Why we need "Net zero"

[SteamyTea]

50 minutes ago, jack said:

Gas is going to be burned for decades. North Sea gas displaces gas from elsewhere, so is (relatively) carbon neutral.

That assumes no one else is reducing FF burning.

It is quite possibly that we have reached global peak CO2e.

[Beelbeebub]

1 hour ago, jack said:

Either there's still oil/gas to be economically extracted, or there isn't.

The key bit being economically extracted.

 

The current high prices mean there is more gas/oil that can be extracted profitably at this higher price.

 

What that oil and gas doesn't do is reduce our prices or increace the security of supply (both arguments that have recently been advanced) 

[ProDave]

The current oil situation should be a wake up call for the government re energy security.  But they can't see it.

 

We have done a good job so far on renewable generation and that will continue.  But we still need oil and gas and will do for some time.  So let's drill our own.  Most people seem to think if we drill our own it means we have abandoned the plan to go green.  No it does not.  It means we just want to get as much of the oil and gas that we need from a secure source closer to home, which has to be better than transporting it half way around the world from insecure sources via insecure shipping routes.

 

Oh and the government would get more income from the extraction of our own resources not to mention the employment it would provide.

[Beelbeebub]

1 hour ago, LnP said:

Respectfully, no it isn't. Fully agree we do need to decarbonise. The point here is that HMG are driving decarbonisation by trying to manage the supply side of the energy chain - not issuing licences in the North Sea. Better would be to drive it by demand side measures, e.g. a carbon tax. Then we can leave it to the oil companies to figure out how much is there and whether they can get the stuff out economically. There needs to be a cost of carbon which reflects the environmental damage it does. Dieter Helm's suggestion is that the carbon price should move inversely to the price of oil, which seems like a good idea.

The idea of shifting the carbon tax up and down as the O&G moves effectively gives a fixed price for O&G

 

So the uptake of renewables is driven at a constant rate as the fixed o&g price would always be higher than the "floating" price, assuming that the tax rate will never go negative. Which is great but that is just as much tinkering with the supply side as just not granting any licences. 

[Beelbeebub]

1 minute ago, ProDave said:

The current oil situation should be a wake up call for the government re energy security.  But they can't see it.

 

We have done a good job so far on renewable generation and that will continue.  But we still need oil and gas and will do for some time.  So let's drill our own.  Most people seem to think if we drill our own it means we have abandoned the plan to go green.  No it does not.  It means we just want to get as much of the oil and gas that we need from a secure source closer to home, which has to be better than transporting it half way around the world from insecure sources via insecure shipping routes.

 

Oh and the government would get more income from the extraction of our own resources not to mention the employment it would provide.

Again, the whole point of the thread is that drilling for more O&G in UK territory doesn't actually add meaningfully to our supply. There simply isn't much left. 

 

The argument that it would replace the imported gas is partly true.  

 

There is a graph showing that Aby 2040 (or something) we could be importing over half our consumption via LNG(*) but of we drilled for more we could replace that with UK gas (the rest being Norwegian) 

 

What that leaves out though is

 

A) that scenario is the most wildly optimistic oil and gas industry projection. It is likely we still would need imported LNG, just a tiny bit less. 

 

B) that demand in 2040 {or whenever) assumes we have massively reduced demand by implementing the current net zero policies (energy efficency plus electrification of transport and heating). So we could replace that imported LNG by drilling or by pushing net zero a bit harder to reduce demand for gas even more. 

 

The last bit (pushing net zero harder) also generates even more jobs in those industries. 

 

*the LNG import picture is a little nuanced. Yes we import a lot but if you look at our national consumption, the LNG is basically extra. That is to say the UK imports about as much LNG as it exports gas via pipeline. Effectively the UK is acting as Europe's LNG terminal (at the start of the Ukraine war, thr UK had the lions share of European LNG terminal capacity so lots of the extra LNG Europe imported to replwce Russian gas via pipeline cam via UK LNG imports that were gasified and exported via pipeline)

[saveasteading]

23 minutes ago, ProDave said:

wake up call for the government re energy security.  But they can't see it.

I have the strong impression that they see it clearly, hence the promotion of wind and solar.

