Debate over Cambo's oil is intense. What does it tell us about our energy future?

Last week I posed a query on whether the Cambo oil field project will go ahead.

As you would imagine, it received attention – and more importantly stimulated discussion.

With COP 26 on our doorstep this November, the massive offshore development near Shetland has become a central part of the energy transition debate in the UK. Politicians have weighed in on both sides and now protests from activists have pushed preparation work back to next year, maybe even longer.

Overwhelmingly the answer to our question was yes (92%), and the comments left alongside the votes were also pretty bullish.

“It has to go ahead”

“Considering 70% of Britain’s total energy supplies were supported by UK Oil and Gas in 2020, I don’t think we’re in a position to be blocking the move”

Considering that many of my network comes from the UK offshore oil & gas industry, maybe this won’t come as a total surprise. And, after all the question we asked was will it go ahead… not should it?

Misplaced confidence or considered wisdom?

Aberdeen has a long association with oil & gas and is quick to see the benefits of such as important project.

Sir Ian Wood, one of the industry’s and region’s most prominent leaders, has said it would be “absolutely crazy” to not proceed with the project. Sir Ian’s knowledge and wisdom have generated revenue and jobs throughout the UK and internationally for many years.

But it’s also right to ask if there is also a degree of bias and misplaced confidence here. Just because over the past decades these projects have always gone ahead, doesn’t mean they always will.

We’ve seen it before in previous oil downturns. Even at the bottom, we’ve been ready for things to pick up again. It’s always been a cyclical industry. Maybe this time the cycle path has a different route.

This week, our strategic growth director Scott Mitchell has written an article for us on the implications from the latest report from the UN’s Intergovernmental Panel on Climate Change, amid warnings of a ‘code red for humanity’.

He highlights that several nations have put in place policies to eliminate future exploration and production activity.

Be ready for change

One comment from my LinkedIn poll stuck out to me “It shouldn’t go ahead as it would be a signal that things have to change”.

The oil & gas industry needs to be ready for the black swan event. In August, the SNP agreed a power-sharing deal with the Scottish Greens – a party that is firmly against further oil extractions. Without any need for doom-mongering, what this says to me is that companies need to make sure they are prepared for energy transition.

Science and finance are not obvious bedfellows but when it comes to climate change, it’s clear they are steadfastly aligned and extremely concerned. The ticking clock becomes more audible every day and can’t just be ignored.

As ever, the devil is in the detail.

Demonising hydrocarbons extraction, no matter how virtuous it sounds, isn’t a silver bullet. It takes a global will to solve a global problem. The white lines on our road to net zero will come from considered, objective, collective and innovative thinking.

….So where does that leave us?

At Archer Knight, our market intelligence is at the forefront of helping companies adapt to energy transition.

For example, over the past two years, we’ve developed our renewable energy service and integrated it into our Alliance Market Intelligence (AMi) subscription service.

Our SaaS platform Flowline includes offshore wind projects, a sign of the shifting sands of the energy industry, helping provide our clients with unbiased intelligence that assists their key future decision making.

Get in touch with us here [email protected] to see how we can help.