2. Andy Samuel, CEO of the North Sea Transition Authority discusses what is required of leaders if they are to face their social, economic and planetary responsibilities

Can leaders plan for a future in which the true wealth of energy is shared? Do they have the skills and support needed to take hold of a complex situation, keep the lights on and transition towards net zero?

Elaine Herdman-Barker, Chair of Global Leadership Associates and Partner for Mutual Growth and the search for the Common Good and Andy Samuel, CEO of the North Sea Transition Authority discuss what is required of leaders if they are to face their social, economic and planetary responsibilities.

Read our accompanying article to this episode here. 

Transcript

I'm here with Andy Samuel, CEO of the North Sea Transition Authority, previously known as the Oil and Gas Authority. We're talking about energy as a public good, asking, can our leaders work with today's complexities and plan for a future in which the true wealth of energy is shared? We're also speaking at a time when oil and gas companies appear on the wrong side of public debate. Language is now brutal, as scorching temperatures bring the reality of climate change home. The UN Secretary General, Antonio Guterres, recently warned that fossil fuel companies have humanity by the throat, and are using scandalous tactics and false narratives to distract us from the risks we face. Meanwhile, the industry's profits are soaring and people, particularly the world's most vulnerable, are expected to suffer. The picture, of course, is far from simple; we've all become acutely aware that our world is not yet geared up for living without fossil fuel, so what do we do? And Andy here is right in the midst of it all. For the last eight years, he's been tasked with optimising the UK oil and gas production, while leading a transformative North Sea energy transition. You really are right in there, Andy. How is it to be working at the heart of our earth's issues, and what are we to do?

Thank you, Elaine, and a big question! I think the first thing I'd like to say is it's a real privilege, the role I've got. We have access to leaders, we have convening power, we see a huge amount of data and we try and be very evidence-led, but we also create a real purpose in what we do. And with that comes a real responsibility, because we are at crisis point and we have been for too long, actually. And the reality is, the climate emergency is speaking loud. We have possibly or probably passed some irreversible tipping points, and I personally find that terrifying. Whether it's what's happening in the Arctic and in the Antarctic, the permafrost changes in ocean circulation and reefs, these are massive changes, and who knows what that really means for the future? So there's a real urgency, and that's why I was delighted when we moved from being the Oil and Gas Authority to being the North Sea Transition Authority, very much signalling that it's all about transition. You also mentioned that we're not yet geared up and we're decades, arguably, behind where we should be. In the UK, we still rely on oil and gas for 75 per cent of our energy needs, so with the best will in the world, we can't just switch it off overnight and move to renewables.

I think the good news is, I believe there's growing consensus, actually helped by the tragic events in Ukraine, that renewables are the obvious destination and we all need to get there quicker. There are still some technical issues to solve with renewables, particularly around intermittency, but I'm entirely confident that they can be solved, and solved at pace. We now need a master plan, though, to actually affect the transition. There is a lot of wind power that needs to be installed, and that also needs to take account of other uses of the North Sea, including fishing, but also the biodiversity. So even that transition is not straightforward. And I think through that, though, we do actually have a duty to keep the lights on: this notion of energy as a public good. In the UK, therefore, actually, with industry and government, there was a deal brokered called the North Sea Transition Deal, and I actually think that's an exemplar for other nations to follow; and many other countries are deeply interested in what we are doing in the North Sea. And whilst there is a natural tension, and I believe a healthy drive to do more, I think there's also power and stepping back and actually acknowledging what's actually happening.

So we've already cut emissions through the oil and gas industry by 20 per cent since 2018, but we got the industry to commit to actually halving them by 2030, which is no mean feat. And with the Climate Change Committee, we're actually pushing even more aggressively for a 68 per cent reduction. That would be massive. It is achievable, it requires extraordinary acts of leadership and collaboration. But I guess the point I'm making there, is there is already a plan in action, there's work to do to add detail to it, but this has been a good debate over the last couple of years, and I'm encouraged, but there's an awful lot more still to do.

Thank you, Andy. And there's so much in there that I'd just like to gradually unpick, one being the question of time, which I'll come back to. The other is the systemic nature of the issues that you, and the rest of us are facing. I can imagine feeling confounded by the complexity that's in front of you, and you mentioned extraordinary leadership, and I wonder what that looks like. Are we looking for a new form of leadership, do you think?