 

Does anyone here know how long it takes to plan and then extract oil and gas? I don't, but suspect several years.

And what will the global price be then? 

If it drops then our own stuff won't be viable.

It's not something I would invest in?

[jack]

2 hours ago, Beelbeebub said:

The key bit being economically extracted.

 

The current high prices mean there is more gas/oil that can be extracted profitably at this higher price.

 

If that's true, then no-one will drill if you give them a licence, in which case you're wasting your energy arguing. 

 

Your other arguments may be true, but they're irrelevant. Local drilling will generate less CO₂ overall, and may at least bring some tax into the coffers. The rest of it is a commercial decision that ought to be made by commercial entities.

 

1 hour ago, Beelbeebub said:

Again, the whole point of the thread is that drilling for more O&G in UK territory doesn't actually add meaningfully to our supply. There simply isn't much left. 

 

If it makes such little difference, why are you arguing against private companies siphoning out what remains? Let them get on with it in parallel with doing what we can on renewables and (more importantly) grid capacity and storage.

[jack]

10 minutes ago, saveasteading said:

I have the strong impression that they see it clearly, hence the promotion of wind and solar.

 

Does anyone here know how long it takes to plan and then extract oil and gas? I don't, but suspect several years.

And what will the global price be then? 

If it drops then our own stuff won't be viable.

It's not something I would invest in?

 

For existing fields with well-understood geology, I believe new wells can be planned and drilled in a matter of several months. I don't know whether there are additional delays associated with manufacturing the rigs themselves. 

[ProDave]

There is no shortage of drilling rigs, if we have not yet sent them all to the scrap yard.  There are still a few in the Cromarty Firth, though not as many as there used to be.

[SteamyTea]

13 minutes ago, jack said:

Local drilling will generate less CO2 overall

Rather minor reduction though. The shipping of petrolchemicals is very efficient.

Probably the biggest problem would be processing, it is not a case of drilling a hole and piping it directly into the gas grid. 

Having grown up on oil refineries, I can tell you that they are not nice places, and very smelly.

[ProDave]

Yes sadly we have been closing our refineries because they cause too much pollution.  Instead we export crude oil and import refined fuel shifting the pollution to another country so we look good.

 

But lousy for energy security, loss of employment, and of course globally it makes no difference to pollution.  We just kid ourselves closing our heavy industry saves the planet.

[jack]

53 minutes ago, SteamyTea said:

Rather minor reduction though. The shipping of petrolchemicals is very efficient.

Probably the biggest problem would be processing, it is not a case of drilling a hole and piping it directly into the gas grid. 

 

Irrelevant. Even if there were zero reduction in CO₂ emissions, my position is unchanged.  

 

Even if arguments that drilling won't be practical or profitable are correct, then either:

• Oil companies won't drill even if granted licences, in which case the argument is moot.
• Or they'll drill, lose money, and presumably stop drilling when it becomes clear they made a mistake. 

In both cases, the end result is drilling doesn't continue.

 

I don't actually have strong beliefs either way, but I do believe that non-experts (including governments) shouldn't be involved in decisions about whether something is practical or profitable for a company. There are, or course, plenty of other factors that governments should weigh in on, such as safety regs, environment, tax, etc.  

[Beelbeebub]

4 hours ago, jack said:

 

If that's true, then no-one will drill if you give them a licence, in which case you're wasting your energy arguing. 

 

Your other arguments may be true, but they're irrelevant. Local drilling will generate less CO₂ overall, and may at least bring some tax into the coffers. The rest of it is a commercial decision that ought to be made by commercial entities.

 

 

If it makes such little difference, why are you arguing against private companies siphoning out what remains? Let them get on with it in parallel with doing what we can on renewables and (more importantly) grid capacity and storage.

I'm not actually arguing against drilling new wells. The title of the thread was about why we needed net zero policies - because we were running out of gas and oil regardless of how much we drilled. 

 

I would say that, given how vital gas and oil are to the petrochemical industry eg plastics, maybe we shouldn't extract it just to be burned in a vain attempt to keep the old model going. 

