Operators fined total of ￡265,000 as NSTA moves to enforce net zero and security of supply requirements

• EnQuest and Equinor sanctioned for exceeding flaring permits
• Spirit Energy fined for breaching production limits

Three operators have been fined a total of ￡265,000 as the North Sea Transition Authority (NSTA) cracks down on behaviour that risks the industry’s drive to cut emissions and bolster the UK’s energy security.

EnQuest has been fined ￡150,000 for flaring an excess 262 tonnes of gas on the Magnus Field between 30 November and 1 December 2021, despite knowing that it did not have the necessary consent in place.

Equinor has been fined ￡65,000 for flaring at least 348 tonnes of CO2 above the amount permitted on the Barnacle Field between June and November 2020.

Spirit has been fined ￡50,000 for exceeding the maximum allowed production volumes from two fields over three years. Producing too much oil and gas can reduce the overall long-term production from a reservoir, to the detriment of the UK’s security of supply, so it is vital that when an operator wants to raise production it applies for a new consent so that its new plan can be assessed.

The NSTA’s flaring and venting guidance aims to eliminate unnecessary or wasteful flaring and venting of gas. This is in line with the central obligation of the NSTA’s Strategy, which includes a requirement for industry to assist the Business and Energy Secretary in meeting the net zero target.

This includes ensuring that flaring and venting and associated emissions should be reduced as far as reasonable in the circumstances, and there should be zero routine flaring and venting by 2030.

Operators such as EnQuest and Equinor must follow a clear process to apply for consent to flare or vent gas and progress has been encouraging with overall emissions from North Sea oil and gas production activities down 21.5% between 2018-21.

Last year, flaring on the UK Continental Shelf was at a record low, having been cut by 20% to 25.8 billion cubic feet of gas, a reduction equivalent to the annual gas demand of 130,000 UK homes.

EnQuest, Equinor and Spirit all cooperated fully with the NSTA’s investigations, conducted their own internal reviews and have taken steps to avoid repeats of these breaches.??

Jane de Lozey, NSTA Director of Regulation, said:

“The NSTA is committed to supporting the UK’s energy security and lowering greenhouse gas emissions, including through the use of our robust consenting procedures, which drive down flaring and venting.

“We are encouraged by recent improvements on emissions and will take action to ensure this vital work is not undermined by companies who fail to meet their obligations.”?

Equinor uses an allocation model to measure flaring volumes for the Barnacle Field, whose production is mixed with oil and gas from other fields and processed on the Statfjord B platform in Norwegian waters. As a result, the exceedance of the flare consent on Barnacle did not result in an overall increase of CO2 emissions from Statfjord B during the period of breach. The breach of the consent was in essence an administrative breach. Nonetheless, Equinor was in breach of its UK flare consent for Barnacle for four months.

Spirit’s mechanisms and management oversight were not sufficient to prevent the failure to comply with the licence conditions for the Rhyl Field between 2018-20 and the Ceres Field between 2019-20.

#energysecurity #netzero #energytransition