdf">reducing its greenhouse gas emissions by 50-55 per cent compared to 1990s levels by 2030</a>, largely through domestic actions. Norway is the <a href="https://www.theguardian.com/environment/2021/jan/05/electric-cars-record-market-share-norway">world leader in electric vehicle sales</a>; by 2025, all new cars sold will be zero-emission vehicles. Only <a href="https://electricautonomy.ca/2020/08/26/canadian-ev-sales-data-q2-2020/">3.3 per cent of passenger vehicles sold in Canada</a> during the first half of 2020 were electric. </p>
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<figcaption><span class="caption">A satirical GM Super Bowl commercial recognizes Norway’s leadership in electric vehicle sales.</span></figcaption>
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<p>Norway participates in the European Union’s <a href="https://www.oecd.org/environment/tools-evaluation/emissiontradingsystems.htm">Emissions Trading System</a>, <a href="https://ec.europa.eu/clima/policies/ets_en">the world’s largest carbon market</a>, and has spent billions on international offsets in developing countries through its <a href="https://www.oecd.org/dac/evaluation/Norad-Factsheet-interactive-final.pdf">REDD+ program</a> to maintain and expand their forests as carbon sinks.</p>
<p>Canada recently <a href="https://parl.ca/DocumentViewer/en/43-2/bill/C-12/first-reading">introduced legislation</a> to meet or exceed a 30 per cent reduction in carbon emissions by 2030 compared to 2005, in part by boosting its carbon tax, but continues to heavily <a href="https://www.energypolicytracker.org/country/canada">subsidize fossil fuel production</a>. Since early 2020, Canada has allocated US$14.6 billion to support fossil fuel energy and an equivalent amount on clean energy.</p>
<p>Norway also spends a lot on its fossil fuel industry — at least <a href="https://www.energypolicytracker.org/country/norway">US$11.76 billion since 2020</a>. And with an economy that runs largely on renewable energy, it allocated only US$382 million to renewables.</p>
<h2>The good, the bad and the ugly</h2>
<p>Neither Canada nor Norway has achieved absolute emissions reductions. Industry in both countries downplays this reality, choosing to focus instead on their progress in reducing carbon intensity — emissions per barrel of oil. </p>
<p>Neither country has committed to a production endgame either. Denmark is the first major oil-producing country to commit to terminating state-approved oil exploration in the North Sea and <a href="https://www.washingtonpost.com/world/europe/denmark-phaseout-oil-production/2020/12/04/c5559eb4-35b0-11eb-9699-00d311f13d2d_story.html">ending all oil extraction by 2050</a>.</p>
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<a href="https://images.theconversation.com/files/383130/original/file-20210208-17-xirrdx.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A chart ranking countries by their performance on addressing climate change, with Canada near the bottom of the list." src="https://images.theconversation.com/files/383130/original/file-20210208-17-xirrdx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/383130/original/file-20210208-17-xirrdx.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=819&fit=crop&dpr=1 600w, https://images.theconversation.com/files/383130/original/file-20210208-17-xirrdx.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=819&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/383130/original/file-20210208-17-xirrdx.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=819&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/383130/original/file-20210208-17-xirrdx.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1029&fit=crop&dpr=1 754w, https://images.theconversation.com/files/383130/original/file-20210208-17-xirrdx.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1029&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/383130/original/file-20210208-17-xirrdx.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1029&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Climate change performance index (2021). The first three positions are blank because no country scores high enough. Canada is ranked among the worst performing countries and fell three spots in 2021.</span>
<span class="attribution"><a class="source" href="https://ccpi.org/ranking/">(Germanwatch 2020)</a></span>
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<p><a href="https://www.canada.ca/en/environment-climate-change/services/environmental-indicators/greenhouse-gas-emissions.html">Canadian carbon emissions</a> increased 20.9 per cent between 1990 and 2018, mostly driven in turn by a five-fold expansion of oilsands emissions. <a href="https://www.cer-rec.gc.ca/en/data-analysis/canada-energy-future/2020/canada-energy-futures-2020.pdf">Canada’s energy regulator</a> predicts oil production overall will grow 41 per cent from 2018 to 2040. </p>
<p><a href="https://www.regjeringen.no/contentassets/22242455513549449fe30c2a835da953/t-1569e.pdf">Norway’s emissions increased three per cent</a> between 1990 and 2018, and it <a href="https://thebarentsobserver.com/en/2019/11/un-warning-norway-growing-oil-production-inconsistent-climate-efforts">continues to sell oil leases for offshore drilling</a> including in the Barents Sea and the Norwegian Sea. Canada has imposed a moratorium on Arctic offshore drilling.</p>
<h2>Divergent paths</h2>
<p>Canada and Norway’s paths to carbon zero have, for the most part, diverged, with Canada falling behind badly.</p>
<ol>
<li><p>In Norway, the <a href="https://www.equinor.com/en/how-and-why/sustainability.html">state-controlled company, Equinor</a>, and the government jointly determine climate policy. In Canada, <a href="https://www.penguinrandomhouse.ca/books/621948/the-new-corporation-by-joel-bakan/9780735238848">petroleum corporations have more leverage on climate policy because they control their production and investment decisions at home and abroad</a>, and are accountable only to their shareholders. </p></li>
<li><p>Norway is a unitary state giving the government <a href="https://tspace.library.utoronto.ca/handle/1807/101303">uncontested jurisdictional authority over climate policy</a>. As a federal state with divided jurisdictions, the Canadian federal government is in a much weaker policy-making position.</p></li>
<li><p>There is a high degree of <a href="https://www.policyalternatives.ca/publications/reports/petro-path-not-taken">political stability on climate action</a> in Norway. Even the right-wing Progress Party acknowledges the climate threat and supports the government’s climate plan. In Canada, wide swings on climate policy over the past 40 years have thwarted sustained advances. While a majority of Canadians now support decisive action on climate change, there are <a href="https://www.hilltimes.com/wp-content/uploads/2021/01/011121_ht.pdf">splits along party lines</a> and geography, with most Conservative provincial governments opposing a carbon tax. </p></li>
<li><p>In Canada, especially under Conservative governments, there has been very little consultation with labour unions and NGOs on climate policy, whereas in Norway these <a href="https://tspace.library.utoronto.ca/handle/1807/101303">consultations are viewed as essential</a> in shaping policy, regardless of the government in power. Additionally, Norway’s <a href="https://www.e-ir.info/2016/12/10/how-inequality-undermines-democracy/">lower levels of economic inequality and stronger social safety net</a> reinforce its robust democracy.</p></li>
<li><p>Alberta squandered its oil wealth on low provincial taxes and corporate giveaways. The province created the Alberta Heritage Fund in the 1970s, but it currently contains only US$12 billion. Norway on the other hand, created a sovereign wealth fund in 1996 to retain the bulk of economic rent from the oil and gas extraction. The <a href="https://www.swfinstitute.org/profile/598cdaa60124e9fd2d05b9af">fund now holds US$1.3 trillion in global investments</a>, which facilitates its climate transition. The <a href="https://www.cnbc.com/2020/02/27/norway-wealth-fund-earned-a-record-180-billion-in-2019.html">fund’s return on these investments</a> in 2019 was US$180 billion, and in 2020 it <a href="https://www.vox.com/22256192/norway-oil-gas-investments-fossil-fuel">sold the last of its money-losing investments in foreign fossil fuel companies</a>. The <a href="https://www.norskpetroleum.no/en/economy/governments-revenues/">Norwegian government is still highly dependent on the petroleum sector</a>, but fiscal rules allow it to draw up to four per cent annually from the sovereign wealth fund returns if net petroleum transfers fall short of spending requirements. </p></li>
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<h2>Political leadership is crucial</h2>
<p>There is plenty of room for Canada to increase taxes on the wealthy and corporations. It can also <a href="https://www.project-syndicate.org/commentary/central-banking-green-transition-climate-change-by-mariana-mazzucato-et-al-2020-12">strengthen its public investment banks and expand the Bank of Canada’s “quantitative easing” efforts</a>, namely holding government-issued debt to provide the necessary resources for an equitable and sustainable transition. </p>
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Read more:
<a href="https://theconversation.com/the-throne-speech-must-blaze-a-bold-new-path-including-imposing-a-wealth-tax-145747">The throne speech must blaze a bold new path — including imposing a wealth tax</a>
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<p>Governing the decentralized Canadian federation is complex. This puts more weight on political leadership in all parties, in all regions, to acknowledge the truth about the climate crisis and build the necessary consensus to meet the challenge. </p>
<p>Political leadership is the art of persuasion: learning from the past, building coalitions, taking bold action. As a major carbon emitter, Canada must fulfil its global responsibility in helping to stop this <a href="https://www.cbc.ca/radio/ideas/the-2004-cbc-massey-lectures-a-short-history-of-progress-1.2946872">runaway train</a>. </p>
<p>Denial, delay and division are no longer an option. Leadership that fails avoid a cataclysmic future will be judged harshly by our descendents.</p><img src="https://counter.theconversation.com/content/153179/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bruce Campbell a volunteer board member with the Rideau Institute for International Affairs and the Group of 78; and the Canadian Centre for Policy Alternatives Steering Committee. He is a research collaborator on the SSHRC Grant, York University, Adapting Work and Workplaces to Climate Change.
