Here to stay or gone in 30 years?
Fight Over The Oil
There is a growing movement in Aberdeen to lead the transition from Big Oil to Big Energy, using its deep-sea expertise to build floating wind farms alongside offshore rings.
“I think 2015 was the wake-up call that Aberdeen actually needed to say, ‘This is not going to last forever,” said Russel Borthwick, the local chamber of commerce’s chief executive. But it is not yet clear whether the North Sea can successfully turn away from its oil roots and be an example for the rest of the world.
Companies in the region are determined to keep working. They say that the money from gas and oil is necessary to fund new renewable investments and emphasize that the United Kingdom still use fossil fuels to heat homes and keeps the lights on, pointing out the anxiety around an energy crisis that is rising in Europe.
Shell, together with Backstone-backed Siccar point, is still waiting for the government’s approval to launch a new North Sea oilfield project known as Cambo, which will produce oil until 2050.
The business of oil and gas | Fight Over The Oil
The United Kingdom’s North Sea accounts for silver of global gas and oil output but remains an investment hub for both domestic and international oil companies. While the basin is nearing the end of its lifecycle, it still holds 4.4 billion barrels of oil equivalent, according to the UK’s oil and gas regulator. OGUK estimates that $534 billion has been invested off the coast of the United Kingdom over the last 50 years.
Companies like Shell emphasize that what will really help the world decarbonize is a “fundamental shift in demand” from its customers, which range from big businesses in shipping and aviation to commuters filling up their tanks at gas stations.
An empirical debate | Fight Over The Oil
Funding troubles and the treat of tougher government policies have sparked an existential debate within the oil and gas industry. The biggest multinational companies in Europe, including Shell, BP, Eni, and Total (TOT) have started to reorient their businesses around this reality, pledging to reach net-zero emissions by 2050.
The target includes the carbon released when products are burned. The pledges are positive steps, according to climate experts, though each comes with its own loopholes and qualifications. Shell has disclosed that it reached its maximum oil production in 2019. That output will now fall 1% to 2% annually.
National oil companies, which account for more than half of global production, have been among the most reluctant to address climate change. Saudi Aramco, Saudi Arabia’s state producer said earlier this month that it would target net-zero emissions for its operations by 2050, but the IEA has warned this group is “poorly positioned to adapt to changes in global energy dynamics.”
Not everyone thinks that the UK’s transition is happening fast enough, especially given its resources and commitment to staying ahead of the pack on climate issues.
Meanwhile, a British regulator recently blocked Shell’s plan to develop the Jackdaw gas field in the North Sea on environmental grounds.
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