The coronavirus pandemic, together with a global collapse in oil price, has seen the offshore industry experience hugely turbulent times during the first half of 2020.
As if these issues weren’t enough to deal with, the challenge of a generation remains: how to manage an effective, smooth energy transition to a net zero future.
The Just Transition Commission, which I am part of, has been set up by the Scottish Government to give recommendations on how to manage the transition to a net-zero carbon country by 2045. The commission’s job is to advise and help government design policies in a way that ensures the benefits of transition are shared widely and that the costs do not unfairly burden those least able to pay, or whose livelihoods may be at risk as the economy changes.
The scale of climate change action required is immense but wholly necessary to safeguard our long-term future. The concept of a just transition recognises that while the move to net-zero is vital, it must not be inequitable.
Many of the challenges and opportunities are clear – for example, supporting the energy sector to transition to a net-zero future, while developing the workforce’s skills and maintaining jobs. The £62 million Energy Transition Fund recently announced by the Scottish Government will enable a government/industry partnership to deliver the technology and projects required for the transition, while capitalising on the skills and depth of expertise present in the offshore industry.
The challenge ahead of us highlights the need for a collaborative approach between energy sectors if we are to succeed. This is an opportunity to work together to reimagine the North Sea as an integrated energy zone. A basin that can deliver clean hydrocarbons to enable the growth of the renewable sector, particularly floating wind, while also transitioning to a new future of hydrogen generation and carbon sequestration.
The demand for low carbon technologies will inevitably increase over the coming years and much work is being done to develop carbon capture and storage, expand offshore wind and ramp up progress of cost competitive hydrogen opportunities.
The OGTC is already supporting several high-potential technology projects, and we are working on creating critical cross-industry alliances supported by government collaboration to help unlock the value of a net zero economy for the industry and the UK.
To deliver a sustainable industry, leaders must commit fully to a net zero future and use their skills, talent, power and influence to help get us there.
The global pandemic has completely overtaken so many governmental priorities that it seems a monumental task to return to the “normality” of a few short months ago.
But if there is opportunity in adversity, it comes from being forced to think differently about how we emerge from the crisis – re-shaping our national energy needs and building an economy based on a net zero ethos. There is no reason we cannot create new jobs and opportunities that will make us internationally competitive as the world moves forward.
Society will continue to rely on oil and gas and the expertise of the companies and people employed in the sector to enable the expansion of offshore wind, hydrogen and carbon capture usage and storage, and the pace of change will likely be accelerated as we emerge into a post-COVID 19 world.
The Just Transition Commission has been seeking views on how a transition to a net zero economy can be delivered fairly and in a way that benefits everyone. Oil and gas companies have a crucial role to play in shaping these priorities, including the transition of jobs and skills, and the technology needed to make the transition to a net zero economy.
You can ensure energy sector voices are heard by responding to the Commission’s public Call for Evidence at https://consult.gov.scot/just-transition-commission/just-transition-commission-call-for-evidence/ by 30 June.