Economic Report 1999 Index

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The Environmental Challenge Meeting the environmental expectations of both the Government and the general public is a challenge that all industries must make positive efforts to achieve. Over recent years the offshore oil and gas industry has sought to become more transparent about its practices and environmental responsibility. In 1992 UKOOA set up an emissions and discharges database and recently a consultant has been commissioned to review and update this emissions monitoring scheme. The industry is committed to annual publication of its environmental emissions and discharges and published its second collective environment report in December 1999. The UK offshore industry has already made a major contribution towards the UK's ability to meet its Kyoto targets. Emissions from power stations have fallen by some 12 million tonnes of carbon per annum between 1990-97 as a result of switching to gas-fired power generation. Further savings will be achieved as more gas-fired power stations come on stream. Although the Climate Change Levy announced by the Government will not directly affect the E&P sector, it is likely to have a significant effect on offshore activity through reduced demand for gas and reduced prices for producers. This will undermine the positive role for gas in reducing emissions, particularly if gas is substituted for less clean fuels. UKOOA members are playing an active part in developing trading schemes for flaring consents and some members are participating in a broader-based emissions trading scheme with CBI and ACBE, in order to reduce emissions in the most cost effective way. The industry has indicated that implementation of legislation and regulation from the EU and the UK is an increasing burden. Care must be taken to strike the right balance of environmental leadership and responsibility without affecting the competitiveness of the UK as an oil and gas producing region.