We are, I believe. Looking back on what we've - and I think, well - we were brought in to really drive collaboration, and actually get industry, government, regulators working together in a very different way. And when we started, the question was all around optimising oil and gas, but now it's become much broader, and we're having to get sectors that haven't worked together to actually work together in very different ways. I think hopefully, through the pandemic, people had a bit of time to reflect, and I certainly was in more conversations with leaders where they reflected on the interconnectedness of everything. I firmly believe that everything is connected, and the leadership required is to understand the whole system and the complexities, and the non-linear nature of how things play out. But not to be paralysed by that, but actually to choose a bit of wise action, constantly adapt to be agile, be really open and curious, though, and collaborate. I have some examples where this is happening, so maybe it's easier to talk through that to kind of illustrate it, because a lot of what we do now offshore is directly impacting the onshore - again, this interconnection.

Just last week I went up to the Liverpool Bay area. So this is North Wales, and the northwest of England. It's an area where, with Eni, an oil and gas company, we partnered and actually issued a carbon storage licence a few years back. This is so that they can use depleted gas fields, repurpose the infrastructure and actually store carbon. What was really heartening last week, was we visited four of the 40 onshore industrial users who are now looking to use that offshore facility to store their carbon and also to use hydrogen as an alternative, much cleaner fuel. It's blue hydrogen, where, again, you need to store the carbon. So we visited a cement plant that's looking to take out 800,000 tonnes a year of CO2. This is massive, out of the system. We visited one of the largest refineries that's looking to half their emissions, and also create the largest green hydrogen facility in Europe. We visited a glass manufacturer that's looking to reduce their emissions by 90 per cent. And we visited a waste recycling centre with combined heat and power, that's looking to take the carbon dioxide out of there. All of these different industries working together, actually under the current government scheme, partly in competition, but putting that aside and saying, we need an interconnected system that stores the carbon, that has hydrogen distribution and we're in it together, because this is important, given the climate emergency.

And, actually, we think it's going to be good business, because going forward, consumers will hopefully choose clean glass, they're going to want cement that has much lower carbon, they're going to want to know that their waste is being put to proper use, and they're going to want to know that the refineries are doing the right thing. So I personally was hugely heartened, and what I saw there was leaders stepping up and saying, we're making a stand, we're putting the environment first, but we can convince our shareholders this is good for business, we don't need to put these in opposition. Actually, good business is good for the environment.

That's a great example, Andy, of combining the social responsibility and the economic viability. And I wonder what has enabled that to happen, because I have heard you speak before about the importance of broadening participation, broadening it out at a local and a national level, so that, as you say, leaders come forward and engage with the issue at hand. What has enabled that, do you think, to happen?

So, really, seeing the whole picture, the bigger system and how working together creates value and opportunity, we did it for the whole North Sea a couple of years back. We published a study, our energy integration study, which basically showed that rather than just being an old, difficult oil and gas province, the North Sea is one of the crown jewels in the UK and will provide 60 per cent of the UK's carbon abatement requirements through carbon storage, through offshore wind, through hydrogen. When we first came out with this, people said, well, look, it's interesting, but it was little more than that. Over the period of two years, it's now become mainstream. So I think just putting these ideas out there, letting them percolate, letting the people see the possibility, we've now got down in the Bacton area, similar to the HyNet and the Liverpool Bay area, people are now taking that vision in the local context, and turning it into reality. So we can start to decarbonise a lot of the power to London, for example, one of the major cities obviously in Europe. So I think it's showing the possibility, and then finding leaders who are willing to take a risk, be bold and actually just open up to each other, and be transparent on their business models, work together, and be less competitive.

The tone of what you're saying seems to be much more about uniting together, rather than struggling against. So it's almost a more peaceful - if I can use that word - a more peaceful movement than a fiercely competitive, would that be fair to say?

Absolutely. Why do we need to be competitive? There's more than enough opportunity for everyone. This transition creates so much opportunity, and I was very pleased to see in the US, it recognises that through this transition, doing the right thing creates huge opportunities for business; and we don't need this struggle, we don't need this polarisation. I think there's about 370 billion of investment will come through that. The most important thing, though, is the US is hopefully now on track to reduce emissions by 40 per cent by 2030, which is massive for the States, and one of the largest emitters globally. A whole system view of a transformation across a whole set of industries, power and industrial use, and it's very exciting.

And it also speaks to an idea of getting on the road together, which is, I would say, is a shift in thinking at a leadership and an organisational level and hints at sharing; sharing of wealth, sharing of power. Do you think there is that willingness to share issues like wealth, power, control?

