There are plans to ban the sale of new petrol and diesel cars by 2030 and build the transport future around electric vehicles. The UK government’s 10-point plan will see £12 billion ($16 billion) invested in tackling climate change by quadrupling offshore wind production. It aims to turn the City of London from a fossil fuel center into a global focal point for green finance. Prime Minister Boris Johnson wants to advance zero-emission planes and ships while insulating homes and boosting nuclear power. All of these changes will affect the oil and gas sector at a time of weak crude prices due to the Covid-19 pandemic, as operators face severe financial problems. The UK North Sea oil industry has in 2020 seen the lowest level of drilling for half a century, according to lobby group Oil & Gas UK (OGUK). The group suggests in its latest report that there could be no further UK North Sea exploration drilling this year. Meanwhile BP — historically the flagship British oil company — has just confirmed it plans to sell its London headquarters to cut costs.
There are also significant opportunities for the gas industry in particular, with plans to get a much-talked-about hydrogen industry off the ground in the UK. The government wants 5 gigawatts of hydrogen production by 2030 for heating homes. Ministers also promise to establish a “world-leading industry in carbon capture and storage” backed by £1 billion of public cash. The UK committed to net zero carbon emissions by 2050 in its own Climate Change Act 2008 and is now trying to set a pathway to achieve that. The local oil and gas industry need to play its role in that, as Michie accepts, by harnessing its huge project-development expertise in a greener direction. UK North Sea as an oil and gas exploration basin can only ever recover with the help of higher oil prices plus government and public support. Otherwise, the future for the UK offshore oil industry could be largely built around the decommissioning of platforms and pipelines. The wider business community sees the UK green industrial revolution as a major step in the right direction, but some environmentalists dismiss it as “too little, too late”. Oil and gas companies will surely see it as neither of those things, but just a signpost to a more precarious but inevitable future.