 

Maybe we should either wait or extract it, but use it for industries that aren't burning it. This would require a different model from the current "here's your licence, do what you want with the oil" approach. It would require a much more integrated approach, which I doubt will be viable at the moment, but might be in decades to come. 

 

Overall, our best bet is to go even quicker on the switch away from burning oil and gas to move and heat things. That will reduce CO2 (again, not actually he original point of the thread) even faster than burning locally sourced oil. 

 

[Beelbeebub]

3 hours ago, jack said:

 

I don't actually have strong beliefs either way, but I do believe that non-experts (including governments) shouldn't be involved in decisions about whether something is practical or profitable for a company. There are, or course, plenty of other factors that governments should weigh in on, such as safety regs, environment, tax, etc.  

Why do you suppose that governments are not experts, or don't have access to experts? 

 

Governments should absolutely be able to say "no you can't do this even if it would make you money"

 

Advertising cigarettes 

Selling personal data

Crash safety and emissions for vehicles 

Minimum building standards

Sugar in drinks

 

All of these are profitable things companies have decided are practical and profitable and the government has stopped. 

 

The argument that allowing more drilling would lower bills and increace energy security is BS. 

 

The argument it may reduce CO2 vs burning imported gas is a red herring. 

 

We are left with "it will allow investors to make a cracking return" - which isn't super strong. They could invest the same money into renewables. 

[LnP]

7 hours ago, Beelbeebub said:

The idea of shifting the carbon tax up and down as the O&G moves effectively gives a fixed price for O&G

 

So the uptake of renewables is driven at a constant rate as the fixed o&g price would always be higher than the "floating" price, assuming that the tax rate will never go negative. Which is great but that is just as much tinkering with the supply side as just not granting any licences. 

Carbon taxes are paid by consumers. They increase the price of the commodity. If the price is higher due to the carbon tax, people will buy less. That's a demand side measure.

[ProDave]

27 minutes ago, LnP said:

Carbon taxes are paid by consumers. They increase the price of the commodity. If the price is higher due to the carbon tax, people will buy less. That's a demand side measure.

Which is why putting the green levies on electricity prices was the most bonkers policy ever.  Should have been on gas prices.

[Beelbeebub]

1 hour ago, ProDave said:

Which is why putting the green levies on electricity prices was the most bonkers policy ever.  Should have been on gas prices.

Agree, though I think the logic was that 

 

A) almost everyone has electricity but not everyone has gas. 

 

B) at the time the grid was very co2 heavy and gas was cleaner. 

 

I looked into heatpumps back in the late 00's and iirc the grid was. Over 600g/co2 per kwh, so a 3:1 heatpump would be about 200g (assuming you could achive that with heatpumps then) which is about the same as a gas boiler.  So there was almost no co2 saving and a very considerable extra install and running cost. 

 

Now the grid averages well below 200g, so you are actually greener (but poorer!) using a 3 bar fire than a gas boiler.

 

 

[LnP]

This article from OEUK addresses several of the points discussed in this thread - how much O&G is left, what would be the benefit of extracting it, how quickly and easily can that be done.

OK, it’s a trade body so be ready to fact check, but a lot of it makes sense.

https://oeuk.org.uk/policy-versus-geology-new-report-reveals-165bn-choice-facing-north-sea-future/

My sense is that the way ahead should be:

• Don’t ban new O&G fields.
• Let the O&G companies take the risk whether they can make the economics work. They have a knack of finding new hydrocarbons and extracting them. 
• New licences should be linked to contracts for O&G landed in the UK at a fixed price, not spot prices.
• Acknowledge that we have a climate emergency. But manage the progress to decarbonisation not by constricting the supply side but by demand side measures, I.e. carbon taxes and carbon border adjustment mechanism.
• The system costs of renewables need to be accounted for - their intermittency and required grid upgrades.

It’s complicated though. I hope our politicians and civil servants have got their heads round all this, but I’m not sure they do. Other countries looking at us won’t see a clean energy superpower, leading the world. They’ll see our deindustrialisation and the cost to our economy, as evidence that our policies are not working.

[-rick-]

7 minutes ago, LnP said:

• Let the O&G companies take the risk whether they can make the economics work. They have a knack of finding new hydrocarbons and extracting them. 