</span></em></p>Canada and Norway face epic challenges in weaning themselves from petroleum dependence.Bruce Campbell, Adjunct professor, Faculty of Environmental Studies, York University, CanadaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1476122020-10-08T13:58:30Z2020-10-08T13:58:30ZWe want green energy jobs, say North Sea oil and gas workers – what they need to make the leap<figure><img src="https://images.theconversation.com/files/362470/original/file-20201008-16-1i0vr8a.jpg?ixlib=rb-1.1.0&rect=0%2C143%2C6399%2C4119&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/production-operator-communicate-between-central-control-796288390">Oil and Gas Photographer/Shutterstock</a></span></figcaption></figure><p>For the first time in history, the price of US oil <a href="https://www.theguardian.com/business/2020/apr/20/over-a-barrel-how-oil-prices-dropped-below-zero#:%7E:text=US%20oil%20prices%20turned%20negative,the%20fastest%20plunge%20in%20history.">turned negative</a> in April 2020. While the oil and gas sector has faced downturns before, the collapse of demand during lockdowns in the pandemic may prove to be its biggest challenge yet. The ensuing glut of cheap oil has mired operations in the North Sea too, where as many as <a href="https://www.bbc.co.uk/news/uk-scotland-scotland-business-52446555">30,000 jobs</a> could be lost.</p>
<p>Signalling his ambition for a sea change in the region’s energy sector, Prime Minister Boris Johnson recently pledged to <a href="https://www.bbc.co.uk/news/uk-politics-54421489">power every home</a> in the UK with electricity generated by offshore wind farms by 2030. But if the North Sea skyline shifts from rigs to turbines, where does that leave oil and gas workers? What do they think about the emerging green economy and their place within it? </p>
<p>A recent <a href="https://platformlondon.org/wp-content/uploads/2020/09/Oil-Gas-Workers-Report.pdf">survey</a> by Platform, Friends of the Earth Scotland and Greenpeace asked 1,383 people employed in North Sea oil and gas to give their thoughts on climate change, green energy and their industry and its future. This rare insight revealed key barriers preventing workers in high-carbon industries from switching – and how their transition could be supported to hasten a low-carbon economy. </p>
<h2>Talking to workers</h2>
<p>Throughout our research, we’ve found that workers in “dirty” industries tend to support environmentally friendly policies once they’re certain they can secure <a href="https://www.labor4sustainability.org/articles/union-members-dont-oppose-environmental-protections-theyre-actually-more-likely-to-support-them/">alternative employment</a>. The findings of the survey support this, with 82% saying they would consider moving to a job outside of the oil and gas industry, and over half expressing an interest in renewables and offshore wind. One worker said that “moving into renewables is something to feel good about.” </p>
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<strong>
Read more:
<a href="https://theconversation.com/coal-mines-can-be-closed-without-destroying-livelihoods-heres-how-124336">Coal mines can be closed without destroying livelihoods – here's how</a>
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<p>To encourage more workers into green energy, survey respondents said these new jobs shouldn’t recreate the same precarity that has led to low morale in the oil and gas <a href="https://calgaryherald.com/business/energy/burnout-and-low-morale-in-oilpatch-due-to-staff-cuts-with-more-to-come-report">industry</a>. Almost half of those interviewed said they had been made redundant or <a href="https://www.citizensadvice.org.uk/work/coronavirus-being-furloughed-if-you-cant-work/">furloughed</a> since March 2020, and they ranked job insecurity as their biggest reason for wanting to leave oil and gas.</p>
<p>The construction and engineering skills that workers accrue in the oil and gas industry are useful elsewhere in the energy sector. But some survey respondents said they felt their knowledge and expertise was currently “untapped”. Many were enthusiastic about sharing their experiences publicly, which is notable in an industry with a history of <a href="https://www.bbc.com/news/uk-scotland-north-east-orkney-shetland-38968009#:%7E:text=Discrimination%2520against%2520former%2520oil%2520and,to%2520the%2520UK%2520employment%2520minister.">blacklisting</a>.</p>
<p>More than half of those interviewed were keen to retrain and work in offshore wind, and only one in five wanted a career outside the energy sector. But while training might have previously been funded by employers, the report outlined how the cost of obtaining necessary certification now often falls on workers across the offshore energy sector. One respondent said “programmes for people in the industry should be free or at least accessible. Education is expensive.”</p>
<h2>Just transitions</h2>
<p>We research how policy can reallocate labour from highly polluting industries, such as those in the fossil fuel sector, to climate-friendly ones which can help decarbonise society, like renewable energy. The effort to ensure that this process considers, consults, and involves workers in high-carbon industries, supporting them to retrain and make the switch to cleaner work, is known as a “just transition”.</p>
<p><a href="https://theconversation.com/coal-mines-can-be-closed-without-destroying-livelihoods-heres-how-124336">We’ve found</a> that there are four broad principles for guiding just transitions. Workers in high-carbon sectors like the fossil fuel industry should be consulted and able to inform plans for the future. Enough suitable substitute jobs in cleaner industries should be created, with opportunities for retraining available to all who want them, regardless of their means. And lastly, where retraining or re-employment isn’t possible, the government must support workers and their communities by investing in their future and, where necessary, providing compensation.</p>
<p>Worryingly, 91% of oil and gas workers surveyed in the recent report had never heard the term “just transition” before. But when asked what should be done to support their move away from a sector in which many feel unhappy, their responses more or less tracked the principles that researchers like ourselves had identified. This is encouraging, as it implies there is an emerging consensus among workers and industry experts about the kind of pathway that could wind down polluting industries fairly.</p>
<figure class="align-center ">
<img alt="Two engineers in harnesses attend to a wind turbine." src="https://images.theconversation.com/files/362445/original/file-20201008-24-n0uogu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/362445/original/file-20201008-24-n0uogu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/362445/original/file-20201008-24-n0uogu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/362445/original/file-20201008-24-n0uogu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/362445/original/file-20201008-24-n0uogu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/362445/original/file-20201008-24-n0uogu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/362445/original/file-20201008-24-n0uogu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Workers stressed the need for state support in retraining and finding new jobs in greener industries.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/inspection-engineers-preparing-rappel-down-rotor-1244998828">Jacques Tarnero/Shutterstock</a></span>
</figcaption>
</figure>
<p>The report suggested particular proposals that could assuage some of the worries workers raised, such as a jobs guarantee to create full employment for former oil and gas workers, and standardising the certification for offshore work across oil and wind to allow an easy transition between the two.</p>
<p>More than simply supporting workers, a just transition could unlock their potential to innovate in the green economy. With relevant education and retraining, workers could use the practical knowledge they already have to identify what’s needed to help renewable energy overtake oil and gas as the dominant means of fuelling society.</p><img src="https://counter.theconversation.com/content/147612/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kieran Harrahill receives funding from Teagasc for his PhD research in partnership with the BiOrbic Bioeconomy Research Centre in Dublin.
</span></em></p><p class="fine-print"><em><span>Owen Douglas works for the Eastern and Midland Regional Assembly in Ireland, of which a key function is the delivery of the Regional Spatial and Economic Strategy. This strategy supports a just transition to clean energy and a green economy.</span></em></p>A recent report found widespread support among North Sea oil and gas workers for a career in renewable energy.Kieran Harrahill, PhD Candidate in Bioeconomy, University College DublinOwen Douglas, Occasional Lecturer in Planning and Environmental Policy, University College DublinLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/947862018-04-11T13:43:59Z2018-04-11T13:43:59ZI asked UK government why it’s spending £25 billion dismantling oil platforms – here’s the reply<figure><img src="https://images.theconversation.com/files/214303/original/file-20180411-584-1sc143k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Water waste of money. </span> <span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:North_Sea_Oil_Rig_(7573694644).jpg#/media/File:North_Sea_Oil_Rig_(7573694644).jpg">Wikimedia</a></span></figcaption></figure><p>As North Sea petroleum moves towards the end of its lifespan, the UK taxpayer is to spend <a href="https://www.woodmac.com/reports/upstream-oil-and-gas-us32-billion-of-decommissioning-worldwide-over-the-next-five-years-is-the-industry-ready-9599">some £25 billion</a> to pay nearly half the cost of removing the offshore infrastructure. </p>
<p>This might sound like the right thing to do, but as I have <a href="https://theconversation.com/north-sea-decommissioning-will-cost-taxpayers-billions-heres-a-better-idea-69509">argued before</a>, it is probably not the best use of public money. The environmental benefits of decommissioning are <a href="https://scottishwildlifetrust.org.uk/docs/002_293__decommissioningoffshoreinfrastructure_policy_1386585277.pdf">questionable</a>. If we instead spent the money on, say, building more renewable energy, it would create jobs for longer and you would generate carbon-free power for your trouble. Others might not share this view – my point is it’s a debate we’re not having. </p>
<p>I have repeatedly asked the relevant government agencies to outline the motivations that support the current plans. They have never given me straight answers. My latest move has been to submit a request for information to the government’s department for business, energy and industrial strategy.</p>
<h2>Environmental bluster</h2>
<p>In my request, I once again expressed my concerns about value for money. I said my previous requests had been met with a stock response that offshore operators have to decommission installations at the end of a field’s economic life, and that in accordance with UK and international obligations this has to be safe, efficient and cost-effective to the taxpayer while minimising the risk to the environment and other users of the sea. </p>
<p>This, I told them, says nothing about the reasons behind the policy – neither the primary environmental motivation nor anything to do with society or economics. I asked for the environmental basis underpinning the policy. </p>
<p>I received a reply from the director of decommissioning at the department. It says:</p>
<blockquote>
<p>The UK’s international obligations on decommissioning are governed principally by the 1992 Convention for the Protection of the Marine Environment of the North East Atlantic (the <a href="https://www.ospar.org/convention/text">OSPAR convention</a>) and in particular <a href="https://rod.eionet.europa.eu/obligations/459">decision 98/3</a> on the disposal of disused offshore installations.</p>
</blockquote>
<p>The UK is indeed one of 15 parties to the convention, all of them countries in western Europe. Paragraph 2 of decision 98/3 stipulates that disused offshore installations can’t be dumped or left “wholly or partly in place” at sea. </p>
<p>The competent authority can allow exceptions, but it’s quite narrow – covering certain concrete infrastructure; the base of large steel structures; and some other installations that are very damaged. It leaves little scope for what I am suggesting. </p>
<p>The response says that:</p>
<blockquote>
<p>We seek to achieve effective and balanced decommissioning solutions which are consistent with international obligations and have a proper regard for safety, the environment, other legitimate uses of the sea, economic and social considerations as well as technical feasibility …</p>
<p>[The decommissioning process] entails an assessment of the environmental impact [by the operator, and] … it is one of the factors that influences the final decision [by them on whether to go ahead] … Ultimately if leaving the infrastructure in place would not have a significant detrimental effect on the environment then an operator may make a case to decommission in-situ.</p>
</blockquote>
<p>None of this says anything about overriding environmental benefits in removing these structures. Decision 98/3 is silent, and none of the government reports I have read address them either. </p>
<p>As for the operator’s environmental impact assessment, it is not their job to consider the taxpayer’s options. It is for the government, and it’s not happening.</p>
<p>How does this therefore amount to the government achieving a balanced solution? Where is the evidence that the legislation is providing a positive outcome? If it can’t be provided then the legislation is not appropriate and should be challenged – however well intentioned it may be. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/214275/original/file-20180411-560-v910g2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/214275/original/file-20180411-560-v910g2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/214275/original/file-20180411-560-v910g2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=471&fit=crop&dpr=1 600w, https://images.theconversation.com/files/214275/original/file-20180411-560-v910g2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=471&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/214275/original/file-20180411-560-v910g2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=471&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/214275/original/file-20180411-560-v910g2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=592&fit=crop&dpr=1 754w, https://images.theconversation.com/files/214275/original/file-20180411-560-v910g2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=592&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/214275/original/file-20180411-560-v910g2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=592&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Paved with good intentions.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/oil-platform-uk-422658097?src=CuaGny059GZtJWLn7_NWag-1-2">Mr. PK</a></span>
