The NSTA published the OGA plan to reduce UKCS greenhouse gas emissions on 27 March 2024 , which identifies the "steps necessary for emissions reductions pathways".
The plan sets out the requirements for relevant persons to follow, relevant persons being:
- holders of petroleum licences;
- operators under petroleum licences;
- owners of upstream petroleum infrastructure;
- persons planning and carrying out the commissioning of upstream petroleum infrastructure; and
- owners of relevant offshore installations.
Those requirements fall into four broad categories:
1. Investment and Efficiency
Relevant persons must produce an Emissions Reduction Action Plan (ERAP) for each asset summarising (among other things) applicability of emissions abatement and emissions monitoring opportunities, together with planned emissions reductions initiatives. The ERAP must be implemented in a timely manner and substantial emissions reductions must be reported to the government's Environmental and Emissions Monitoring System (EEMS). In support of this requirement, NSTA will continue sharing insights and key benchmarking data and will provide further instructions on the associated reporting requirements.
2. Electrification and low carbon power
You may recall from the Brodies' Energy Academy session in March 2024 that the draft plan paid specific attention to electrification. This has now been formalised in the final version, meaning that it now underpins the strategy and has binding effect on the industry.
The consultation responses on electrification as proposed in the draft plan identified that respondents "generally agreed that electrification should be considered within a portfolio of decarbonisation solutions, though many respondents were concerned that the draft plan may place an over-reliance on electrification, to the detriment of the overall basin emissions reduction progress".
On the basis of that feedback, the NSTA has maintained the plan's requirements in respect of electrification but with some clarifications. Primarily, it is no longer just an electrification requirement, but an electrification and low carbon power requirement, which brings a degree of flexibility. In addition, the NSTA has added commentary noting that it "recognises that in particular cases relevant persons may be able to demonstrate that, despite their best endeavours in the circumstances, solely due to factors outside their control, including for example the non-availability of grid connections, it may not be possible to take the full actions set out in the requirements."
Further updates have been made from the initial draft when compared to the finalised plan, and it is encouraging to see the NSTA taking onboard industry feedback. The plan sets out the following specific requirements:
- New developments with a first oil or gas date after 1 January 2030 must be either fully electrified or run on alternative low carbon power with near equivalent emission reductions;
- New developments, excluding tie-back developments, with a first oil or gas date before 1 January 2030 should generally, at a minimum, come online electrification ready;
- Relevant persons must provide a comprehensive technical and economic assessment of all potentially available electrification schemes and associated emissions reductions before submitting their Field Development Plans (FDPs)/ FDP Addendums (FDPAs) Concept Select – lower emitting proposals will be favoured;
- All assets intending to produce oil or gas beyond 1 January 2030 must have ERAPs that include a comprehensive technical and economic assessment of both full and partial electrification;
- Financial investments must be made to electrify all assets where it is reasonable to do so – reasonableness being assessed by balancing total remaining reserves and resources that will or may be produced and the expected emissions against the expected cost of electrification;
- Where the NSTA considers that it is reasonable to electrify an existing asset, but relevant persons have chosen not to electrify, there should be no expectation that the NSTA will approve FDPs or FDPAs;
- Where the NSTA considers it not reasonable to electrify an existing asset, relevant persons must still pursue other power emissions reductions.
3. Inventory
The NSTA is clear on having a dual focus of maintaining oil and gas production and driving down emissions across the UKCS. Therefore, this requirement addresses bringing forward the cessation of production (CoP) on low producing installations to make way for "cleaner new production to come online". This also means that assets with high emissions will be more closely monitored and may require relevant persons to agree early and backstop CoP dates with reference to societal carbon values. This will have to be accompanied by early and fit-for-purpose decommissioning planning to avoid costly delays and unnecessary emissions post-CoP.
A change on the horizon to support this (from 2024 onwards) is an update to the UKCS Stewardship Survey to allow for reporting of company CoP dates for all assets, an early and backstop CoP dates where appropriate.
4. Flaring and venting
The plan notes that around one sixth of UKCS emissions come from flaring, and that while flaring volumes have decreased by approximately 50% since 2018 there remains safety and operational requirements for some flaring to take place. The plan's focus is, therefore, on preventing and/or reducing wasteful or non-essential flaring.
Relevant persons are required:
- From 1 June 2024, to "provide a documented method of the split of projected flaring and venting figures into categories with their flare and vent consent applications, to support delivery of zero routine flaring and venting from 2030."; and
- From 1 June 2025, include in their ERAPs plans and budgets to deliver continuous improvements in flaring and venting with a view on reducing greenhouse gas emissions.
In addition, where new developments are to be brought online via a tieback to an existing host they should be engineered on the basis of zero routine flaring and venting. The overall target is that by 2030 there will be no routine flaring and venting whatsoever (with a particular focus on methane in respect of venting, which somewhat echoes the approach being taken in the EU pursuant to the upcoming regulation on methane emissions reductions in the energy sector).
The clear message from the plan is that the NSTA is continuing with its focus on emissions reductions and supporting the UK's net zero targets.
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