Aberdeen risks being left stranded

As North Sea oil and gas production continues to decline and at the same time low carbon energy starts to replace fossil fuels, Aberdeen risks being left stranded.

Whilst oil and gas will continue to be important for Aberdeen for many years to come, diversification now into other sectors will be important for long term prosperity. Despite maximising economic recover (MER) and other initiatives, the inexorable decline in N. Sea production means that oil and gas activity in Aberdeen will never return to levels of recent years.

Lower and more volatile oil prices are a result of US shale oil and an excess of supply vs demand. Long term demand will also be affected by the low carbon transition and the use of electric vehicles.

Aberdeen has benefitted over the last 40 years from a singular focus on oil and gas, at the expense of other industries. Now the North Sea is in decline and oil prices are low this is a major challenge.

However, potential exists to redeploy the Aberdeen oil and gas supply chain and its technology into new low carbon sectors. Aberdeen could be a world leader in low carbon energy services, just as It is in oil and gas.

To ensure Aberdeen’s long term prosperity requires urgent diversification. Major investment and effort is required now to get past this myopic insularity. Oil and gas technology, know-how and innovation could be leveraged into high growth low carbon sectors of wind, wave, tidal, hydrogen, heat and water.

Beware: Aberdeen’s institutions and many major businesses are focussed on oil and gas, so don’t expect them to provide leadership in diversification. Forward thinking business leaders, the media and local/national authorities need to take action.

With the vision to be so, Aberdeen could be a world leader in low carbon energy services. But only if it acts now.

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Application of the Circular Economy Business Model to North Sea Decommissioning

In September 2014, the European Commission (EC) adopted a Zero-waste programme that became the legal framework for development of an EU-wide Circular Economy.  The model assumes reuse of resources, minimisation of waste and encourages efficient use of the assets at our disposal.  The Commission estimates that a Circular Economy can save EU businesses €600bn per year.  Even though in December the EC confirmed it is scrapping plans to introduce the package and will launch a ‘broader and more ambitious’ waste package this year, the Circular Economy Business Model will still be at its core.  With the major decommissioning challenge being faced by the North Sea oil and gas sector, does the Circular Economy provide a useful perspective for enhancing value and reducing waste in this major emerging sector?

CO2 Storage Offshore UK: Standing on the Shoulders of Giants

The UK is in a strong position with respect to the potential for permanent sequestration of CO2 offshore in rock formations deep below the North Sea.  This is because of two factors.  Firstly the correct type of rock formations exist in places below the North Sea with the porosity to provide capacity for the CO2, permeability to allow its injection, and sealing formations to contain the CO2.


The Wood Review: Back to Britoil?

The Wood Review, published in February and aimed at identifying ways to stimulate North Sea oil and gas activity, proposes the creation of a new arm’s length industry regulator or agency to take on a broad industry facilitation role.  When one looks at the roles proposed for this new agency, one could be excused for having a sense of ‘déjà vu’.