</figcaption>
</figure>
<p>The response also informs me that a joint industry project called INSITE is aiming to “enhance scientific understanding of the effect of man-made structures on the North Sea and thus support decision-making [by operators]”. </p>
<p>I am familiar with INSITE and have met with the project manager and discussed the programme. INSITE is undertaking some first-class science but its very existence and government funding only serves to demonstrate the lack of evidence that supports removal. </p>
<h2>The money question</h2>
<p>The department’s response also addresses the cost to the taxpayer, which is being spent in the form of tax relief for operators who are decommissioning. It says: </p>
<blockquote>
<p>North Sea operators have paid over £330 billion of tax since the 1970s at tax rates significantly higher than onshore companies, therefore allowing tax relief on decommissioning ensures a fair tax system that gives companies good incentives to maximise economic recovery.</p>
</blockquote>
<p>What is that justifying or explaining? Because oil and gas companies have paid due taxes on eye-watering profits in the past, the government can use taxpayers’ money for future decommissioning costs? </p>
<p>The response refers to these as an “unavoidable cost for industry”. Well plugging and abandonment is unavoidable but asset removal? Witness the <a href="http://www.rig2reefexploration.org/read-me/">rigs to reefs programme</a> in the US. </p>
<p>The response says the government and industry are working on reducing decommissioning costs by 35%, but why spend the money in the first place? If a large proportion of costs can be removed, surely that would be a better incentive to maximise petroleum recovery?</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/214277/original/file-20180411-560-5c8i2s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/214277/original/file-20180411-560-5c8i2s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/214277/original/file-20180411-560-5c8i2s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=403&fit=crop&dpr=1 600w, https://images.theconversation.com/files/214277/original/file-20180411-560-5c8i2s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=403&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/214277/original/file-20180411-560-5c8i2s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=403&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/214277/original/file-20180411-560-5c8i2s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=507&fit=crop&dpr=1 754w, https://images.theconversation.com/files/214277/original/file-20180411-560-5c8i2s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=507&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/214277/original/file-20180411-560-5c8i2s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=507&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Reef or grief?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/oil-platform-uk-422658097?src=CuaGny059GZtJWLn7_NWag-1-2">Richard Whitcombe</a></span>
</figcaption>
</figure>
<p>The UK, it concludes, remains committed to OSPAR and decision 98/3 and “there are no proposals to change the decommissioning process in operation”. The taxpayer, in other words, will be running up this huge bill to follow legislation without anyone having to demonstrate the case for it. </p>
<p>It is time that decommissioning policy be hastily re-examined in the UK. The government needs to commission a full evidence-based report into the environmental, social and economic benefits, comparing them to other options such as building more green energy stations and even spending the money on things like health or education. </p>
<p>If I am proven right about which will come out on top, the UK should renegotiate terms with OSPAR. Blindly going ahead with this policy is wrong. It is time to think again.</p><img src="https://counter.theconversation.com/content/94786/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tom Baxter does occasional oil and gas consultancy work for Genesis Oil and Gas Consultants. They would not stand to benefit in any way if the UK changed its policy on North Sea decommissioning.</span></em></p>It’s a policy to help the environment, so where’s the evidence to support it?Tom Baxter, Senior Lecturer in Chemical Engineering, University of AberdeenLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/760632017-04-13T10:00:38Z2017-04-13T10:00:38ZFive myths about dismantling North Sea oil rigs<figure><img src="https://images.theconversation.com/files/165051/original/image-20170412-25888-28b9p9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">One of Shell's Brent oil platforms.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/57401623@N08/6405925141/in/photolist-3u6avi-aL53nc-2sGZmM-9pfW4Q-5VWWs6-66T2SR-pmwm8c-9pfWp5-2KHTUM-2KHSxn-2KNfr9-2KNb7d-2KNg5N-cJPhtC-6yDFHg-nAvAQ5-brY8js-671wo4-671EPe-fuEhKw-671Kzx-QBdik-8To2xT-bvz9TC-7spAdX-2KNbUb-2KNePs-GtFmc-eZaTh1-2KNanG-2KNdty-qHRhTT-dr8aJw-9hDktx-kbi3PW-5sL3EE-HTEff8-9sGjKU-spbaX3-7spAwn-ci94qu-4ppefC-7stzdA-bCXYVy-cGmbts-qQCvEr-5sL5LL-CecMUj-np6qkq-eyrMhc">Scott Aspland</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>Oil giant Royal Dutch Shell <a href="https://www.energyvoice.com/oilandgas/north-sea/136122/green-groups-reject-shells-brent-oilfield-decommissioning-plans/">is under fire</a> from environmental groups over its <a href="http://www.shell.co.uk/sustainability/decommissioning/brent-field-decommissioning/brent-field-decommissioning-programme.html">proposal</a> to decommission the Brent oilfield in the North Sea. The plans submitted to the government relate to four concrete and steel platforms which have been in service for 40 years. </p>
<p>The environmental groups, which include WWF Scotland and Greenpeace UK, are refusing to back Shell’s plans. They claim the company has not made enough information public to properly cross-reference its proposals against the internationally agreed <a href="https://www.ospar.org/about/how">OSPAR rules</a> that are supposed to govern decommissioning. </p>
<p>Shell is one of a number of oil producers looking at decommissioning now that many North Sea oil and gas fields are reaching the end of their productive lives. Decommissioning is a massive, expensive and technically challenging task; and Brent is <a href="https://www.ft.com/content/8ffac6ee-1ba7-11e7-bcac-6d03d067f81f">seen as</a> a test case for the rest of the UK industry. </p>
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<p>While the UK government mulls Shell’s proposals, there are a number of myths surrounding the decommissioning process that people need to be aware of.</p>
<h2>1. The oil company pays</h2>
<p>Shell said in its <a href="http://www.shell.co.uk/sustainability/decommissioning/brent-field-decommissioning/decommissioning-in-the-uk.html">Brent proposal</a>: “Shell and Esso will be paying the decommissioning costs. The tax relief we will get back is not a subsidy or a new cost to the taxpayer – it’s a refund – i.e. the tax has already been paid by Shell and Esso in previous years.”</p>
<p>But by having <a href="https://www.ft.com/content/9b1d17d0-d425-11e6-b06b-680c49b4b4c0">tax rules</a> that allow oil producers to reclaim taxes paid in previous years to cover the cost of decommissioning, the taxpayer does pay. </p>
<p>If decommissioning comes in at the approximate £50 billion <a href="https://www.ogauthority.co.uk/media/1020/oga_decomm_strategy.pdf">estimate</a>, the treasury (the taxpayer) will be down by around £25bn. If the costs are higher, the treasury will pay more – a huge risk to the taxpayer. As a result of this system, oil producers already <a href="https://www.carbonbrief.org/analysis-north-sea-industry-cost-uk-taxpayers-396m-2016">reportedly became</a> a net drain on the UK’s coffers for the first time in 2016, costing the taxpayer £396m. </p>
<h2>2. There are environmental benefits</h2>
<p>Many marine habitat experts <a href="https://theconversation.com/is-it-really-best-for-the-environment-to-remove-all-traces-of-oil-and-gas-production-in-the-north-sea-63842">are saying</a> there is little environmental benefit from removal. Indeed some of the decommissioning activities are expected to do more environmental harm than good. This is due to seabed disruption, noise and the removal process itself, which is very energy intensive and will therefore be a major source of harmful emissions. </p>
<p>If the architecture is left in place, it will naturally reef and arguably create an environmental positive. The reefing concept has been used extensively in the Gulf of Mexico with the <a href="https://www.bsee.gov/what-we-do/environmental-focuses/rigs-to-reefs">Rigs to Reefs programme</a>. </p>
<p>In an area which lacks natural reefs, this <a href="http://www.api.org/oil-and-natural-gas/environment/environmental-performance/environmental-stewardship/rigs-to-reef-programs">has enhanced</a> the marine habitat for many species of fish. Admittedly some people have <a href="http://www.nola.com/environment/index.ssf/2014/07/gulf_of_mexico_rigs-to-reefs_p.html">raised concerns</a> about environmental damage from deteriorating metal and reefing disrupting the natural ecology, but one can certainly argue the positives outweigh any negatives. </p>
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<p>As I have <a href="https://theconversation.com/north-sea-decommissioning-will-cost-taxpayers-billions-heres-a-better-idea-69509">argued before</a>, leaving this offshore infrastructure in place and using the savings from taxpayers’ money to fund green energy projects would be much more sensible. Alternatively, you could invest the money in recovering the country’s manufacturing base, NHS funding, education, marine conservation, improving flood defences or tackling poverty. </p>
<h2>3. We’ll see an onshore jobs bonanza</h2>
<p><a href="http://www.telegraph.co.uk/business/2017/02/08/submits-plans-dismantle-north-sea-stalwart/">Numerous</a> reports <a href="http://www.heraldscotland.com/business/13202719.End_of_a_North_Sea_era__could_the_dismantling_of_the_Brent_field_spark_a_decommissioning_bonanza_for_Scotland_/">in the media</a> have reflected claims like this. In reality, onshore activities <a href="https://cld.bz/jb05Hxr/56">are around</a> 2%-3% of the overall decommissioning costs, and onshore jobs are only a fraction of that. The jobs are transient; once the task is complete, there is no follow-on activity. </p>
<p>If we chose the green energy option, it would provide many more sustainable jobs designing, fabricating and constructing the wind farms and other power sources; as well as continuous operations and maintenance jobs over their 30 to 40 year lifespans. The same could be said of many of my other suggested alternatives. </p>
<h2>4. Decommissioning is good for the economy</h2>
<p>How can a decommissioning industry that produces nothing and uses billions of taxpayers’ money be good for the economy? It is about taking things to bits. While it’s true you create short-term employment and that the employees and service companies will pay taxes, you don’t build any factories or provide new infrastructure to serve society and the economy. Also, much of the removal money will go to the heavy-lift companies – the UK has none. </p>
<p>The <a href="https://www.gov.uk/government/organisations/oil-and-gas-authority">Oil and Gas Authority (OGA)</a>, an executive agency of the UK <a href="https://www.gov.uk/government/organisations/department-for-business-energy-and-industrial-strategy/about">Department for Business, Energy and Industrial Strategy (BEIS)</a> is also obliged to maximise the economic recovery of the country’s petroleum resources. How can the current plans for decommissioning be maximising economic recovery? </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/165058/original/image-20170412-25882-162leuh.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/165058/original/image-20170412-25882-162leuh.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/165058/original/image-20170412-25882-162leuh.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=389&fit=crop&dpr=1 600w, https://images.theconversation.com/files/165058/original/image-20170412-25882-162leuh.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=389&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/165058/original/image-20170412-25882-162leuh.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=389&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/165058/original/image-20170412-25882-162leuh.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=488&fit=crop&dpr=1 754w, https://images.theconversation.com/files/165058/original/image-20170412-25882-162leuh.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=488&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/165058/original/image-20170412-25882-162leuh.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=488&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Support structure being dismantled at Tyneside, northeast England.</span>
<span class="attribution"><a class="source" href="http://www.geograph.org.uk/photo/2338411">Wikimedia</a></span>
</figcaption>
</figure>
<p>Again, to compare with my preferred option of leaving platforms in place and putting the money into green energy, this would clearly achieve more economic recovery. It would provide society and the economy with an essential commodity – power for industry, electric transport and heat for homes. The OGA has an <a href="https://www.ogauthority.co.uk/media/1020/oga_decomm_strategy.pdf">objective</a> of reducing decommissioning costs by around 35%, but the country can do far better – the authority should be lobbying Westminster accordingly. </p>
<h2>5. UK must follow OSPAR</h2>
<p>When I raised the question of maximising economic recovery with OGA and BEIS, I was told their role is to ensure OSPAR is followed and not to challenge it. OSPAR is the mechanism by which 15 governments of the western coasts and catchments of Europe, together with the EU, cooperate to protect the marine environment of the northeast Atlantic. It broadly requires full removal of oil platforms at the end of their economic lives.</p>
