‘Energy security is a matter of national security’ – full speech by Offshore Energies UK CEO Deirdre Michie at this morning’s annual Business Outlook Breakfast Briefing

Offshore Energies UK (OEUK) today published its first Business Outlook report since evolving into the leading trade body for organisations representing offshore oil, gas, carbon capture and storage, hydrogen and wind.

Speaking at a breakfast briefing in Aberdeen’s P&J Live today (29 March), OEUK Chief Executive Deirdre Michie OBE delivered a keynote speech to launch their 2022 Business Outlook. She spoke about the impact of Russia’s invasion of Ukraine, UK energy security and keeping the country’s net zero goal on track. You can read the full transcript of the speech below.

Access full PDF of OEUK’s Business Outlook report via a link in this press release. The Business Outlook comes a day after OEUK published its energy security plan for the UK.

Deirdre Michie OBE, OEUK CEO – Business Outlook speech transcript

1. Good morning everyone and thank you Jenny.
2. It is indeed a great pleasure to be in the room with you all again – even though it means we are going to have to get used to the early starts again after 2 years of lie ins!  So, thank you for joining us. 
3. I’d like to add my own special thanks to our sponsor Deloitte for their ongoing support of our Breakfast Briefing series for 2022 – as Jenny said we are really pleased to have their partnership once again.
4. And of course, a big thank you to our guest panellists from me and to my colleague Ross – author of the report that is being presented today.
5. Before I hand over to Ross, I’d like to take the opportunity to say a few words…

6. I had hoped to be able to start more positively – talking about how we’re emerging from the global pandemic, and therefore starting to see some small green shoots of recovery.
7. And while some of this maybe true… it’s so important to acknowledge the dreadful situation in Ukraine. 
8. OEUK wholeheartedly condemns Putin’s invasion, and our thoughts are with the Ukrainian people at this truly awful time. 
9. We’re fully supportive of the sanctions the UK has put on Putin and his government, and of the UK’s commitment to phase out their oil and gas from our energy system.

10. We’re also in action – with our plan for clean and secure energy. 
11. It speaks to what we can do in the short and near term to support domestic supply, while continuing to drive the energy transition – something I will come back to.
12. We’ve formed a cross industry Resilience Group to help align activities including in terms of humanitarian support.
13. I know many companies here today are doing what they can and OEUK is working with the councils in the northeast to provide support to our colleagues in Naftogaz, the Ukrainian oil and gas company and we will continue to share information about this in our communications to you from the RSG.
14. Any help and support for this important activity would be most welcome and please speak with my colleague Mark Wilson – our HSE Director who is leading on this for us.

15. So, the world is changing fast, and the events of the last few weeks have had major global impacts, on top of those ongoing effects we continue to see from the pandemic.
16. As we watch the geopolitical and humanitarian crisis unfold in Eastern Europe, energy has come under the spotlight once again, for all the wrong reasons.
17. The volatility and escalation of the commodity price crisis is causing real harm to the consumer and economy and no one in our sector wants to benefit or profit from such dreadful events.
18. But given all that is going on, we do have a very important role to play…
19. Because what is becoming clear is that energy security is indeed a matter of national security.
20. But we can be part of the solution here… just as we were during the COVID crisis over the past two years.
21. Looking back on the pandemic, we worked hard to keep our people, and our operations safe, whilst never sacrificing the UK’s domestic energy security.
22. Our colleagues kept going throughout the many lockdowns – working to meet more than half of our energy needs in 2021.  That is something we should all be really proud of.
23. On top of this, it’s fair to say that our focus didn’t falter when it came to the energy transition and net-zero, either.
24. In fact, in the midst of that very challenging time, industry made big strides in terms of its commitment to the transition.
25. A great example of this was the signing of the North Sea Transition Deal with the UK Government.
26. The Deal is a landmark agreement – and the first of its kind by any G7 country.
27. It recognises the role our sector is playing in the UK’s journey to net-zero
28. It speaks to how we will reduce our own carbon footprint, while using our knowledge and expertise to unlock other low carbon sectors like CCS and hydrogen,
29. All while never compromising on the UK’s energy security.
30. It’s been a year since we signed that Deal – in fact, we celebrated its first anniversary last week.
31. Throughout the year, we’ve been working hard to turn the deal into a reality.
32. From reducing our emissions by 10%, meaning we’re well on our way to meeting our interim reduction targets,
33. To kicking off work to map the capabilities and capacity of our supply chain in the emerging energies as well as opportunities for different technologies
34. And, of course, appointing Sian Lloyd Rees, MD of Aker Offshore Wind, as our Supply Chain Champion.
35. I think it’s fair to say, we’re already positively moving the dial but recognise that there is much more to do – particularly when it comes to the electrification of our assets and access to the Grid which is so key to the Deal.
36. Here we need government support in terms of unlocking the regulatory barriers to help drive this forward.
37. We know it’s a massive challenge – but it’s something that we’re equally committed to supporting as it is crucial to unlocking the wind sector and helping deliver on the results of the Scot Wind licensing round earlier in the year.
38. I was very pleased to see so many of our members taking part in that round and thereby it’s a great example of our sector, actively reinforcing its commitment to helping deliver on the climate change challenges that we’re all grappling with.
39. Indeed, Scot Wind is a great example of the transition in action – with our companies, turning their expertise towards unlocking the low-carbon economy.
40. And it also underpins why we too have been in action by evolving our scope to become Offshore Energies UK. 
41. Our members – you in the room today – are wholeheartedly embracing the energy transition and have been for some time.
42. You’re striving to provide the UK with cleaner and reliable energy – whether that’s oil and gas, hydrogen, or wind.
43. You’re investing in important technologies and projects across the length and breadth of the country – like the cluster projects in Humber, Teesside, Merseyside, and North-East Scotland.
44. The supply chain, of course, is already servicing multiple parts of the energy sector, and is itself very focused on reducing its emissions. 
45. Just last week, I visited a member who has changed the fuel of their vehicles to hydrotreated vegetable oil, significantly reducing the emissions of their HGV fleet.
46. And so, by evolving into Offshore Energies UK, we can better represent you – our members – as you underpin the UK’s energy security AND drive the energy transition forward.

