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Trading Scheme Launched to Reduce Offshore Emissions
| Date: | 05 Feb 2001 | | Details: | Oil and gas companies operating in the North Sea today announced the start of an offshore flare transfer scheme designed to reduce the level of gas flared at more than 55 offshore fields.
The scheme, which is being run on a pilot basis, was developed from an initiative coming out of the PILOT government/industry taskforce and commenced in January with 11 companies participating. The pilot is the first inter-company emissions trading scheme in the UK and is being undertaken on a voluntary, no-risk basis.
Commenting on the introduction of the new scheme, Energy Minister Peter Hain said: "The Government is keen to reduce offshore emissions and this pilot transfer system will help to achieve this important goal by offering operators increased flexibility in their day to day management of offshore operations. This operational trial will provide the industry with valuable experience and I welcome it. The incentive is there for operators to create a flexible and cost effective trading mechanism. It should also reduce the levels of gas flared."
Steve Messner, of Amerada Hess and chairman of the Flare Trading Working Group, said: "The industry is committed to reducing flaring at offshore installations. Trading provides us with a mechanism for doing this in a way that maintains flexibility, essential in a complex operating environment, whilst achieving the overall goal. We believe this pilot scheme will provide us with valuable, practical experience and is an important step forward for the companies involved, the offshore sector and UK business more generally."
Jo Groeger, Veba Oil and Gas UK Ltd, who chairs UKOOA's Environment and Energy Policy Task Group, added: "This is a further example of the oil and gas industry taking positive action to reduce the environmental impact of its activities. We will continue to work together and with Government to maintain our focus on improving environmental performance."
The flare trading mechanism has been developed by the industry in consultation and co-operation with the DTI in order to: -
- continue the reduction in the overall quantity of gas flared;
- provide early experience of target setting and trading mechanisms, and;
- prepare the industry for possible integration into wider emissions trading schemes that are being developed for UK industry.
Flaring offshore is necessary for a variety of safety, operational and economic reasons. Companies operating offshore oil and gas production facilities have to apply to the DTI on an annual field-by-field basis for consents to flare nominated quantities of gas. There can be a variety of valid reasons for variations, either up or down, from these consent levels but overall flaring levels have fallen by over 20% over the last 10 years under the DTI's policy of stricter consent levels. The new scheme builds on this and will operate within an overall limit controlled by the DTI.
All participating fields will be given flare consents in the normal way for 2001. Participants will then set a voluntary target for each of their fields below the consent level. As and when they achieve better flaring performance than this target they will be in a position to transfer some consent to those fields that have had to exceed their voluntary target or consent level. Where the original flare consent is exceeded, the buyer would be required to apply to the DTI for a higher consent level whilst the seller would be required to apply for a lower consent level.
Results from the pilot scheme and recommendations for its future development are expected to be available towards the end of 2001. | | Contact: | Trisha O'Reilly, PILOT Communications
Tel: 020 7802 2422
Email: toreilly@ukooa.co.uk |
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For all press enquiries please contact:
Trisha O'Reilly at UKOOA Tel: 0207 802 2422 Email: toreilly@ukooa.co.uk
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