<p>As well intentioned as OSPAR is, the directives are taking the nation to a very poor outcome. We know so much more now than when the directives were agreed in 1998 – the consequences of global warming, for instance, hence the argument that green energy looks a better investment nowadays. Even OSPAR should be able to see green energy as having a much better outcome for the international community. Why is the UK not challenging the agreement?</p><img src="https://counter.theconversation.com/content/76063/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tom Baxter does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Shell’s proposals to decommission its four Brent platforms are a test case for North Sea industry. But here’s why decommissioning is not what it’s cracked up to be.Tom Baxter, Senior Lecturer in Chemical Engineering, University of AberdeenLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/638422016-08-30T09:02:53Z2016-08-30T09:02:53ZIs it really best for the environment to remove all traces of oil and gas production in the North Sea?<figure><img src="https://images.theconversation.com/files/134986/original/image-20160822-18718-x4a0by.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Unnatural world? We need to look beneath the surface.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/dl2_lim.mhtml?src=XMwF8fL5YBNGjY9G-vx2iw-1-10&id=301964&size=huge_jpg">Shutterstock</a></span></figcaption></figure><p>In Europe, the majority of oil and gas production (OGP) comes from mature offshore facilities that are approaching the end of their <a href="https://www.spe.org/ogf/print/subscribers/2016/04/05_GlobalMarket_April16.pdf">lifespan</a>. The current low oil price is prompting decisions about the decommissioning of this ageing infrastructure, particularly in the North Sea. </p>
<p>Many producing regions, such as Europe, have regulatory frameworks requiring – with relatively limited exceptions – the entire infrastructure to be removed once production ceases. These regulations, for example the <a href="http://www.ospar.org">Convention for the Protection of the Marine Environment of the North-East Atlantic (OSPAR)</a>, were put in place to ensure that the ecosystems where OGP takes place would be restored to their pristine state once production stopped. </p>
<p>But what are the consequences of this? And will they benefit the natural world? Ecosystems are complex and adaptive – that is, they are systems composed of many interacting species. Crucially, these interactions can change over time depending on the internal and external forces being applied to the system. The very nature of ecosystems means that we cannot think about them as we would an engineered system. </p>
<p>A <a href="http://www.sciencedirect.com/science/article/pii/S0169534713001419">wealth of</a> <a href="http://www.nature.com/nature/journal/v413/n6856/abs/413591a0.html">studies</a> have shown over the past two decades that ecosystem restoration is complex and that removing things like the infrastructure that supports the North Sea oil and gas industry does not necessarily result in a return to the ecosystem’s original state. The introduction of the OGP infrastructure has changed the North Sea. Structures such as platforms, thousands of kilometres of pipelines and other sub-sea structures have been in place for decades – and have been used as a medium for new ecosystems to establish themselves. </p>
<p>And so our current understanding of ecosystem dynamics raises some important questions. What is the North Sea’s pristine condition? How do we get it back to that state? And would that really be the best thing to do?</p>
<h2>Humans: part of nature or a species apart?</h2>
<p>Ecosystems can exist in different states depending on how the species within them interact. The transition, or shift, between states can depend on external factors, such as perturbations or the introduction of novel habitats. <a href="http://www.sciencedirect.com/science/article/pii/S0169534711002060">Overfishing</a> is the best known example of how a marine ecosystem state shift can occur. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/135181/original/image-20160823-30249-c19yfd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/135181/original/image-20160823-30249-c19yfd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/135181/original/image-20160823-30249-c19yfd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/135181/original/image-20160823-30249-c19yfd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/135181/original/image-20160823-30249-c19yfd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/135181/original/image-20160823-30249-c19yfd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/135181/original/image-20160823-30249-c19yfd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">What would a ‘pristine’ North Sea look like?</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/dl2_lim.mhtml?src=2N0ajnOfF18qPSyPMdxSpg-1-95&id=30460015&size=medium_jpg">Shutterstock</a></span>
</figcaption>
</figure>
<p>One textbook example is the shift between <a href="http://www.int-res.com/articles/feature/m495p001.pdf">kelp forests</a> and <a href="http://rstb.royalsocietypublishing.org/content/370/1659/20130269">sea urchin barrens</a>. The over exploitation of sea otters for their fur on the US Pacific coast led to a boom in the populations of sea urchins – which are prey for otters and which overgrazed the kelp forests and completely transformed the coastal ecosystem.</p>
<p>While this particular shift led to a less productive and therefore less desirable ecosystem, state shifts do not necessarily change ecosystems for the worse.</p>
<p>The <a href="http://www.sciencedirect.com/science/article/pii/S0025326X08002282">pre-OGP North Sea</a> was blighted by over-fishing and was still recovering from being a naval theatre of war. Several fish stocks were collapsed with unknown consequences for the ecosystem. Is this really the ecosystem we should aim to recover? </p>
<p>And if we go further back, humans have been using the North Sea for millennia. If we take the view that humans are a species apart from nature, we need to discover what would constitute a “<a href="http://science.sciencemag.org/content/293/5530/629.full">pristine</a>” North Sea state – that is to say, a North Sea unaffected by any human activity and influence. And how would we restore the sea to this state without considering the needs, and impacts, of other users such as shipping and fishing – or indeed the species thriving there now? </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/135178/original/image-20160823-30231-uwqr7x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/135178/original/image-20160823-30231-uwqr7x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/135178/original/image-20160823-30231-uwqr7x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=806&fit=crop&dpr=1 600w, https://images.theconversation.com/files/135178/original/image-20160823-30231-uwqr7x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=806&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/135178/original/image-20160823-30231-uwqr7x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=806&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/135178/original/image-20160823-30231-uwqr7x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1013&fit=crop&dpr=1 754w, https://images.theconversation.com/files/135178/original/image-20160823-30231-uwqr7x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1013&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/135178/original/image-20160823-30231-uwqr7x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1013&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">North Sea oil and gas fields.</span>
<span class="attribution"><a class="source" href="https://upload.wikimedia.org/wikipedia/commons/2/22/North_Sea_OilandGas_Fields.jpg">By Gautier, D.L. (US Dept. of Interior)</a></span>
</figcaption>
</figure>
<p>Alternatively, we could take the view that humans and their influences – such as OGP infrastructure – are an integral part of nature. This enables us to take into account the possible benefits of human activity. We should consider, for example, the role played by <a href="http://www.int-res.com/abstracts/meps/v542/p167-186/">OGP infrastructure</a> in the over-fishing restoration efforts in the North Sea over the past 30 years – and, importantly, what will happen if we remove all of the structures. We also need to look at how these OGP structures have provided new habitats.</p>
<p>In other regions, the <a href="http://www.tandfonline.com/doi/abs/10.1080/00908320590943990">rigs-to-reef</a> concept, where infrastructure is either dragged near shore or left in place to form reefs, has been a useful strategy in the decommissioning process. After all, reefs are a prevalent ecosystem in these regions, predating OGP, and the infrastructure can provide the basis for new reef systems. We should consider whether sub-sea infrastructure – redundant or otherwise – that offers novel and productive habitats must be removed.</p>
<p>These are open questions, societal challenges, that we need urgently to face.</p>
<h2>Pragmatic decommissioning</h2>
<p>A dogmatic approach to decommissioning – one that insists that all infrastructure is completely removed – is likely to work against the original motivation of the regulations. We just don’t know what will be the impact on the existing environment of such a change – it might shift the system towards a “better” or “worse” state.</p>
<p>The one thing we know for sure about ecological systems is that they continuously change – so the notion of “returning” an ecosystem to a “pristine” state, while romantic, is not a useful way of looking at it. In fact, it is counterintuitive. This does not mean that we should adopt a <em>laissez-faire</em> approach, but that we should aim for a decommissioning process that maximises the health and resilience of the current ecosystem. </p>
<p>We need to develop a comprehensive environmental decision support system that considers what benefits the removal of each component might bring and what impact this might cause. </p>
<p>If things go ahead as planned, we are about to transform the North Sea into a giant demolition site, a process that will last for the next 20-40 years. Decommissioning on that scale has never been done <a href="https://www.ft.com/content/b3255c92-2bca-11e6-a18d-a96ab29e3c95">really</a>. The environmental impact of this new stage of human activity will not be trivial. It will affect both ecosystem functioning and species we care about, particularly those sensitive to noise, while also contributing substantially to carbon emissions. </p>
<p>The OGP infrastructure has been in place for decades, much of it acting as fisheries exclusion zones. Some might now sustain species and habitats crucial to ecosystem functioning. The benefits of complete removal, as originally intended, are therefore now less clear. We need a holistic approach to decommissioning that integrates the environmental costs and benefits at every level and doesn’t just assume that all of the infrastructure is “bad”. That way, the North Sea ecosystem stands the best possible chance of thriving into the future.</p><img src="https://counter.theconversation.com/content/63842/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Neilson has received funding from ITF for research on underwater cutting methods.</span></em></p><p class="fine-print"><em><span>David Lusseau and John Paterson do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Restoring the North Sea to a ‘pristine’ state isn’t necessarily the best thing for its eco-systems.David Lusseau, Professor of Behavioural Biology, University of AberdeenJohn Paterson, Professor, Co-Director, Centre for Energy Law, University of AberdeenRichard Neilson, Reader in Engineering, University of AberdeenLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/644092016-08-24T15:40:14Z2016-08-24T15:40:14ZIndependent Scotland might get away with a high deficit – if it’s feeling lucky<figure><img src="https://images.theconversation.com/files/135366/original/image-20160824-30209-hbujjz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">'Well do ya punk?'</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/eviloars/4781997884/in/photolist-8hyZno-a8L9Re-q3dn2F-9UPg3q-kiE6H-kiDVo-kiEW3-kiDpU-kiEwE-kiDJi-4MRXNc-kiEaP-aV77TX-b14gJ8-7JHmee-9tH6fx-j3eYpq-3sQLAP-9YFEs-8EVRmL-cBpedC-3t5N1u-5eXwEr-fkr4Fc-d3U44-cCpf45-9tZ4Fg-9tJy72-9tNjv8-3ry6gA-kiEoW-kiDx1-dW756q-4MRXrT-eLhLhJ-5Ys8xW-eoWED5-4sSs4A-otEXT-kiEF1-4MRYR4-dTBYRC-bSotGk-kiD9C-kiDMX-5ZpcCp-kiDRP-5smanB-kiDeV-8r5mvQ">Ariel Dovas</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The predictable result of Scotland’s <a href="http://www.gov.scot/Resource/0050/00504649.pdf">expenditure and revenue data</a> for 2015-16 is that its fiscal deficit is much worse than the UK as a whole. Why predictable? Well, the Scottish economy is much more dependent on the oil industry than the UK overall and the <a href="http://www.nytimes.com/interactive/2016/business/energy-environment/oil-prices.html?_r=0">collapse in</a> the oil price since 2014 has led to a massive collapse in the UK government’s revenues from taxing the industry’s profits. </p>
<p>Since most of the oil is produced from Scottish territorial waters, this collapse affects Scotland’s territorial accounts. In the past, higher tax revenues from oil broadly compensated for Scotland’s higher public spending per head to the tune of £1,200 a year, so that the Scottish deficit did not differ substantially from that of the UK. Now that the oil effect has virtually disappeared, Scotland’s fiscal deficit of 9.5% of GDP (or £14.8 billion) is more than double the UK equivalent of 4% of GDP.</p>
<p><strong>Scottish and UK deficits, 1998-2016</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/135369/original/image-20160824-30259-5ork18.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/135369/original/image-20160824-30259-5ork18.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/135369/original/image-20160824-30259-5ork18.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=322&fit=crop&dpr=1 600w, https://images.theconversation.com/files/135369/original/image-20160824-30259-5ork18.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=322&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/135369/original/image-20160824-30259-5ork18.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=322&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/135369/original/image-20160824-30259-5ork18.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=405&fit=crop&dpr=1 754w, https://images.theconversation.com/files/135369/original/image-20160824-30259-5ork18.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=405&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/135369/original/image-20160824-30259-5ork18.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=405&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="http://www.gov.scot/Resource/0050/00504649.pdf">Scottish government</a></span>
</figcaption>
</figure>
<p>Some of the spending attributed to Scotland is not under the control of the Scottish government. In the <a href="http://www.gov.scot/Resource/0050/00504649.pdf">latest calculations</a>, for example, Scotland is assumed to spend £3 billion on defence – its population share of total UK defence spending. An independent Scotland might choose to spend less on defence, but this could only make a modest dent in the total deficit.</p>
<p>For a more significant turnaround, Scotland would need to look to some of the bigger budget items such as health (£12.2 billion) and/or benefits and the state pension (£18.3 billion). On the revenue side, it could consider increasing existing taxes or introducing new ones. With the demise of North Sea oil, income tax (£12.2 billion) and VAT (£11.2 billion) account for 43% of Scotland’s total tax revenue of £53.7 billion.</p>