47. Now, we all know that this transition won’t happen overnight. 
48. It’s something that will take time, effort, and frankly, money.
49. With this in mind, it’s only right to think about this transition with a long-term view.

50. And that’s something we, as an industry, are pretty good at already.
51. Our industry knows how unpredictable the future can be. But we try to manage and be prepared for it.
52. For example, we know the basin itself is in decline and that we need to actively manage this by investing in new projects as well as in existing ones.
53. And we know that if we don’t, by the 2030s, we’ll be even more reliant on other countries – up to around 80% of our gas, and around 70% of our oil.
54. That’s a heavy exposure, and means we’ll be importing from others far more than we currently do today…
55. And whether those other countries can continue to meet our evolving needs, is a key question for consideration.
56. Take Norway for example.  Norway are very reliable partners to us here in the UK. 
57. But it is worth noting that Norway has other customers as well – it’s not just the UK they send their gas to.
58. So, really, we have a choice – do we want to invest in ourselves?  Or do we want to rely on other countries to meet our needs?
59. I know some of you will be wondering how this narrative fits with the IEA’s report that was published last year. 
60. That report talked about not investing in any ‘new’ oil and gas.
61. However, that same report also says that by doing this, many countries, like us, would become more reliant on the likes of Russia and OPEC as a source of energy.
62. This has serious implications for our energy security – now more than ever.
63. And so, we must invest, and we must put our resources into our basin.

64. And we have a huge amount of support for doing this – coming right from the top.
65. From the Prime Minister, who asked ‘would we not be crazy to shut down domestic production?’
66. To Kwasi Kwarteng, Secretary of State for business and Alistair Jack Secretary of State for Scotland, who both reinforce that “the North Sea is really important for our energy security”.
67. And we all know Greg Hands, our Energy Minister, understands our sector and regularly defends it at the dispatch box in front of some more unconvinced politicians.
68. Treasury, too, is supportive.
69. We’ve heard the Chancellor talk about the importance of seeing investment in the North Sea, and I think we were all pleased to hear on Wednesday that despite calls from others, he did not put a windfall tax on the sector as he knows that the regime is already bringing in enhanced tax payments and he understand the benefits that increased investment will bring.

70. The UK Government has absolutely rallied around the sector.
71. And so, if we’re to retain this hard-won support, we must continue to invest.
72. And that means in oil and gas, in CCS, in hydrogen, and in wind. 
73. Investing in all our energies for the long-term.  Investing in the future of the UK.

74. So, while it’s clear the Government recognises the need for stability and support for our vital sector.
75. There is still an elephant in the room.
76. And that is that political cycles and business investment cycles are rarely in sync.
77. So, while we think about our business in years, or even decades, we need the same to happen when it comes to related energy policy development and implementation.  
78. Today, our Business Outlook, along with its usual facts and evidence, also outlines our plan for producing clean and secure energies in the longer term.
79. Because we need a consistent consensus from policymakers across all parties, and all four nations, so that we can continue making progress toward our net-zero goals.
80. We can only keep supplying the UK with diverse energy if we have the right environment in which to invest. 
81. I think we have that now.  But we need to see it sustained.
82. And that means an alignment of regulations, fiscal policies, and political ideologies
83. Our policy makers need to be planning ahead for decades as well as for upcoming elections and making appropriate interventions now.

84. Our country’s 2050 net zero ambitions are almost three decades away.
85. It’s a commitment that all our politicians have agreed to align around.
86. But they all need to understand that this commitment is, of course, inextricably linked to energy.
87. Which is why we need to think about energy in the short and long term as well.
88. In doing this, it will bring certainty to the transitioning sector, its companies, its supply chain, and its people.
89. And we need to do this now.
90. Because as I said earlier, energy security is now a matter of national security.
91. So, do we invest to protect our own domestic energy, so that it delivers security of supply while underpinning the net zero transition? 
92. Or do we leave it to chance? 
93. I think I know our preferred answer…

Ends

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