 

Don't have a source but I'm pretty sure I remember the last government had to implement various incentives for the last big round to go ahead. Things like reducing the provisions that need to be made to clean up after the rigs are done, tax breaks.

 

I'm not sure what the current situation is but while I don't have huge problems with new licences if they are purely at the companies risk I would have problem with any sort of subsidy direct or indirect. Any public funds put into energy independence should go on renewables as that is the most cost effective option at this point.

[Mike]

11 hours ago, ProDave said:

The current oil situation should be a wake up call for the government re energy security.  But they can't see it.

It's not yet painful enough. The 70's Oil Crisis was painful and did, briefly, prompt Government action in the UK, even if it didn't turn out well - another expansion of nuclear followed by dependence on gas...

[Beelbeebub]

10 hours ago, -rick- said:

 

Don't have a source but I'm pretty sure I remember the last government had to implement various incentives for the last big round to go ahead. Things like reducing the provisions that need to be made to clean up after the rigs are done, tax breaks.

 

I'm not sure what the current situation is but while I don't have huge problems with new licences if they are purely at the companies risk I would have problem with any sort of subsidy direct or indirect. Any public funds put into energy independence should go on renewables as that is the most cost effective option at this point.

There was an analysis by "uplift" (which is pro renewables for full disclosure) that indicated all the licencing by the last government from 2010 to 2024 had yielded about 40 days more oil and gas than would otherwise have been extracted. 

 

Again the point being that it really doesn't help with energy prices or security. 

[jack]

19 hours ago, Beelbeebub said:

Why do you suppose that governments are not experts, or don't have access to experts? 

 

Really? Have you lived in the UK for the last few decades? As an example, how about the ricidulous energy pricing paradigm discussed elsewhere in this thread, which has left us with insanely high energy prices?

 

19 hours ago, Beelbeebub said:

Governments should absolutely be able to say "no you can't do this even if it would make you money"

 

Advertising cigarettes 

Selling personal data

Crash safety and emissions for vehicles 

Minimum building standards

Sugar in drinks

 

All of these are profitable things companies have decided are practical and profitable and the government has stopped. 

 

Straw man - this is not my argument. False equivalence & appeal to emotion - you've listed inherently "bad" things as examples of things governments should be able to ban, but not explained why the question of whether drilling is commercially viable is equivalent to those things. I say they aren't equivalent.

 

2 hours ago, Beelbeebub said:

Again the point being that it really doesn't help with energy prices or security. 

 

Straw man. Not my argument.

 

19 hours ago, Beelbeebub said:

The argument it may reduce CO2 vs burning imported gas is a red herring. 

 

Straw man. At best incidental to my core argument:

 

22 hours ago, jack said:

Even if there were zero reduction in CO₂ emissions, my position is unchanged.  

 

This is my core argument, which is narrow and specific:

 

22 hours ago, jack said:

I don't actually have strong beliefs either way, but I do believe that non-experts (including governments) shouldn't be involved in decisions about whether something is practical or profitable for a company. There are, or course, plenty of other factors that governments should weigh in on, such as safety regs, environment, tax, etc.  

 

And as for this:

 

19 hours ago, Beelbeebub said:

We are left with "it will allow investors to make a cracking return" - which isn't super strong. They could invest the same money into renewables. 

 

Straw man - not my argument. The reference to renewables is a false dichomy (investors don't have to invest in only renewables or drilling). The "cracking return" is a sly appeal to emotion (people interested in financial returns are somehow bad).

 

I won't be continuing the discussion. Hopefully it's clear why.

[Beelbeebub]

15 hours ago, LnP said:

This article from OEUK addresses several of the points discussed in this thread - how much O&G is left, what would be the benefit of extracting it, how quickly and easily can that be done.

OK, it’s a trade body so be ready to fact check, but a lot of it makes sense.

https://oeuk.org.uk/policy-versus-geology-new-report-reveals-165bn-choice-facing-north-sea-future/

Yes, that's the exact report this thread has been based on. 

 

 

 

The trade body spin is "extra 3.2b barrels" and "double production" and "meet half of demand" 

 

 

 

But that leaves out some important points from the same study they quote

 

 

 

3,200 million barrels sounds alot but the UK consumes 1.5million a day. 