<p><strong>North Sea oil revenue 1998-2016</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/135370/original/image-20160824-30231-azugfb.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/135370/original/image-20160824-30231-azugfb.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/135370/original/image-20160824-30231-azugfb.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=396&fit=crop&dpr=1 600w, https://images.theconversation.com/files/135370/original/image-20160824-30231-azugfb.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=396&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/135370/original/image-20160824-30231-azugfb.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=396&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/135370/original/image-20160824-30231-azugfb.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=498&fit=crop&dpr=1 754w, https://images.theconversation.com/files/135370/original/image-20160824-30231-azugfb.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=498&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/135370/original/image-20160824-30231-azugfb.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=498&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="http://www.gov.scot/Resource/0050/00504649.pdf">Scottish government</a></span>
</figcaption>
</figure>
<h2>Abnormal possibilities</h2>
<p>Would an independent Scotland have to reduce this deficit? Obviously some countries run quite high deficits and function adequately even though they are highly indebted (<a href="http://www.tradingeconomics.com/italy/government-budget">Italy</a> and <a href="http://www.tradingeconomics.com/japan/government-budget">Japan</a> are good examples). But if it is running a deficit at all, Scotland would be dependent on loans from the money markets to keep its public services functioning. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/135367/original/image-20160824-30246-1n0knjc.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/135367/original/image-20160824-30246-1n0knjc.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/135367/original/image-20160824-30246-1n0knjc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=667&fit=crop&dpr=1 600w, https://images.theconversation.com/files/135367/original/image-20160824-30246-1n0knjc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=667&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/135367/original/image-20160824-30246-1n0knjc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=667&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/135367/original/image-20160824-30246-1n0knjc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=838&fit=crop&dpr=1 754w, https://images.theconversation.com/files/135367/original/image-20160824-30246-1n0knjc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=838&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/135367/original/image-20160824-30246-1n0knjc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=838&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Mmmm, austerity.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-145072465/stock-vector-illustration-of-bottle-pouring-medicine-syrup-in-spoon.html?src=Rh7XEA30FhnewgoT-5nlZQ-1-88">Vectomart</a></span>
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<p>In normal times, budget deficits around the current level would mean substantial, and probably unsustainable, debt interest charges for an independent Scotland. Eventually, if the market is unwilling to provide loan finance, bodies like the IMF pick up the pieces. But their medicine is likely to be pretty unpleasant involving tax increases and spending cuts. </p>
<p>On the other hand, these are not normal times in the money markets. The cost of government borrowing is currently at an historic low. Perhaps the Scottish government could borrow at rates that are higher than most other leading economies but are still affordable due to the generally <a href="https://www.ft.com/content/3db396e4-3f5d-11e6-8716-a4a71e8140b0">low yields</a> on sovereign bonds. </p>
<p>Caution might suggest this would be a risky strategy given that we have no idea how long these “abnormal” conditions will persist. Some supporters of independence will no doubt believe that it is a risk worth taking.</p><img src="https://counter.theconversation.com/content/64409/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Bell does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Scotland’s numbers look far worse than the UK’s.David Bell, Professor of Economics, University of StirlingLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/552512016-03-03T12:37:17Z2016-03-03T12:37:17ZOil rigs are built to withstand decades at sea – taking them apart is as tough as they are<p>More than 40 years since oil <a href="http://news.bbc.co.uk/onthisday/hi/dates/stories/november/3/newsid_2538000/2538155.stm">first flowed from the Forties oil field</a>, many North Sea fields are coming to the end of their productive lives. This means that platforms must be decommissioned and dismantled, the wells capped. But when a rig is built to withstand all the elements can throw at it, they’re not going to come apart easily.</p>
<p>Oil companies must remove all structures installed at sea, as required by the <a href="http://www.legislation.gov.uk/ukpga/1998/17">Petroleum Act 1998</a> and <a href="http://www.ospar.org/work-areas/oic/installations">decision 98/3</a> of industry body OSPAR, and return the seabed to its original state. This agreement came about partly as a consequence of the <a href="http://news.bbc.co.uk/onthisday/hi/dates/stories/november/3/newsid_2538000/2538155.stm">controversy over Brent Spar</a>, a floating storage tank belonging to Shell that the regulator had agreed could be sunk at sea. The platform was occupied by Greenpeace in 1995 who questioned Shell’s assessment that it would pose little environmental threat, eventually forcing the company to bring the platform to shore for dismantling. </p>
<p>While the regulations’ aims are laudable, the fact is that many structures dating from the 1970s were designed and built with little concern for their eventual end of life. In the intervening decades the North Sea has changed – it’s not clear what returning the seabed “to its original state” really means now. And, leaving environmental issues to one side, removing thousands of tonnes of steel and concrete in the middle of a heaving North Sea swell is a considerable challenge in itself. The water is not particularly deep – most North Sea rigs stand in water depths of 200m or less – but they were designed to be tough. </p>
<h2>Above the surface</h2>
<p>The process of removing the superstructure <a href="http://www.ingenia.org.uk/Ingenia/Articles/866">involves various approaches</a>. One is to break the structure into smaller pieces for removal by the platform’s own crane onto waiting ships, a technique known as “piece small”. </p>
<p>Alternatively the platform’s separate modules such as for drilling, storage or crew compartments are removed whole – effectively deconstructing the platform in the reverse order of that by which it was built. This requires a heavy floating crane ship and transportation barges. Usually the original lifting points used when the modules were fitted have corroded in the years since, or alterations to how the module was used have led to changes in their weight and balance – and this adds to the difficulty of attempting a heavy lift approach.</p>
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<p>The third alternative is to raise and move the platform intact, known as “single lift”. Until recently this was only an option for small platforms such as Shell’s <a href="http://www.consub.com/case-studies/shell-inde-decommissioning-project">Indefatigable installation</a>. However lifting contractor Allseas recently commissioned the largest lift vessel ever built, the twin-hulled, 382-metre-long and 124-metre-wide <a href="http://allseas.com/equipment/pioneering-spirit/">Pioneering Spirit</a>. Shell will use this huge ship to lift the 24,200-tonne superstructure of the <a href="http://www.bbc.co.uk/news/uk-scotland-scotland-business-32844552">Brent field’s Bravo and Delta platforms</a> in single lifts for recovery to shore.</p>
<p>There are additional challenges to think about: how to remove oil and gas residues so as not to pollute the seas, how to maintain power and stability, and in the case of the piece small approach – once the platform’s crane has removed most of the superstructure, what will remove the crane itself?</p>
<h2>Below the waterline</h2>
<p>Removal of the support sections under the sea, often built in the form of a <a href="http://www.esru.strath.ac.uk/EandE/Web_sites/98-9/offshore/steel.htm">steel jacket</a> made of steel pipes welded together, presents another set of technical difficulties. For example, Canadian Natural Resource’s <a href="http://www.cnrl.com/operations/international/north-sea">Murchison</a> installation at 27,600 tonnes is the largest “jacket” yet to be decommissioned – it has steel thicker than 80mm in some sections supporting the topside of 24,500 tonnes. Dating before the 1998 regulations, most of these steel jackets were not designed for removal. While Allseas’ Pioneering Spirit crane ship can lift platforms up to 25,000 tonnes – the weight of more than four Eiffel Towers – few were designed to be lifted out in one piece.</p>
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<p>During the <a href="http://www.offshore-technology.com/projects/hutton-field/">decommissioning of the North West Hutton</a> platform’s jacket, BP’s decommissioning team undertook 22 heavy lifts for the topside and 224 subsea cuts using a combination of diamond wire, abrasive water jetting and hydraulic cutting shears to remove 58 jacket sections. The lower parts of the legs were piled into the seabed and could not be removed, resulting in a potential shipping hazard and an exclusion zone. This has pros and cons, however: while trawlers cannot fish in these areas, there’s evidence to suggest that they <a href="http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0103709">benefit fish stocks</a>.</p>
<p>Some platforms, like those in Shell’s Brent field, even include concrete structures. At around 250,000 tonnes, there’s simply no way to remove these – they have in effect become the “new normal” for the seabed where they lie. Making these structures safe for shipping and ensuring minimal environmental hazards in the future is the best that can done for now.</p>
<p>There’s no single solution to the challenge of decommissioning an oil rig or platform. But the environmental concerns are very real, and with the cost of decommissioning Britain’s platforms <a href="http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11844812/Britain-cant-afford-to-write-off-North-Sea-oil-after-40-years.html">estimated at £40 billion</a> – a substantial portion of which will be borne by the UK taxpayer – it’s clear the industry, environmentalists and regulators need to work together to come up with new and better solutions.</p><img src="https://counter.theconversation.com/content/55251/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Neilson has received funding from ITF for research on underwater cutting methods.</span></em></p>There’s more to decommissioning an oil rig than just towing it away.Richard Neilson, Reader in Engineering, University of AberdeenLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/546862016-02-15T15:24:11Z2016-02-15T15:24:11ZDark predictions about North Sea oil look all too believable<figure><img src="https://images.theconversation.com/files/111370/original/image-20160212-32308-1h34vr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Sunset in Scotland?</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&searchterm=north%20sea%20oil&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=124714078">DabartiCGI</a></span></figcaption></figure><p>The oil price is <a href="http://www.macrotrends.net/1369/crude-oil-price-history-chart">struggling to</a> stay above US$30/barrel, little more than a quarter of the price 18 months ago. Recent forecasts for the UK industry have become much gloomier as a result. As recently as three months ago, industry association <a href="http://oilandgasuk.co.uk/product/op114/">Oil & Gas UK predicted</a> 79 platforms would close by 2024. Several major consultancies <a href="http://www.douglas-westwood.com/dw-monday-coming-decommissioning-boom-to-be-driven-by-uk/">have since</a> suggested <a href="http://www.ft.com/cms/s/0/37da458c-5b7f-11e5-a28b-50226830d644.html#axzz3zkwEHgAv">that it might be</a> more like twice that. So how pessimistic is it reasonable to be?</p>
<p>First the big picture. Since the first significant oil and gas production in the UK in the 1960s, 28 billion barrels of crude oil and more than 2.4 trillion cubic metres of gas <a href="http://www.ft.com/cms/s/0/ed241136-cab3-11e5-a8ef-ea66e967dd44.html#axzz3zkwEHgAv">have been</a> extracted, mostly from the North Sea. <a href="http://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html">According to</a> the latest estimates, a further 3 billion barrels of oil and 0.2 trillion cubic metres of natural gas are proven to be recoverable – <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/441082/UK_Oil_Reserves_and_EUR_2015.pdf">plus about</a> the same again in probable reserves. That may be a fraction of what has gone, but it still <a href="http://www.bbc.co.uk/news/business/market_data/commodities/143908/three_month.stm">amounts to</a> revenues of around £200 billion. </p>
<p>The viability of the sector fundamentally depends on the oil price. There are large discrepancies between what economists think will happen to the price next, but most agree it is unlikely to return to its <a href="http://www.macrotrends.net/1369/crude-oil-price-history-chart">pre-crisis level</a> of around US$110/barrel in the medium term. </p>
<h2>The UK reaction</h2>
<p>The immediate reaction of UK’s oil and gas producers <a href="https://www.gov.uk/government/statistics/oil-and-oil-products-section-3-energy-trends">has been</a> to continue production at the same pace. In the third quarter of 2015, total oil production increased by 7% year-on-year and drilling activity remained stable. That’s not to say there has been no reaction – 65,000 out of 440,000 jobs <a href="http://www.bbc.co.uk/news/uk-scotland-scotland-business-34193720">had gone</a> by last September and capital investment <a href="http://oilandgasuk.co.uk/wp-content/uploads/2015/09/Oil-Gas-UK-Economic-Report-2015-low-res.pdf">is thought to be</a> falling substantially. Without question, the business climate has fundamentally changed. </p>
<p>The high operating costs in the North Sea are a central concern. Even under more favourable prices, the industry would have a competitiveness problem relative to other regions. It <a href="http://oilandgasuk.co.uk/wp-content/uploads/2015/09/Oil-Gas-UK-Economic-Report-2015-low-res.pdf">costs around</a> £17 to extract a barrel of oil, among the highest in the world. </p>
