The Oil and Gas Authority has announced its first award of a carbon dioxide appraisal and storage licence to Pale Blue Dot Energy for the Acorn Carbon Capture and Storage (CCS) Project.
The OGA has been the licensing authority for offshore storage (except within the territorial sea adjacent to Scotland, where the power lies with Scottish ministers) since 2016. Two carbon capture and storage licences were issued by DECC (now BEIS), its predecessor in this role, one to National Grid in 2012 and one to Shell in 2013.
The OGA administers the licensing regime for the offshore storage of carbon dioxide created by the Energy Act 2008. Together with the Carbon Dioxide (Licensing etc.) Regulations 2010, this Act transposes into UK law EU Directive 2009/31/EC on the geological storage of carbon dioxide. The regime applies to storage of CO2 in the UK’s territorial sea and the area designated as a gas importation and storage zone (GISZ) under section 1(5) of the Act.
This licence award has been made to Pale Blue Dot Energy (Acorn) Ltd (PBD) for the Acorn Carbon Capture and Storage (CCS) Project which seeks to re-use existing oil and gas infrastructure for transporting and storing carbon; and to repurpose or rebuild an existing CO2 capture facility based at the St Fergus Gas Terminal. PBD has been awarded an ‘Initial Term’ CO2 Storage Licence for a four year period. The licence grants authorisation for offshore exploration for the purposes of selecting a site for CO2 storage. PBD has also been awarded a Lease Option by Crown Estate Scotland. These documents together allow PBD to undertake the detailed characterisation work required for a full Lease and Storage Permit to permanently store CO2 in the Acorn CO2 Storage Site. The Storage Permit will set out the requirements that the Developer must follow during operations.
This award follows on from the announcement by the Government in November of “UK carbon capture usage and storage deployment pathway: an action plan” published under the Clean Growth Strategy, which sets out the next steps government and industry should take in partnership in order to achieve the government’s ambition of having the option to deploy CCUS at scale during the 2030s, subject to costs coming down sufficiently.
When exercising its functions under the Energy Act 2016, the OGA is required, inter alia, to have regard to the development and use of facilities for the storage of carbon dioxide, and of anything else (including, in particular, pipelines) needed in connection with the development and use of such facilities and has stated that it continues to work closely with the government and others to identify existing UKCS infrastructure which could be re-used. The OGA asks operators, as part of approving any cessation of production plans, to show that they have considered economic development opportunities, including the CCUS potential, for any infrastructure and will report on this issue in its role .as a statutory consultee to the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED), in relation to operators’ decommissioning plans. CO2 also has potential for use offshore for enhanced oil recovery (where gas is pumped into oil reservoirs to improve the flow of oil).
Pale Blue Dot Energy has suggested that this first project will allow Scotland to use legacy oil and gas assets to deliver environmental benefits, unlocking CO2 transportation and storage solutions for other CCUS projects along the east coast of the UK.
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