 

 

 

So that is a little under 6 extra years of consumption. 

 

 

 

That 3.2b extra is the absolute wildly optimistic case that the study says is unrealistic vs the very lowest case, even lower than the official NSTA projections. 

 

 

 

If you take the more realistic by still optimistic valve vs the middle of the road official estimate the figure drops to less than 1.5bn

 

 

 

Again, putting co2 aside and purely looking at energy security and stability, oil and gas is not the future and all the extra drilling we can do barely moves the needle. 

 

15 hours ago, LnP said:

My sense is that the way ahead should be:

• Don’t ban new O&G fields.
• Let the O&G companies take the risk whether they can make the economics work. They have a knack of finding new hydrocarbons and extracting them. 
• New licences should be linked to contracts for O&G landed in the UK at a fixed price, not spot prices.
• Acknowledge that we have a climate emergency. But manage the progress to decarbonisation not by constricting the supply side but by demand side measures, I.e. carbon taxes and carbon border adjustment mechanism.
• The system costs of renewables need to be accounted for - their intermittency and required grid upgrades.

I don't disagree but I also don't really think we should be bothering to drill more. It does very little, it sends the wrong signals and the capital invested in it could be better invested in renewables. 

 

15 hours ago, LnP said:

It’s complicated though. I hope our politicians and civil servants have got their heads round all this, but I’m not sure they do. Other countries looking at us won’t see a clean energy superpower, leading the world. They’ll see our deindustrialisation and the cost to our economy, as evidence that our policies are not working.

It is complex, I think some politicans have got their head round it. The ones that haven't (or won't) are the ones advocating for more drilling as a way to reduce bills and improve energy security. 

 

People get hung up on deindustrialisation but I'm not so sure it's as bad as people think. Manufacturing has generally been growing since WW2, albeit with reversals during things like the 90's crash, 2098 crash, covid etc. What has happened is it's become less visible (fewer giant factories with belching smokestacks - you can drive past a muti million dollar manufacturing facility and not be able to distinguish it from a warehouse now) and a smaller part of the economy as other sectors grow faster. 

 

Cheaper power would be a boon to manufacturing sure and renewables can provide that.

 

 

[-rick-]

8 minutes ago, Beelbeebub said:

People get hung up on deindustrialisation but I'm not so sure it's as bad as people think. Manufacturing has generally been growing since WW2, albeit with reversals during things like the 90's crash, 2098 crash, covid etc. What has happened is it's become less visible (fewer giant factories with belching smokestacks - you can drive past a muti million dollar manufacturing facility and not be able to distinguish it from a warehouse now) and a smaller part of the economy as other sectors grow faster. 

 

The argument has been we've been moving up the value chain. But not sure that holds. Brexit has done a number on manufacturing (which was previously tightly integrated with EU supply chain) and the previous low cost producer is now galloping up the value chain:

 

https://www.ft.com/content/7d51a630-a3de-4cc7-9f5f-0f3e7f0d305a?syn-25a6b1a6=1

 

(I looked at doing a gift link but looks like with my subscription I can only share to individuals - no point sharing it on a forum).

 

Having said that, the problems we have in this country are far deeper than energy. Solving energy doesn't solve industry and solving industry does not require solving energy (except in some limited high energy cases).

 

8 minutes ago, Beelbeebub said:

Cheaper power would be a boon to manufacturing sure and renewables can provide that.

 

Yep.

 

Covering factory roofs in solar panels + batteries could be a huge boon if properly marketed. One of those things that hasn't happened to the degree it should have. Though the government shouldn't fund subsidies as it should be a cost benefit to the companies, but marketing it and maybe lower cost loans to fund it should be something the government is doing. (yes low cost loans is a subsidy but relatively limited compared to other renewable incentives).

[Gone West]

19 minutes ago, Beelbeebub said:

What has happened is it's become less visible (fewer giant factories with belching smokestacks - you can drive past a muti million dollar manufacturing facility and not be able to distinguish it from a warehouse now)

https://greatsouthwest.co.uk/agratas-update/