<p>One telling statistic for the UK industry is that while its oil extraction cost was similar to that of Norway as recently as the mid-2000s, they have now sharply diverged (see chart below). One study has <a href="http://folk.uio.no/dilund/lessonsfromnorway_forthcoming.pdf">argued that</a> this is primarily because the Norwegian state bears a higher fraction of the exploration costs and thus takes some of the risks from producers. The UK industry is <a href="http://www.bbc.co.uk/news/uk-scotland-scotland-business-34193720">currently trying</a> to cut its unit cost to £15 by the end of this year, and has brought it down from a high of £20 in 2013, but even that may not be sufficient to sustain the industry in its current form.</p>
<p><strong>Average lifting costs around the world</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/111368/original/image-20160212-29175-42vntn.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/111368/original/image-20160212-29175-42vntn.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/111368/original/image-20160212-29175-42vntn.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=353&fit=crop&dpr=1 600w, https://images.theconversation.com/files/111368/original/image-20160212-29175-42vntn.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=353&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/111368/original/image-20160212-29175-42vntn.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=353&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/111368/original/image-20160212-29175-42vntn.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=444&fit=crop&dpr=1 754w, https://images.theconversation.com/files/111368/original/image-20160212-29175-42vntn.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=444&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/111368/original/image-20160212-29175-42vntn.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=444&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Values in barrels of oil equivalent (£).</span>
<span class="attribution"><a class="source" href="http://oilandgasuk.co.uk/wp-content/uploads/2015/09/Oil-Gas-UK-Economic-Report-2015-low-res.pdf">Wood Mackenzie</a></span>
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</figure>
<p>Compared to Oil & Gas UK’s November forecast of 79 platforms closing by 2024, consultancy Douglas-Westwood <a href="http://www.douglas-westwood.com/dw-monday-coming-decommissioning-boom-to-be-driven-by-uk/">now predicts</a> 146 platforms will go between 2019 and 2026, accounting for more than half of the removals between 2016 and 2040 (the total number of platforms is currently around 300). It says that ageing UK platforms “are uneconomic at current commodity prices, as a result of high maintenance costs and the expensive production techniques required for mature fields”. </p>
<p>Meanwhile Wood Mackenzie, another consultancy, <a href="http://www.ft.com/cms/s/0/37da458c-5b7f-11e5-a28b-50226830d644.html#axzz3zkwEHgAv">believes that</a> 140 offshore UK fields will halt production in the next five years – even allowing for the oil price to rebound to US$85. One consolation, <a href="http://www.douglas-westwood.com/dw-monday-coming-decommissioning-boom-to-be-driven-by-uk/">according to</a> Douglas-Westwood, is that larger platforms are likely to keep pumping in spite of low oil prices until the 2030s. This is because they have an additional role as stations through which smaller, newer platforms route their petroleum back to shore. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/111372/original/image-20160212-29188-eoulmm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/111372/original/image-20160212-29188-eoulmm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/111372/original/image-20160212-29188-eoulmm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/111372/original/image-20160212-29188-eoulmm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/111372/original/image-20160212-29188-eoulmm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/111372/original/image-20160212-29188-eoulmm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/111372/original/image-20160212-29188-eoulmm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/111372/original/image-20160212-29188-eoulmm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Crisis situation?</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&search_tracking_id=cd42WzGQlLKl26L-C-jWRA&searchterm=oil%20uk&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=136078472">cyberdog</a></span>
</figcaption>
</figure>
<h2>Critical condition</h2>
<p>Either way, the situation is looking critical. It is not easy to say how negative it is right to be – the discrepancy in the different oil-price forecasts is a good indication of how hard it is to foresee the future of the industry. But with the consensus that prices are not going to rise much for some time, the fact that these forecasts for UK activity are getting worse is probably the correct direction of travel. </p>
<p><a href="http://oilandgasuk.co.uk/wp-content/uploads/2015/09/Oil-Gas-UK-Economic-Report-2015-low-res.pdf">With around</a> 375,000 jobs directly or indirectly affected by the North Sea oil and gas industry, the health of the UK continental shelf is of the utmost importance to the economy. This is putting increasing pressure on the Westminster government to reduce the tax burden and support investments to make the business proposition more attractive. It started to react last year <a href="http://www.bbc.co.uk/news/uk-scotland-scotland-business-31940616">by reducing</a> the supplementary charge levied on oil producers from 30% to 20% and cutting the petroleum revenue tax from 50% to 35%. Time will tell if the UK government will do more at next month’s Budget. We would only note that it hasn’t done as much as Norway to help shoulder the burden of production costs. </p>
<p>Last month the UK government <a href="http://www.theguardian.com/uk-news/2016/jan/28/aberdeen-500m-investment-north-sea-oil-price-slump">announced</a> a £250m investment into Aberdeen to secure oil and gas jobs and help the economy to diversify – doubled by a parallel infrastructure investment from the Scottish government. </p>
<p>The emphasis on diversification reflects the fact that the authorities are increasingly acknowledging that oil and gas will not be the same driver in future, irrespective of the governments’ efforts. All the same, there is still an opportunity to soften the blow if the governments and the industry do what they can. Together with technological advances that have gradually made it possible to extract more oil more efficiently, the UK North Sea may still have some life in it yet. </p>
<p><em>Erkal Ersoy, manager of the Centre for Energy Economics Research and Policy at Heriot-Watt, also advised on this piece.</em></p><img src="https://counter.theconversation.com/content/54686/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Achim Ahrens collaborates with BP for the Statistical Review of World Energy, but the views expressed here are his own.</span></em></p><p class="fine-print"><em><span>António Carvalho collaborates with BP for the Statistical Review of World Energy, but the views expressed here are his own.</span></em></p><p class="fine-print"><em><span>Marco Lorusso collaborates with BP for the Statistical Review of World Energy, but the views expressed here are his own.</span></em></p>But will the rigs stop pumping?Achim Ahrens, Research Associate, Heriot-Watt UniversityAntónio Carvalho, Research Associate, Heriot-Watt UniversityMarco Lorusso, Research Associate, Heriot-Watt UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/344602014-11-20T06:06:00Z2014-11-20T06:06:00ZTime for UK to give Scotland what it voted for: more control over energy matters<figure><img src="https://images.theconversation.com/files/65017/original/image-20141119-31623-jm2vez.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Scottish energy: The status quo is not an option!</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-201397556/stock-photo-electricity-power-lines-scretching-acoss-rugged-countryside-in-perthshire-scotland.html?src=q1qvtZaVrLAd4OVITDXhRg-1-30">Cornfield</a></span></figcaption></figure><p>Amid the <a href="http://www.smith-commission.scot/wp-content/uploads/2014/11/Press-statement-submissions-published.pdf">14,000-plus</a> submissions to the <a href="https://www.smith-commission.scot">commission</a> tasked with producing a set of proposals for handing more powers to Scotland, some <a href="http://www.snp.org/media-centre/news/2014/oct/devolving-oil-tax-feasible-well-desirable">have proposed</a> devolving some control of energy. </p>
<p>Energy was one of the main battlegrounds on which the referendum was fought in September. Key points of contention included the future prospects for Scotland’s mature <a href="http://www.theguardian.com/business/2014/aug/18/oil-gas-forecasts-north-sea-pessimistic-scotland">oil and gas industry</a>, how Scotland’s renewables industry <a href="http://www.bbc.co.uk/news/uk-scotland-scotland-politics-26054455">would be funded</a>, and the <a href="https://theconversation.com/ed-daveys-claim-that-scottish-energy-bills-would-rise-after-independence-is-a-fantasy-25693">cost of</a> electricity consumer prices after independence. </p>
<p>We were consistently on the opposite side of the argument to the unionists, but we could all agree on one thing: Scotland would remain a very prosperous and energy-rich country for some time to come. </p>
<h2>The status quo</h2>
<p>Currently Westminster dictates energy policy, without taking into consideration Scottish priorities if it so wishes. Holyrood has got around this to some extent with its extensive planning powers, encouraging the expansion of renewables such as onshore wind and blocking nuclear new-build. </p>
<p>Yet it is inconceivable that energy policy will not feature highly in the Smith Commission’s deliberations. The reality is that 45% of Scots voted Yes to independence, and at least some of the majority who voted No appear to have been swayed late in the day by <a href="http://www.dailyrecord.co.uk/news/politics/david-cameron-ed-miliband-nick-4265992">the “vow”</a> by the leaders of the three main UK parties to grant “extensive new powers” to Scotland. Given that energy was so prominent in the debate, it is hard to see how the status quo can be allowed to continue. </p>
<h2>Petroleum control</h2>
<p>There is no reason why Holyrood should not have full responsibility for tax-raising from oil and gas production, especially where vast economic assets lie in already-established territorial waters. There appears to be <a href="http://www.snp.org/media-centre/news/2014/oct/snp-submission-smith-commission">much public support</a> for this to happen. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/65018/original/image-20141119-31623-149nrd0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/65018/original/image-20141119-31623-149nrd0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/65018/original/image-20141119-31623-149nrd0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/65018/original/image-20141119-31623-149nrd0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/65018/original/image-20141119-31623-149nrd0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/65018/original/image-20141119-31623-149nrd0.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/65018/original/image-20141119-31623-149nrd0.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/65018/original/image-20141119-31623-149nrd0.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Oil be damned!</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-124714078/stock-photo-image-of-oil-platform-during-sunset.html?src=2ZiVGwzzHdsFkWxLfFuXXQ-1-42">Dabarti CGI</a></span>
</figcaption>
</figure>
<p>If petroleum revenue control were devolved along with the other key taxes, it would also remove the debate about the “Barnett formula” mechanism by which the UK’s nations are funded. Instead Scotland would simply raise its own taxes and pay its way. <a href="https://theconversation.com/devo-max-in-scotland-would-be-disastrous-for-northern-ireland-and-wales-33276">Some argue</a> that any attractions of such a move are outweighed by the problems that it could cause Wales and Northern Ireland. But the UK’s leaders can’t have it both ways. This is the sort of change that Scottish No voters are entitled to expect for staying in the UK – it is clear that the whole system now needs rethinking. </p>
<h2>Regulatory control</h2>
<p>Scotland should also play a leading role in setting UK-wide energy policy and assisting Westminster in overseeing regulation. Scotland’s voice at the industry regulator Ofgem should be increased to that of a full partner, a co-driver in energy oversight – right now Scotland is not even a backseat passenger. </p>
<p>This is why years have passed without solving issues like poor grid connections to the <a href="http://www.scotsman.com/news/politics/top-stories/plea-to-improve-grid-connections-to-scots-islands-1-3551210">Scottish islands</a> and endless delays to <a href="http://renews.biz/62896/ofgem-pushes-transmit-to-2016/">proposals to reform</a> the transmission system that removes the bias against northern producers. There is already industry support for such change, as outlined in a <a href="http://www.scottishrenewables.com/news/scottish-renewables-post-referendum-paper-proposes/">recent policy paper</a> by industry association Scottish Renewables.</p>
<h2>Renewables control</h2>
<p>Finally Scotland should also have greater control over the Crown Estate, which manages licences for activities such as offshore renewables and salmon farming. As has been <a href="http://www.communityenergyscotland.org.uk/news/28-oct-2014-community-energy-and-the-smith-commission-today.asp?skip">argued by</a> Community Energy Scotland, Holyrood also needs specific funding to support onshore and marine renewables. There is no getting away from the fact that the Scottish government is much more committed to renewables while England is keener on nuclear power. The only way to allow both countries to pursue their own individual policy goals, while having a properly joined-up approach to national energy security, is to give Scotland greater say in these areas. </p>
<p>The cost consequences to this policy might not be palatable to everyone in the south of England, but the key issue has to be keeping the lights on across the entire UK – <a href="http://news.sky.com/story/1361787/energy-crunch-plan-to-keep-the-lights-on">not a foregone conclusion</a> by any means over the coming years. Scotland continues to demonstrate that its vast energy capacity has the power to help keep the lights on across the UK this winter. With wind turbines <a href="http://www.bbc.co.uk/news/uk-scotland-scotland-business-29889811">generating enough</a> electricity in October to power more than 3m homes or the equivalent of 126% of Scottish needs for the month, these kinds of surpluses <a href="https://theconversation.com/the-coalitions-attitude-to-renewables-and-scotland-is-a-risk-to-national-security-27666">are exported</a> to England. </p>