I think we've got a long way to go, so I've highlighted a couple of standout examples we would like to see a lot more. You asked right at the beginning, with the privileged position we have, we see a lot of different companies. And I think one of the things we constantly try and do is take the best and inspire others to do the same, and I think this is massive cultural change actually, we're looking at within companies. On a positive, the industry that I tend to work with the most, the oil and gas and energy industry, transformed its safety culture. And now looking to do exactly the same around its kind of environmental, and particularly the emissions culture. And it did that through a lot of process, but also a lot of hard work, I would say, helping people… Fundamentally change their beliefs, that actually doing good in this way is good for business, but, yes, you may make a slightly smaller margin, but it's sustainable. And, ultimately, if you lose your social licence to operate, you've lost. And so this is good business, but, yeah, it's not yet factored in as much as I'd like, into the kind of [unclear 14:29] reporting cycle, the bottom line. I think it will, I think it has to. Encouragingly, I'm not seeing many companies use the current, very dire security of supply crisis and affordability crisis, as an excuse to kind of go back completely to the old ways, and give up on the transition - quite the opposite - and that was a risk. I know of a number of companies, for example, and they're looking to go public on the markets, and they're under as much pressure as ever from the ESG side, to demonstrate that they're on the right track for 2030. So more and more, I believe good businesses is the right business, but to really change these cultures, we've got a few years of work ahead, for sure.

And looking at time, it was something I was hoping to come back to. It's at the centrepiece of organisational life, isn't it? You were in the oil and gas business for a very, very long time and do it faster, do it now. Do you feel that organisations will be able to bring that sense of urgency, that same sense of urgency with achieving targets, delivering into their drive for net zero?

Yes, if they transform the culture, because it's not there yet. Yeah, I think actually they need to go - I would like to see companies go right back to purpose, actually, and their values and really kind of… We've done that in the North Sea Transition Authority, and quite kind of intuitively, I think, redefined our purpose as the context has changed, as the needs of the government, society have changed and that's been hugely energising. We just, at our last offsite, didn't fundamentally change our values, but changed the definitions to bring them up to speed with our current mission, and that really then helps us with day-to-day decision-making, and actually makes things congruent, because we felt an incongruence. Whereas I think companies have not yet done that work, and I would really encourage it. I think it's hugely value adding, and it's creative. Our team certainly got a lot of value and energy from it, and then you can start to do things at pace. But you've almost got to go a bit slower initially, and reflect, have difficult dialogue, really iron out what do you really stand for, and then you can go at pace. At the moment, things are still geared up too much for the current paradigm, and just the continued oil and gas extraction, and that's clearly not sustainable. I don't think it's actually what the shareholders really want, and it's not what the companies say, but their systems, process and culture are still geared up for that, largely.

And it also comes down to the individual, does it not? What are the values and the principles of action for individuals? I was thinking about, you said difficult conversations and engaging with wider communities, and bringing them together can be a bit painful as well, can't it? A bit exposing. So something is also required of the individual to have a sort of a place to go to, and an inner resilience to work through what can be uncomfortable situations. Do you see that as being something for organisations to work on, and support individuals with?

I do. I mean, maybe starting personally, I found it very uncomfortable a couple of years ago when the industry really started being under attack, and I had to look at my role, my organisation's role, and actually deeply reflect. And through that, took to my board the proposal that we actually fundamentally change our strategy, get into action in a very different way, and become effectively a regulator of emissions. And I was delighted to get the support, but it came from a very uncomfortable few months. But I valued that, and - but it's a great question: how do we support staff through that, to make it a positive experience? And I expect that we will continue to be uncomfortable, and things are shifting so quickly. The bit that I think we all find difficult, and I think is regrettable and I don't have an answer to, is I think the polarisation goes too far. It can actually be very hard to kind of get to the truth, if there is such a thing of any matter. And, again, I have a privileged position where I sometimes see what I… Pretty much close to the truth, but the way things are reported, it's either brilliant or terrible, and that doesn't help people on what are genuinely quite tricky, nuanced debates.

What I think, again, if I look at some good examples, I think what the Climate Change Committee did with their citizens assemblies, is something we can all learn from actually getting a truly representative cross-section of society, informed by real experts with the luxury of time to really debate difficult issues. The recommendations that they came up with, I think are brilliant. And if I was a policymaker, that's the wisdom I would be encouraged to tap into, just taking a very simple example that constantly kind of troubles me, but aviation and how much anyone should fly, because currently it's utterly unsustainable. Their recommendation was, well, maybe we can all benefit from one relatively low cost flight, but after that we all need to pay an awful lot more: effectively the true cost of the carbon. That seems very common sense to me and if it's kind of endorsed by a representative group, what not to like? So I think there's real wisdom in that kind of dialogue, but we need people to be open to each other, and if we can somehow take out… I mean, the activism is good, and we need it. But what I don't like is the distortion of facts from both sides of the polarity, because actually we do need some real evidence and some real facts that support the right roadmap through this transition.

