The UK’s top climate advisor has delivered forthright criticism of the oil and gas industry that it is not doing enough to tackle climate change.
Chris Stark, chief executive of the Climate Change Committee (CCC), told an industry audience this week he felt many in the sector still fail to understand the full extent of energy transition or the economic opportunities it will present.
Stark was speaking during the opening plenary session of the 2021 Offshore Europe conference, being held virtually due to the Covid-19 pandemic.
Asked if industry was doing enough to tackle climate change, Stark replied: “I won’t try and tart it up — no, I don't think you are. I don’t think the sector is doing enough.”
Stark called on the industry to take “more of a stake” in addressing emissions caused by the use of the products it sells, so-called Scope 3 emissions.
“I would really like to see that change. I would like to see a real focus on the full scope of emissions — Scopes 1, 2 and 3,” he said.
"I'm not sure, if I'm honest... that the extent of the transition ahead is clear to many of the people in the industry, nor the economic opportunities that will go with that.”
Stark said he believed the future commercial success of the sector rested "fundamentally on having real plans" in place to drive large-scale investment in the energy transition.
“The oil and gas sector has the balance sheet to do it. And for me, that's what's exciting about it — the pace of this transition will be faster if the energy sectors generally drive the pace of it even faster than policy," he said.
“I would like to see much more of a commercial eye on the things that lie ahead and far less of the kind of relying solely on government policy to drive it.”
Stark, who admitted that addressing an oil and gas conference felt like he was "entering the lion's den", added the oil and gas sector was reaching a "critical moment".
"I would like to see the sector as a whole face into this challenge properly, genuinely take ownership of the problem of unabated fossil fuel burning," he said.
Joining Stark during the opening plenary of the four-day conference were Gordon Birrell, executive vice president of production and operations at BP; Al Cook, Equinor’s executive vice president; and Phil Kirk, Europe chief executive at Harbour Energy. The session was moderated by IOGP executive director Iman Hill.
Birrell said he agreed with Stark on Scope 3 emissions.
“I think ultimately Scope 3 emissions are the challenge for our industry and ultimately we need to play a part in shaping how much unabated fossil fuels in burned in the world,” said Birrell.
The BP executive noted his company's decision in August last year to shrink oil and gas output by 40% in 2030 compared with 2019.
However, he cautioned such reductions have "to be done in the right way”.
“If we go too fast we would create massive turmoil in energy markets and we don't want to do that,” he said.
“But ultimately, I think the world's going to expect Scope 1, 2 and 3 [emissions] to be reduced over time. It has to, otherwise net zero can't be achieved.”
Cook, meanwhile, said it was not an option for oil and gas companies to “divest their way out of climate change”.
“You do just shift the problem onto someone else. And often that company does not care as much about climate change as the major that made the divestment,” said Cook.
Selling assets to reduce emissions should be a last resort for any company, he said.
“We should be seeking to reduce carbon emissions wherever we invest, wherever we operate and do our best to do that before we divest.”
Offshore Europe had been due to take place in Aberdeen this week but the in-person event was postponed until next February due to the ongoing disruption of the Covid-19 pandemic.
Organisers Reed Exhibitions and The Society of Petroleum Engineers decided instead to hold a virtual event from 7 to 10 September.
The CCC, the UK government's independent climate advisors, in June said that the nation's lack of policies to meet net zero emissions by 2050 is jeopardising its chance of meeting the target.
The UK in 2019 became the G7 first member to set a net zero target, which will require wholesale changes in the way that Britons travel, eat and consume electricity.
The UK is also hosting international climate talks in November in Glasgow, where countries are expected to outline plans to meet the Paris climate agreement to keep global warming under 1.5 degrees Celsius.