<p>The inconvenient reality is that England is electricity hungry, <a href="https://www.ofgem.gov.uk/ofgem-publications/88523/electricitycapacityassessment2014-fullreportfinalforpublication.pdf">currently requiring</a> as much electricity as it can possibly source from wherever it can. This means that more investment in onshore and offshore renewables would be a wise policy decision for all of the UK. So Westminster needs to start giving more weight to voices from north of the border when it comes to energy policy.</p><img src="https://counter.theconversation.com/content/34460/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Amid the 14,000-plus submissions to the commission tasked with producing a set of proposals for handing more powers to Scotland, some have proposed devolving some control of energy. Energy was one of the…Peter Strachan, Strategy and Policy Group Lead and Professor of Energy Policy, Department of Management, Robert Gordon UniversityAlex Russell, Head of Department of Management and Professor of Petroleum Accounting at Aberdeen Business School, Robert Gordon UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/284272014-06-25T05:05:26Z2014-06-25T05:05:26ZScottish independence is bad economics for three reasons<figure><img src="https://images.theconversation.com/files/52097/original/h8tyhfk7-1403626764.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Would the Scots be quids in after independence?</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/eltpics/7217826708/in/photolist-bZPfq5-bZPdk1-bZPiEm-bZPdXm-bZPpxw-5PWFSP-qguh9-7KuATW-b6PYMZ-b6PYBv-b6PZxr-b6PZhe-b6PZqP-b6PYUv-b6PZ9Z-b6PZRt-b6PYY6-b6PZJi-b6PZEg-b6PZ22-b6PZuK-b6PZdn-b6PZNk-b6PZmx-b6PZAx-b6PYKn-axXS1Y-bZPjhE-bZPb5u-cmdNX-pgxmv-5T1B1m-9EsfmP-9BwrBK-7Pph8U-8purRn-5gRibi-opFZF-4fYmU9-5ED4mr-2kvxjt-pgxaZ-egkhku-5EDqLq-5JRh8A-4GUezH-2zKW9g-PY9r4-aBBYgA-b6PYRK">Eltpics</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The recent publication of an <a href="http://cfmsurvey.org">extensive survey</a> of leading economists by the Centre for Macroeconomics showed that an overwhelming majority did not think Scotland would be better off if it were independent. A majority also indicated that ruling out a sterling zone currency union post independence is in the rest of the UK’s best interests. </p>
<p>In a <a href="https://theconversation.com/an-independent-scotland-would-have-a-stronger-economy-than-you-might-think-27845">recent contribution to The Conversation</a>, Andrew Hughes-Hallett, a member of the Scottish government’s <a href="http://www.scotland.gov.uk/Topics/Economy/Council-Economic-Advisers/FCWG">fiscal commission working group (FCWG)</a>, argued that the respondents to the survey were wrong on both counts.</p>
<p>He relied on three points to support his contention: that the nature and size of the fiscal deficit in Scotland would be different post-independence; that petroleum revenues are on an upward trajectory, which would further underpin an independent Scotland’s fiscal position; and that it would ultimately be in the UK’s best interests to agree a sterling monetary union, once you took game theory into account. </p>
<h2>Let’s get fiscal</h2>
<p>On the first point it was argued, “one has to reconstruct the national accounts to show what they would look like if Scotland were independent”. This clearly is not done in the article, and there is no source reference to indicate it has been done elsewhere. So resort is made to constructing some numbers that the author believes would underpin an independent Scotland’s fiscal position. He argued that this would produce a fiscal surplus of 1% of GDP post-independence, which contrasts with a <a href="http://www.scotland.gov.uk/Resource/0044/00446019.pdf">deficit of 8.3% for 2012/13</a>. </p>
<p>The numbers used to generate this surplus are, for example, repatriated taxes of £1bn from “cross border commuters”. No justification is given for the construction of this number. Presumably, it would be hugely offset by the fact that BP would continue to pay its taxes on North Sea oil revenue in the rest of the UK rather than in an independent Scotland. </p>
<p>It is also argued that the return of debt interest repayments would save £3bn. But what about the £6bn of annual debt payments the National Institute of Economic and Social Research has calculated an independent Scotland would have to pay to treasury? Scottish finance secretary John Swinney <a href="http://www.heraldscotland.com/politics/referendum-news/snp-will-borrow-billions-to-end-austerity-says-swinney.24490040">intends to</a> increase borrowing by 3% per annum in an independent Scotland. This presumably is also not factored in to the figures used to generate a fiscal surplus. </p>
<h2>Oil take the low road</h2>
<p>North Sea oil revenues are also projected to be more buoyant than in some independent estimates, <a href="http://www.heraldscotland.com/politics/referendum-news/obr-stands-by-oil-revenues-forecast.1398255790">such as those of</a> the Office of Budget Responsibility. Hughes-Hallett attributes the present fall in revenues to both the severity of the recent recession and the contention that oil producers have simply left oil in the ground in the North Sea due to a tax surcharge imposed in 2011 and 2012. From this it is conjectured that North Sea oil revenues will recover from £3.2bn in 2013/14 to £4.5bn-£5bn by 2016-2020.</p>
<p>But there are significant factors that could point to oil prices remaining depressed and indeed heading in a southerly direction. For example, the fracking of oil and gas in the United States <a href="http://www.bloomberg.com/news/2013-11-12/u-s-nears-energy-independence-by-2035-on-shale-boom-iea-says.html">may soon mean</a> it overtakes both Saudi Arabia and Russia as a hydrocarbon producer. This will undoubtedly have implications for the price of oil. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/52100/original/9vbtnvd9-1403627238.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/52100/original/9vbtnvd9-1403627238.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/52100/original/9vbtnvd9-1403627238.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/52100/original/9vbtnvd9-1403627238.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/52100/original/9vbtnvd9-1403627238.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/52100/original/9vbtnvd9-1403627238.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/52100/original/9vbtnvd9-1403627238.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/52100/original/9vbtnvd9-1403627238.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Tanks very much, Mr Salmond.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/leejordan/2358587281/in/photolist-4AqnPX-4AxGiu-4T5SNL-5DCsi3-4RS97y-KkDu9-7qZQsZ-4Vwqrw-588Wni-4VeGLs-4JaSCG-6gigqm-eM2Xr-daG6TA-8gLVh9-bVjdcF-bBcEL2-4hYZfU-4Xz2Fh-bmBHJd-bohM6C-4hYZk9-4hUTzF-57sTQw-5u4owD-4VygJ6-3eozvB-5vxVyF-oDcC3-5u4pbp-9cM9i1-4T9d4F-4KwSqV-4KB8nu-4NpTd8-4NuS8w-4KwSRM-4KBaLL-5u4oZB-5u8Nod-4KwTnM-5wK7Tg-8behAG-k5k65P-4KFndD-5YJZrC-9xGwm1-85fhmk-6hbbGA-484NyQ">Lee Jordan</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>There are also growing signs that the recovery from the great recession may stall both because of recent poor growth figures <a href="http://www.nytimes.com/2014/06/12/business/economy/us-economic-recovery-looks-distant-as-growth-lingers.html?_r=0">in the US</a> and <a href="http://www.morningstar.co.uk/uk/news/AN_1403521364780641300/european-markets-weak-after-eurozone-economic-growth-slows.aspx">the EU</a>; and from concerns that any nascent growth that we observe today in the world economy is, as the IMF <a href="https://www.blanchardgold.com/investment-news/the-longview/dangerous-housing-bubble-forming-worldwide-imf-warns/">has recently documented</a>, being driven by a worldwide housing bubble which needs to be burst.</p>
<p>Oil prices are volatile and any sensible risk assessment should take a cautious risk-averse view of where they are headed. This is what the Office of Budget Responsibility tries to do in its studies. Taking all of the above together, I believe that an independent Scotland will have a significant fiscal deficit, a finding supported by all independent analysts.</p>
<h2>The pound won’t abound</h2>
<p>The Scottish government’s preference is for a sterling monetary union post-independence and it argues this is based on the work of its fiscal commission working group. In <a href="http://www.scotland.gov.uk/Publications/2013/02/3017">its report last year</a>, the group used the so-called optimum currency area criteria to argue in favour of a sterling currency union. But as I and others point out, the group simply chose the criteria that gave them this result and ignored the criteria which would lead them to a very different result.</p>
<p>For example if an independent Scotland were to have a geographic share of North Sea oil, as planned, it would become a net exporter of hydrocarbons and its biggest trading partner would become a net importer of hydrocarbons. That means that Scotland would be subject to <a href="http://www.investorwords.com/15179/asymmetric_shock.html">asymmetric shocks</a> in periods where the oil price became unduly strong or weak, which would mean it would not be an optimum currency area with the UK. </p>
<p>The Scottish government has also indicated that it would attempt to increase both productivity growth post-independence and also grow GDP per capita at 3% per annum. Part of the justification for a currency union is in terms of having similar levels of productivity and GDP per capita; if the Scottish government changes these, it would make Scotland inconsistent with the union and would mean that the currency area would no longer be optimum. </p>
<p>It is presumably for these reasons that Hughes-Hallett has now abandoned the optimum currency area analysis used by the group and uses the “lens of game theory” to justify a sterling currency union. The nub of the argument seems to be that if Westminster did not accede to an independent Scotland being part of a sterling monetary union, Scotland could adopt the pound anyway along the lines of the way Ecuador uses the US dollar or Montenegro the euro. By doing so, he claimed, Scotland would be “unambiguously better off: more policy instruments to reach the same targets.”</p>
<p>But an informal form of sterlingisation – the Panama option – is a vastly inferior option to a formal monetary union, as indeed the fiscal commission working group recognises. Yet it suffers from the same basic problem of exchange rate fixity and the inability to address changes in competitiveness. As Paul Krugman and others <a href="http://www.npr.org/2011/01/25/133112932/paul-krugman-the-economic-failure-of-the-euro">have argued</a>, a key reason why currency unions, and other forms of fixed rate systems, break up is that such currency locks cannot cope with the competitiveness strains placed on them. </p>
<p>Taking recent IMF numbers for the costs of currency crisis, it is straightforward to show that maintaining the sterling zone currency union would cost an independent Scotland in the region of £25bn-£35bn, but could easily cost two to three times these numbers. The cost to the UK would be even greater. You don’t need to be a game theorist to work out that such a currency union is not in anyone’s interests. </p>
<p>On the other hand if Scotland did choose the inferior and informal Panama option, the costs of the inevitable currency crisis would presumably be borne by the Scottish taxpayer. In that situation, rUK would be unambiguously better off. </p><img src="https://counter.theconversation.com/content/28427/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ronald Macdonald does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The recent publication of an extensive survey of leading economists by the Centre for Macroeconomics showed that an overwhelming majority did not think Scotland would be better off if it were independent…Ronald Macdonald, Adam Smith Chair of Political Economy, University of GlasgowLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/211972013-12-05T14:42:32Z2013-12-05T14:42:32ZCompel firms to extract North Sea oil in the nation’s interest<figure><img src="https://images.theconversation.com/files/37035/original/nw78vwfq-1386248624.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">There's more oil down there, and it's the regulator's job to make sure it comes up.</span> <span class="attribution"><span class="source">AP/PA</span></span></figcaption></figure><p>For decades the UK has been accustomed to filling its coffers with the bounty from North Sea oil and gas, and the jobs and tax receipts it has brought. At one time exports helped balance the books and provided energy security on our doorstep. But production peaked at the equivalent of 4.72 million barrels per day in 1999 and the subsequent decline has in recent years accelerated, as the figures from <a href="http://www.bp.com/en/global/corporate/about-bp/statistical-review-of-world-energy-2013.html">BP’s statistical review of world energy 2013</a> show (below).</p>
<p>These days the UK is a net importer of oil and gas, and coal, accounting for £22 billion of the <a href="http://www.parliament.uk/briefing-papers/SN02815">£59.8 billion</a> deficit in the 2012 balance of payments. These spiralling energy costs are what led the energy minister, Ed Davey, to invite Sir Ian Wood to conduct a review of the North Sea oil industry in order to make recommendations that would ensure the maximum resource is recovered from the North Sea. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/37026/original/bvd7btf6-1386239110.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/37026/original/bvd7btf6-1386239110.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/37026/original/bvd7btf6-1386239110.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=529&fit=crop&dpr=1 600w, https://images.theconversation.com/files/37026/original/bvd7btf6-1386239110.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=529&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/37026/original/bvd7btf6-1386239110.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=529&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/37026/original/bvd7btf6-1386239110.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=664&fit=crop&dpr=1 754w, https://images.theconversation.com/files/37026/original/bvd7btf6-1386239110.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=664&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/37026/original/bvd7btf6-1386239110.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=664&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">UK oil and gas production (in million barrels per day or gas equivalent) from BP.</span>
<span class="attribution"><span class="source">Euan Mearns</span></span>
</figcaption>
</figure>
<p>It’s worth noting that Sir Ian’s <a href="http://www.woodreview.co.uk/">interim report</a>, published in November, presents a figure of 41 billion barrels equivalent to the end of 2012, while the official government estimate is 42 billion, and BP’s data suggests 43.6 billion (based on BP’s conversion ratio of 1 billion cubic metres of gas = 6.6m barrels of oil). Since statistics are very important (and an error margin of a billion or two is fairly significant), the Wood Review might want to start by addressing the quality of energy reporting standards.</p>