It can be very seductive, can't it, the polarisation? As I was preparing for our conversation today, I was noticing words that are in the air - scandalous - the word I mentioned earlier. Deceitful, profiteering, gambling, all to do with the oil and gas. What toll does this take on leaders in organisations? And we become influenced by our environment, and how the world is seeing us. Is there a risk that by this language that's being used, may understandably being used, leaders begin to withdraw? That they become more defensive, that they don't want to engage in the very things that you are advocating that they get involved in, which is more open dialogue, which is bringing more people together of different views and ideas to create, almost like a thunderclap that creates a freshness, because that's where the disruption to patterns come from. Have you got any views on that, Andy, on this toll on the leaders?

Yeah, we see it and often it's exactly the talent and leaders that we desperately need for the future, who are most impacted by it and retreat, or, in cases, withdraw entirely from an industry that actually needs that talent to work from within, to create a better future. So it is a concern, and it's a real balance, because I personally, increasingly welcome the activism. I think it's vital, but it's how it's done and I think if we can take a bit of the judgement out, depersonalised, but there is room for emotion. But it also makes it quite easy for the wrong leaders to dismiss it, when it becomes so extreme. So, yeah, I think at the moment the balance has gone too far.

Looking to the future, what is the future for leaders in the energy industry like? What is good leadership going to be, do you imagine?

I think it's really exciting. Many companies are redefining themselves as energy companies. Like I say, I'd like to see them starting with the purpose. Some say it's all around solving the energy trilemma, so clean, affordable, sustainable energy. If that's truly the case, why still so much emphasis on oil and gas? Why not more pace and urgency on the renewables? So I'd like to see a kind of authentic kind of redefinition. There's still - don't get me wrong - clearly a requirement for more oil and gas, but I think everyone's got to really challenge themselves that it's consistent with one and a half degrees, and I'm not seeing enough on that. I think in terms of inspiring teams, I think technology is going to have a huge role to play. I'm on the board of the Net Zero Technology Centre, and it's amazing some of the new ideas, innovations that are coming out - very exciting. I've already talked about some of the things we're supporting, like the carbon storage, because, unfortunately, we're at a point now where authorities like the Climate Change Committee are very clear we need these technologies. I wish we didn't, but we desperately do, so a huge amount of innovation to actually really optimise these things, do them at scale.

But I think, above all else, and we see this in the North Sea, it's taking a kind of integrated systemic view. There's simply not enough space in the North Sea for everyone to work in isolation, and do their little bit. We see this with offshore wind, and we need a grid system rather than individual kind of connections. But we also need to kind of work out how that's going to work with the carbon storage, how it's going to work with the hydrogen. So much more visionary, much more interconnected, that therefore brings in government. So we need industry, regulators, the government, to work together even more closely than they've done in the past. And we need, therefore, better relationships and real trust, less lobbying and more kind of grown-up conversations, listening, respect. At the moment, I'm not seeing the trust that's really going to be required to achieve this transition, at the pace that the climate, that emergency demands.

Andy, you are, after eight years, coming to an end of your time at the Transition Authority, what now for you? What are you looking forward to?

Yeah, so I qualified as an executive coach, and I'd love to do more coaching. If any listeners are interested in this kind of conversation, it would be great to connect. I think hopefully, particularly helping leaders do this at pace, working together in very different ways and it's my passion. I've moved down to North Devon, and we've got an 85-acre coastal farm that we're actually managing for biodiversity. We're actually in the North Devon Biosphere, so I'm working with the team there who are just brilliant. So we've planted thousands of trees and next step, hopefully, is getting onto some wild flower meadows. We've also got space here to create retreats, so I'd like to combine some of my coaching, potentially, with teamwork, some kind of a community space. We're building a yoga teaching centre. I'm a big fan and there's increasing research on the kind of restorative power of nature, and we're in a beautiful part of the world and people just come down. Some kind of pro bono work, working with communities, just making what we've got on our doorstep much more widely available to others, I think would be something I'd love to do.

Wonderful, Andy. Thank you so much for your thoughts today, and wishing you the very best!

Brilliant. Thank you very much, Elaine.