UK industry publishes first report on sustainabilityNews // August 30, 2002
Around 70 per cent (43) of the 63 commitments agreed by the oil and gas sector to improve its contribution towards sustainable development have been delivered and action on a further 20 percent (14) is well in hand.
However, in a report published on the UKOOA web site (www.oilandgas.org.uk/issues/sustainability) the Association, which represents over 30 offshore exploration and production companies in the UK, acknowledges that there are still a number of important areas that require attention.
The original strategy - among the first in the UK - set out 58 commitments in four categories: economy; environment; society and stewardship. An additional five related to key processes for delivery, including performance measurement and reporting, stakeholder engagement and the sharing of best practice across the industry.
UKOOA says notable achievements include the sector's major contribution to the national and local economies in terms of the value of oil and gas produced (£23 billion in 2001), jobs supported (265,000 direct and indirect jobs plus a further 70,000 jobs supported by the export of UK goods and services), investment (£200 billion over the past three decades) and tax revenues (£175 billion since the mid-1960s). The UK remains a net exporter of oil and gas.
Other notable achievements include arrangements to promote shared logistics in the North Sea, especially for supply boats and helicopters serving offshore oil and gas platforms. The new practice for supply boats saw savings of some £300,000 within the first seven months, a significant part being in fuel costs; closer relationships with the supply chain to secure greater efficiencies and address recruitment, skills and training issues; continued improvement in environmental performance relating to the amount and concentration of oil in produced water discharged to sea, small oil spill reporting and large oil spills (no spills over 30 tonnes have occurred in the last two years), SO2 emissions, offshore gas flaring and the declining use of more hazardouscategories of chemicals; and £8 million committed in joint industry projects towards the development of essential new technology, over and above R&D initiatives by individual companies.
However, UKOOA acknowledges that further action needs to be taken to improve the industry's performance in: safety, which despite a 37 per cent improvement in the all injury rate over the last four years, still falls short of expectations; certain environmental areas relating to atmospheric emissions (which rose slightly in 2001, most likely due to the increased energy required per barrel to maintain production from a maturing North Sea basin), volatile organic compound (VOC) emissions, onshore flaring,and small accidental oil spills (now being addressed through a cross-industry awareness programme); securing independently verified environmental management systems (EMS) for all UK oil and gas production: the aim to have 90 percent of UKCS production covered by independently verified EMSs by the end of 2001 was not met. However, UKOOA anticipates that 97 per cent of all production will be accredited by the end of 2002; and improving data quality and standardisation, which will be the focus of a new industry initiative in 2002.
"The publication last year of the sectoral sustainability strategy was a milestone for the UK oil and gas industry. It was our first step towards defining our relationship with society at large: our interactions, impacts and responsibilities," said Michel Contie, managing director of TotalFinaElf UK plc and current president of UKOOA. "The progress report is an honest attempt to assess the achievements since then, as well as the gaps and the work that remains to be done."
"The oil and gas industry is the most productive sector of the UK economy, making a massive contribution in terms of jobs, revenues, technology development, exports and security of national supply," he added.
"We fear, however, that efforts to stimulate exploration and development activity, successful through 2001, are likely to be significantly affected by recent changes to the fiscal regime. We urge collaboration going forward between industry, Treasury andDTI on this issue."