<p>Sir Ian’s review team interviewed 40 companies that account for 95% of the North Sea’s oil production and examined the Department of Energy and Climate Change’s role as regulator. They found that the conflicting private interests of the many private companies extracting resources from the UK continental shelf do not necessarily line up with the UK’s sovereign interest in extracting the most resources possible. The report found DECC as regulator was “significantly under-resourced and under-powered to effectively manage” North Sea operations. </p>
<p>Looking at the department’s <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/249854/decc-organogram.pdf">organisational structure</a> you have to look hard to find three posts of 109 that are assigned to oil and gas – extraordinary considering the North Sea meets two-thirds of UK oil and half of UK gas demand. Only 50 personnel are assigned to the task of overseeing more than 300 UK oil and gas fields, compared with 220 personnel in Norway and 100 in The Netherlands.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/37027/original/2xk8w7pr-1386240779.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/37027/original/2xk8w7pr-1386240779.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/37027/original/2xk8w7pr-1386240779.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=436&fit=crop&dpr=1 600w, https://images.theconversation.com/files/37027/original/2xk8w7pr-1386240779.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=436&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/37027/original/2xk8w7pr-1386240779.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=436&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/37027/original/2xk8w7pr-1386240779.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=547&fit=crop&dpr=1 754w, https://images.theconversation.com/files/37027/original/2xk8w7pr-1386240779.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=547&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/37027/original/2xk8w7pr-1386240779.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=547&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Value vs cost of energy imports and exports to UK, from DECC figures.</span>
<span class="attribution"><span class="source">Euan Mearns</span></span>
</figcaption>
</figure>
<h2>Enforcing collaboration for the UK interest</h2>
<p>A key recommendation of the report is to create a new “arms-length” regulator staffed by top industry professionals and funded by the industry itself. It would promote and facilitate collaboration between licence holders to develop resources that are currently stranded and ensure the maximum return for the UK over the next 30 years.</p>
<p>For example a small field may lie close to a platform owned by a third party or parties. The new regime would require the platform owner to assist the field owner to bring the field into production to the benefit of both parties and the State.</p>
<p>The report lists eight commitments that operating companies would be expected to make, including commitments to Maximum Economic Return for the UK, infrastructure sharing, and collaborative working with the regulator and each other.</p>
<h2>How much more oil is there?</h2>
<p>The interim report suggests there is the potential to extract at least 3 to 4 billion barrels of oil more than would otherwise be recovered, worth around £200 billion to the UK’s economy at today’s prices.</p>
<p>One of my main criticisms of the report is that it does not define what “would otherwise be recovered” actually means. I have suggested that <a href="http://euanmearns.com/?p=1183">UK Oil and Gas Reserves</a> would produce about 4.5 billion barrels at current extraction rates, similar to proven reserves reported by DECC and BP. So “3-4 billion more” would mean around 8.5 billion barrels if Sir Ian’s recommendations were to be implemented, totalling perhaps 10 billion if we reasonably allow a further 1-2 billion more in reserves yet to be found. There will be one or two undiscovered giant fields lurking out there somewhere.</p>
<p>Sir Ian is explicit about where this additional oil comes from, naming enhanced oil recovery (1-6.5 billion in best case scenario), increased exploration (1-1.5 billion), better use of infrastructure (0.5-2 billion), and postponing decommissioning by five years (1 billion).</p>
<p><a href="http://energy.gov/fe/science-innovation/oil-gas/enhanced-oil-recovery">Enhanced oil recovery</a> is necessary to retrieve the remnants of oil from mature fields. The bulk of the oil is left behind as micro-droplets either stuck to mineral grains or encased by water in rock pores. A variety of chemical methods can be used to get this oil moving up to the surface. For example, BP injects methane gas in the <a href="http://pgc.lyellcollection.org/content/6/469.abstract">Magnus Field</a>, and is proposing to inject fresh, as opposed to salt, water in their <a href="http://www.rigzone.com/news/oil_gas/a/120509/BP_Uses_Enhanced_Oil_Recovery_Technology_at_Clair_Ridge">west of Shetland fields</a>. Potentially the greatest reward comes from injecting CO<sub>2</sub>. In my opinion, the government would do well to divert its attention from carbon capture and storage to using CO<sub>2</sub> for enhanced oil recovery.</p>
<p>But Sir Ian also estimates “a further 12-24 billion” barrels, without giving any reference or figures. If state regulation of the North Sea and operating practises of the companies are to be overhauled then there <em>must</em> be a means for measuring the effectiveness of Sir Ian’s changes. We need to know what will happen if we do nothing – and what will happen if we act boldly and quickly as he proposes.</p><img src="https://counter.theconversation.com/content/21197/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Euan Mearns does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>For decades the UK has been accustomed to filling its coffers with the bounty from North Sea oil and gas, and the jobs and tax receipts it has brought. At one time exports helped balance the books and…Euan Mearns, Honorary Research Fellow, University of AberdeenLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/156352013-07-02T05:54:02Z2013-07-02T05:54:02ZThe oil industry has yet to learn lessons of Piper Alpha<figure><img src="https://images.theconversation.com/files/26511/original/mmm2fv6y-1372591225.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The offshore industry need not be so dangerous if safety is put first.</span> <span class="attribution"><span class="source">PA</span></span></figcaption></figure><p>The explosions and fire that completely destroyed the North Sea oil rig Piper Alpha and cost 167 workers their lives remains the world’s worst offshore oil disaster. Saturday, July 6, marks <a href="http://news.stv.tv/north/229751-health-and-safety-to-mark-25th-anniversary-of-piper-alpha-disaster/">25 years</a> since the disaster in 1988.</p>
<p>The resulting public inquiry under judge Lord Cullen was to be the bible for renovating offshore safety worldwide, yet there have been many subsequent accidents since. The recent review into the <a href="http://news.bbc.co.uk/1/hi/world/americas/8634874.stm">Deepwater Horizon</a> oil rig fire in 2010 which killed eleven offshore workers and spilt nearly five million barrels of oil into the Gulf of Mexico conjures an overpowering sense of déjà vu. There is a feeling that, once more, the loss of life was preventable.</p>
<p>Again, there is the same lethal cocktail of contingent circumstances and systemic underlying causes; multiple safety systems that did not function at the crucial moments, managerial failures immediately before and during the unfolding disaster, organisational failures embedded in distorted information flows and a lack of coherent safety management, defective regulatory authorities with contradictory responsibilities for both production and safety, and even the outright “capture” of regulatory processes by the industry itself.</p>
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<p>Yesterday the North Sea, today the Gulf of Mexico, tomorrow some remote province in a compliant developing state? The same common thread continues seemingly unchecked. It is as if the “offshore” in offshore oil is emblematic of more than simply spatial separation, but instead represents something akin to a zone of exclusion, beyond the horizon of effective oversight that we rely on government to exercise on our behalf as citizens.</p>
<p>Business schools now incorporate the Deepwater Horizon disaster into their classic <a href="http://www.hbs.edu/faculty/Pages/item.aspx?num=39501">case studies</a> of corporate responsibility failures and, in BP’s case, of belated corporate contrition. The US Justice Department meanwhile <a href="http://www.ft.com/cms/s/0/27327240-f6c9-11e1-827f-00144feabdc0.html#axzz2XoyEueKR">has indicted BP</a> for its “culture of corporate recklessness” amounting to “gross negligence and wilful misconduct”. It levied the <a href="http://online.wsj.com/article/SB10001424127887324556304578120140555122104.html">largest fine</a> in US criminal history and company personnel continue to face serious criminal charges including manslaughter. Regrettably, the owner of Piper Alpha, Occidental Petroleum, was not held accountable. One hopes that such impunity is no longer the norm.</p>
<p>However, the focus on BP and/or its partners Halliburton and Transocean obscures a more fundamental question. How could the safety regime in the US offshore oil industry have remained apparently impervious to the lessons of previous disasters? Were the safety standards on this rig so far below the prevailing norms in the industry? One suspects that many operators and contractors, as at the time of Piper Alpha, are today thankfully whispering in private “there but for fortune…”</p>
<p>That each disaster was avoidable is, in retrospect, a truism. That each was foreseeable is equally so, but we repeatedly find that workers in the industry had fears for their safety but lacked confidence to express their concerns without fear of retribution. Why has safety remained an intractable issue in the offshore oil industry? Even as Piper visibly burned, the failure of the linked Tartan platform to shut down its flow of oil and gas was illustrative of the paralysing effect of an industry mind-set that could not contemplate shutting down production, since the enormous losses entailed would surely bring career-ending consequences to the individual who took such a momentous decision. Today the talk is of safety first, production second, but it would need to be a brave person to hit that button.</p>
<p>The pioneering scholar of offshore safety, Professor WG Carson, spoke tellingly in his book “The Other Price of Britain’s Oil” of a “political economy of speed” that prioritised profits over safety. The same attitude – production first - is just as evident today. Seven out of nine key decisions adopted in the drilling operation that led inexorably to the Deepwater catastrophe were identified by the Presidential Commission report as dictated by the desire to “<a href="http://www.bbc.co.uk/news/world-us-canada-12124830">save time</a>”. The Commission identified “elevating the goal of expeditious… development above the requirements of safety and environmental protection”. But there is also the broader imperative driven by governments’ desire for lucrative oil revenues and the rapid exploitation of safe offshore oilfields.</p>
<p>Professor Carson identified what he called “institutionally tolerated non-compliance” of regulatory requirements. Weak regulators either turned a blind eye to violations, or simply shared the opinion that production trumps all other considerations. Carson predicted this would inevitably lead to a major safety failure in the North Sea - a decade before Piper Alpha was destroyed.</p>
<p>It seems that in key respects not much has changed. In the memorable, damning words of the <a href="http://templatelab.com/deepwater-report-to-the-president-final-report/">Presidential Commission</a>: “efforts to expand regulatory oversight, tighten safety requirements, and provide funding to equip regulators with the resources, personnel, and training needed to be effective were either overtly resisted or not supported by industry, members of Congress, and several administrations”.</p>
<p>Today, the lethal legacy of a long era of deregulation in the US that was exported worldwide continues to take its toll on workers’ lives, the environment and communities. Whether this unpalatable truth will ever be accepted among those with the power to enforce corporate accountability that would protect people first and profits second remains to be seen.</p>
<p>In the North Sea, regulatory reconstruction has produced a new safety regime. Its robustness has been constantly scrutinised and remains contested. There have been a number of <a href="http://www.dailymail.co.uk/news/article-2121457/North-Sea-gas-leak-threatens-repeat-Piper-Alpha-oil-rig-disaster-Aberdeen.html">near-Piper Alphas</a> which only luck prevented from becoming full-scale disasters. The hope is that the post-disaster reconstruction of the US regulatory regime will produce effective root-and-branch reform. Close observers remain less than sanguine. Appalling though it may be to contemplate, until public policy-makers and governments show sufficient resolve in confronting the power of the multinationals which dominate the industry, and until the lessons of previous preventable disasters are learned, there will be the potential for many more human tragedies.</p>
<p>While nothing in this industry may ever match the enormity of Piper Alpha and the legacy of suffering it bestowed, each and every life lost in the course of daily work is unacceptable. Accidents don’t just happen, even in a dangerous and risk-laden industry. Accidents are the outcome of a pattern of corporate managerial mis-behaviours which in principle need not have occurred had the proper incentives and procedures been in place.</p>
<p>Ultimately, the lesson of corporate failure is that management must bear the responsibility for managing in a safe and environmentally appropriate manner. This did not happen in the case of Piper Alpha and it would appear from Deepwater Horizon that some industry management is still reluctant to live up to its obligations.</p>
<p><em>This is an edited version of an article that first appeared in the July edition of Safety Management magazine</em></p><img src="https://counter.theconversation.com/content/15635/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Charles Woolfson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The explosions and fire that completely destroyed the North Sea oil rig Piper Alpha and cost 167 workers their lives remains the world’s worst offshore oil disaster. Saturday, July 6, marks 25 years since…Charles Woolfson, Professor of labour studies, Linköping UniversityLicensed as Creative Commons – attribution, no derivatives.