The UK has an advantage over many other countries in the transition to net zero, given the North Sea, with its blend of oil and gas, wind, hydrogen and carbon storage resources.

Individually, these energy systems are a gift to the UK. Indeed, £200bn could be spent on them by 2030 alone, a massive opportunity for economic growth. But the best way to unlock their full potential is to integrate them, creating a vibrant, interconnected North Sea to underpin the country’s energy security needs, deliver net zero and support hundreds of thousands of good jobs.

The NSTA’s role 
The NSTA aims to be the force for integration in the UK, working closely with industry, government and other regulators to remove barriers and establish pathways to net zero.

An example of our focus on this area is the Energy Integration Project, which found that the North Sea can contribute 30% towards the UK’s net zero target, mainly through carbon storage and hydrogen. Add in wind, wave and tidal, and the UK Continental Shelf (UKCS) meets 60% of the total.

This project was launched in early 2019, when we were still known as the Oil and Gas Authority (OGA). We took this name when we were founded in 2015 with a remit to revive the flagging fortunes of the UK’s upstream oil and gas industry, which had become inefficient.

We didn’t let the prolonged downturn which struck in late-2014 become an excuse for continued poor performance. Instead, we emphasised the urgent need for change and took a proactive approach to stewardship, introducing performance benchmarks, publishing clear guidance and highlighting best practice, resulting in a significant improvement in production efficiency. We continue to encourage industry to consistently display the right, collaborative behaviours.

From the start, our leadership was aware of the need for urgent action on climate change, starting in earnest with our integration project. We continued to evolve as an organisation in early 2021 with the publication of a revised strategy, which obliges industry to support the UK’s transition to net zero, while continuing to optimise production.

We also took on responsibility for emissions monitoring and expanded our involvement in carbon storage as our role in the energy transition grew. Our work changed so much in such a short space of time that a new name was required to reflect the breadth of our work across the energy transition, and so we became the NSTA in March 2022.

The NSTA of today exists to maximise the North Sea’s potential and has three key priorities:

• Energy security. 
• Emissions reduction.
• Accelerating the transition to net zero.

These pillars guide the day-to-day operations which deliver our strategy.

Energy security 
The importance of being able to call upon domestic resources to bolster energy security was highlighted by Russia’s invasion of Ukraine. Oil and gas still meet 75% of our energy demand and, while this must be reduced, hydrocarbons will continue to play an important role in the energy mix.

However, UKCS oil and gas production is in steady decline. Even with new projects coming online, our projections show that production will decrease every year – at a rate that is broadly in line with global 1.5°C scenarios – and the UK will continue to be a net importer of hydrocarbons.

New UKCS projects will slow this decline, make us less reliant on imports, and create economic benefits in the shape of tax revenues and jobs. The NSTA continues to steward oil and gas fields from licensing to production and through to decommissioning. We are currently running the 33rd oil and gas licensing round and expect to announce the awards in the coming months – and have consented to more than 10 new production projects since the start of 2022.

Importantly, we can influence how our reserves are produced. This is not the case with imports, which often come with a bigger carbon footprint.

The NSTA considers new production projects in light of our ‘effective net zero test’, which weighs up several factors, including an economic assessment with societal cost of carbon, lifetime production against UK future demand, and compatibility with the North Sea Transition Deal target of halving production emissions of CO₂ by 2030. New developments must be electrification-ready, or incorporate low-carbon power solutions, and be designed with zero routine flaring and venting.

The NSTA of today exists to maximise the North Sea’s potential and has three key priorities – energy security, emissions reduction and accelerating the transition to net zero. 

Emissions reduction 
During a field’s production life, the NSTA keeps a sharp focus on methane emissions’ performance, tracking and monitoring data which is presented in our annual emissions monitoring reports. Our most recent report showed production emissions have dropped by 23% between 2018 and 2022, while flaring was cut in half over the same period.

This encouraging progress can be attributed to the introduction of tough guidance on flaring and venting and the sharing of best practice. Operators have made substantial investments in equipment designed to minimise flaring, namely flare gas recovery units, each estimated to save up to 22 t/d of flared gas. Last year’s flaring reduction alone was equivalent to the gas demand of a city roughly the size of Dundee, a great example of net zero ambitions and energy security going hand-in-hand.

The NSTA continues to hold industry to account on its emissions. No one will be allowed to rest on their laurels, as there is still a real possibility that the 2030 emissions target will be missed without concerted action from industry. Failing to hit the target would seriously jeopardise the sector’s social licence to operate.

To provide further impetus, the NSTA launched a consultation on a proposed new emissions reduction plan. The aim is to encourage oil and gas operators to take action today and in future investment decisions to cut their greenhouse gas (GHG) emissions and get on long-term reduction pathways. Collaborative solutions are required to overcome this global challenge and we look forward to real, constructive engagement on the plan from a range of stakeholders.

Carbon storage and hydrogen 
The NSTA’s work on carbon storage is essential to delivering the third priority – accelerating the transition to net zero, not just for the upstream industry, but the UK as a whole. At present, there is no credible route to net zero without carbon storage. The Climate Change Committee estimates that the UK will need to have stored a cumulative total of 1.6 Gt of CO₂ by 2050 to meet the net zero target.  

The UK is the perfect place to scale up this technology. We have more than enough capacity – with potential of up to 78 Gt, according to the most recent estimates from British Geological Survey – enough to capture centuries worth of UK emissions.

Decades’ worth of gas transport and storage expertise is embedded in our world-class supply chain, while the basin is stocked with infrastructure which can be repurposed for carbon storage projects. The NSTA has a pivotal role in helping the sector flourish. We have just held the UK’s first ever carbon storage licensing round, issuing 21 licences for sites capable of trapping around 10% of the UK’s annual emissions by 2030.

Earlier this year we formed a dedicated carbon transportation and storage team to oversee the delivery of projects, following successful exploration and appraisal. The team is constantly assessing the viability of new technologies.

In September, the NSTA became the regulator for the transport and storage of hydrogen offshore. Clean hydrogen can support the UK’s future energy security and play a transformative role in the county’s transition to net zero. It can contribute to reducing GHG emissions, particularly from industrial sectors which are difficult to decarbonise, and has the potential to provide flexible energy for power, heat and transport.

As with carbon storage, the skills of the oil and gas workforce can be transferred to hydrogen production and storage, positioning the UK to become a key player in scaling up this industry.

How it might work – CO₂ being stored underground; the platform is powered by electricity generated from the wind 
Source: NSTA

Regulating the North Sea 
As Director of Regulation, I have an ideal vantage point from which to see how the NSTA influences so much of what goes on in the UKCS and how our organisation will help shape the North Sea. The teams I lead directly impact the NSTA’s three priorities. For example, our work on licensing and consents supports the UK’s security of supply, while the disputes and sanctions team holds industry to account on emissions, including imposing financial penalties on companies which breach flaring and venting consents.

In addition, the Directorate’s input is vital to establishing regulatory frameworks for emerging technologies such as carbon storage, hydrogen and geothermal, and also platform electrification.

It is clear to me that the UK has an unrivalled opportunity to deliver the vision of a vibrant, integrated North Sea. However, there are significant challenges to overcome, as many different industries compete for space in an already crowded seabed. A thoughtful, collaborative and innovative approach to regulation will be required.

We all need to do more on climate change, and to do it much more quickly, but we also need to safeguard our energy security as part of an orderly transition to net zero. The NSTA is fully committed to playing its part, with others, to explore all opportunities.