Rising insecurity in the Persian Gulf has once more moved energy security up the political agenda. Is it now time to have a balanced debate on the role of domestically produced gas, asks Jon Fitzpatrick, Founder and Executive Chairman of Gneiss Energy.
(This article first appeared in Energy Voice.)
Whilst the news of a fragile ceasefire between Iran and Israel gives us all a brief pause for breath, the continuing volatility around the Persian Gulf surely signals that now is the time for us to have a measured, non-partisan discussion about the role of gas in the UK energy mix?
With bombs dropped on Qatar, and the Strait of Hormuz under genuine threat from Iran, it is worth reminding ourselves that last year the UK imported around 8,580 GWh (or 794 thousand cubic meters) of natural gas from Qatar – via the strait – and that the gulf state is one of a number of foreign powers (including the USA and Norway) on whom we depend to provide the natural gas on which we rely. [1]
The argument has long been made that this does not make sense on either economic or environmental grounds – economic in that we could deliver much of this gas ourselves if the current (punitive) UK tax regime was relaxed; and environmental in that it is well proven that compressed liquid natural gas (LNG) brings with it greater greenhouse gas.
By the time it reaches the consumer, imported LNG has, on average, four times the embodied CO2 emissions as gas from the UK continental shelf (UKCS).[2]
That’s two parts of the holy trinity of the energy trilemma (cost, carbon and security) where home produced gas trumps Qatar hydrocarbons.
And if the last two years – or even two weeks – has shown us anything, it’s that security is now perhaps the most vital of the three. In an increasingly volatile world, why should we continue to rely on imported LNG from the USA and Qatar when our nearest hydrocarbon neighbour Norway continues to invest in exploration and production?
As I have stated before, no one is arguing that we don’t need to get to net zero. But in the journey to get there, even the Committee for Climate Change predicts – in every scenario – that gas will be part of the mix.
And, as many voices in Aberdeen and beyond have stated, we are shedding jobs in oil and gas faster than they are being replaced in offshore wind and other, more nascent, sectors. So, we are losing the vital skills we will need for the energy transition.
It is a timely moment. This week the UK Government published its industrial strategy, which put energy costs for industry and clean energy front and centre.
Neither of these is incompatible with having a measured transition to a greener future which capitalises on natural resources and a sector which still employs thousands of dedicated and experienced energy professionals.
Sadly though, most people – including commentators and politicians – fall into one camp or the other. To be pejorative, let’s call them ‘dinosaurs’ and ‘green believers’, where in reality, the truth lies somewhere in between.
Whatever the next decades bring, the UK will continue to rely to a greater or larger extent on hydrocarbons as we continue to ramp up existing and new green technologies. A less punitive and more stable tax regime would allow existing British businesses to innovate, take commercial risk and support skilled offshore jobs in the UKCS as we transition to a greener future.
Unfortunately, it seems impossible to have a reasoned debate on this (to me) fairly incontrovertible proposition: in an increasingly volatile world, why should we rely on foreign produced gas when it is more expensive, has higher embodied carbon and is clearly less secure that gas we can produce – with our own skilled workforce – right here, and right now?
[1] Energy Trends – Department for Energy Security & Net Zero
[2] Natural Gas Carbon Footprint Analysis – The North Sea Transition Authority
