The UK oil and gas industry was warned this week that it will face an increasing challenge in the years ahead to maintain its licence to operate from society as the country shifts to a lower carbon economy.

However, while delegates to trade association Oil & Gas UK’s (OGUK) Industry Conference 2019 in Aberdeen were told climate change is a “real and present danger”, they also heard the sector will have an important role to play in the so-called energy transition.

“I would like to reassure Greta Thunberg we are listening, because we want the world to be a better place too," OGUK chief executive Deirdre Michie told delegates, referring to the teenage Swedish climate change activist who has inspired school protests by hundreds of thousands of young people worldwide.

“And while we believe that our industry’s global contribution has improved the lives of billions of people, we are clear that climate change is a real and present danger that we must deal with together," Michie added.

“When Greta says, ‘If solutions within the system are so impossible to find, maybe we should change the system itself' — I would like to suggest that as the UK’s offshore oil and gas industry has so many talented people, engineers, data scientists, remote vehicle operators, technologists and more, we can find and deliver the solutions needed while at the same time positioning ourselves to be at the heart of an energy system that also needs to change,” Michie said.

OGUK has set a Vision 2035 blueprint for what the industry could look like in two decades time.

Michie confirmed that later this year the body will publish a roadmap setting out exactly how that will be delivered to ensure the sector continues to provide thousands of jobs, energy security and billions of pounds in government tax receipts.

Ian Duncan, parliamentary undersecretary of state at the UK Scotland Office, said that fulfilling the Wood Review strategy of maximising the economic recovery of the UK’s remaining oil and gas reserves was consistent with reducing climate emissions. He said widescale deployment of carbon capture usage and storage technology (CCUS) will be essential for the UK to meet its carbon reduction emissions targets.

“We need to work out how to bring along CCUS into the ...development of our oil and gas strategy and that will involve, I don’t doubt, investment from government.”

“CCUS will be part of our future. Of that I have no doubt. It is the only way will meet our targets. We should not lose sight of that very simple fact.”

Steve Phimister, head of Shell’s UK upstream operations, said it was the supermajor’s intention to move “in step with our customers as the world moves to a low carbon energy system”.

“I would like to be clear from the start, however, that the move to a low-carbon economy here in the UK really has to realise the economic opportunity that goes with it — to attract investment and attract new highly-skilled jobs.

“But we must do that while delivering on our commitments to maximise economic recovery form the North Sea. They go hand in hand. And we will continue to invest in this basin.”

Last month, UK government climate advisers said the country should commit to a net zero greenhouse gas emissions target by 2050. The recommendations by the Committee on Climate Change (CCC) came after weeks of protests by climate group Extinction Rebellion meant to raise pressure for action to tackle what it calls a global climate crisis.

The UK currently aims to cut greenhouse gas emissions by 80% compared with 1990 levels by 2050.

However campaigners say this does not go far enough to meet pledges made under the 2015 Paris climate agreement to try to limit a rise in global warming to 1.5 degrees Celsius.

Neptune Energy executive chairman Sam Laidlaw said: “Gas currently provides the only grid-scale back-up for intermittent (power) generation. At the global level, studies by the likes of McKinsey estimate that, by 2050, oil and gas will still account for around 40% of power generation.

“With gas continuing to play such an important role, there is an opportunity for our industry to get out of our silos and work together on solving some of the bigger challenges, to which no single sector has all the answers.

“If we are to solve this significant challenge, it will be by working together across the entire energy industry. It is not a case of renewables or hydrocarbons; we need both — and need businesses to collaborate, enabling efficient and lower carbon solutions," Laidlaw added.

However, IOGP executive director Gordon Ballard said many in western Europe were living in a “bubble”.

“There are many energy transitions under way and these vary considerably by country and by region,” he said, adding that the UK has made enormous progress in lowering greenhouse gas emissions.

"Climate change has become a dominant national concern but not often in conjunction with rational debate,” he said, arguing that: "Too often the NGOs and the media are promoting uncontested and simplistic solutions.”

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UK warned of lower carbon challenges