Norway is often seen as a role model for renewable energy within Europe. However, if one takes a closer look a contradictory reality is emerging: Norway’s economy is largely dependent on gas and oil exports. Paul Hockenos goes in-depth.
Norway gladly projects a squeaky green image to the wider world: nearly 100% renewable power supply, champion of electric mobility (see post on e-shipping), vocal proponent of international climate treaties, tiny domestic carbon footprint, and world-class innovator in cleantech. Norway boasts being “a source of inspiration in the fight against climate change.“
But one only has to scratch the surface to find an ugly underside to all the self-congratulatory back-patting. Norway is a giant among Europe’s gas and oil producers, and is currently developing yet more new oil fields in the North and Barents Seas. In fact, its highly lucrative energy sector has no plans to stop exploring new fields and drilling until the last drop of oil is gone – as long as the demand is there.
The numbers are staggering. Second only to Russia in Europe, Norway pumped 1,647,975 barrels of oil a day in 2016 and its natural gas extraction is even more prodigious: 123,200 million cubic meters in 2016. In terms of oil production, the UK is second, a long way down the list after Norway, and the next closest European nation in gas production is Romania with just 7% of Norway’s volume.
Norway supplies a quarter of Europe’s gas and is the third largest exporter of natural gas in the world. Norway exports almost all of its gas and oil abroad as its electricity supply is nearly completely hydroelectric. Its fossil fuel sales equal that of the entire rest of the economy combined.
Norway’s greenhouse gas emissions may be quite low, but if one counts all of the emissions that it “exports” abroad with its petroleum sales, it then becomes the seventh largest emissions emitter in the world! This is quite a spectacular indignity for a little country of just five million people, especially one that calls itself a climate leader.
Of course, the Norwegians know that the world’s oil, gas, and coal in currently producing fields and mines is more than the world can burn if it wants to limit global warming to less than 2 degrees celsius. And Norway still has the equivalent of about 47 billion untapped barrels of discovered and undiscovered oil and gas. An excellent report from the watchdog group Price of Oil underscores that Norway, among other petroleum producers, has to begin to ramp down its fossil-fuel production now. It calls the way forward “managed decline,“ which it defines as “restricting new fossil fuel supply projects and carefully managing the decline of the fossil industry over time, while planning for a just transition for workers and communities. This path gives us a likely chance of achieving the goals of the Paris agreement and avoiding the worst impacts of climate change.”
But there’s no sign that Norway’s politicos are about to embark on this path. It intends to continue drilling to 2060, at least, if there are reserves in its offshore fields. The head of the Norwegian Petroleum Directorate (NPD) said that by 2022 the combined output volume of oil and gas from the country’s fields could approach the highest on record. “This is very good news, because everybody is talking about a phasing out of the Norwegian petroleum activity and, at least in the next 10 years, we don’t see that,” NPD Director General Bente Nyland told Reuters. This, she said, will require an increase in exploration in both mature and frontier areas. In this vein, investments, excluding exploration cost, are expected to rise in 2018 to $15.13 billion, and climb higher in 2019 and 2020.
The government says – lamely – that its production will fall off as world demand for fossil fuels decreases… Apparently, 185,000 Norwegian jobs hinge on oil extraction alone.
Experts counter that in order to cap climate change at 1.5 degrees Celsius, emissions need to be chopped in half by the early 2030s and reach zero by 2050. In fact, argues Price of Oil, Norway’s proposed expansion and projected exploration would generate 150% more emissions than what is in its currently operating fields.
Norway is a very wealthy country with many resources, including its cleantech sector. It could and should lead the way among petroleum country, showing by example that producers can kick the habit without triggering mass unemployment and recession. Price of Oil rightly calls on Norway to:
- freeze further leases or permits for new oil and gas extraction projects or transportation infrastructure that would incentivize additional exploration;
- publicly commit to managing the decline of the fossil fuel industry within the Paris goals of 1.5 degrees Celsius or well below 2 degrees Celsius;
- redefine global climate leadership by setting a global precedent to manage the decline of existing production in line with climate safe limits while ensuring a just transition for affected workers and communities.
Hopefully the government-appointed Norwegian commission, composed of expert academics, will take these calls into consideration when it presents its finding on climate-related risks, ranging from physical threats to the impact of changes in energy consumption on the value of its oil and gas resources. It will make recommendations to the government – though they aren’t binding.
I can ‘t agree. At least they’re doing wonderful things with their profits. And then they should be the first to stop producing oil and gas? No they should be the absolute last ones.
Plus it’s very naive to believe they can make a change. If they produce less oil, other countries will just fill in the gap.
I couldn’t disagree more with this article. Oil should go, but not now. Let them invest their profits the way they’re doing.
Joris, Norway isn’t investing its profits, it is sitting on 1 trillion dollars in savings tucked away in its sovereign wealth fund. I am with you in that this article is…simplistic at best. Everyone knows that Norway is an oil exporter. That’s why they developed CCS, for instance. Coz they didn’t want to stop emitting CO2, they wanted to have their cake and eat it too all the while feeling good about it. Urging Norway to stop drilling isn’t enough though. We need to stop consuming oil and gas, at which point they will be forced to stop. But that is unfortunately not going to happen anytime soon, because our grids in W Europe run on fossils like it’s nobody’s business. Therein lies the problem. Suppliers will of course drill so long as it is profitable to do so. We can’t urge them to stop without offering anything in exchange and will still demanding oil and gas…That is not how market economies work.
No, of course this is not how capitalism works – therein lies the problem.
But in terms of fairness and purely market-based “rationality”, asking an gas/oil-producing nation to volunteer to leave the oil and gas in the ground despite the fact that there’s plenty of demand is basically the same as asking Germany (well, mostly the Swedish Vattenfall and the Eastern Europaen sucessor owners of the mines, actually) to stop mining the vast stores of lignite under the country and using it to export record amounts of cheap electricity that France and the Benelux states are happy to buy (and to provide thousands of jobs in chronically poor and high-unemployment areas). And nobody but the companies themselves and the mining unions representing their employees sees a problem with demanding that sacrifice for the sake of the environment and the long-term survival of human civilization as a whole.
This article hits home a very important point, having lived in Norway for some years, the country has relied on oil since 1968, taxed it’s population very heavily 54.8%, car fuel is USD $2.50+
Norwegian people seem to be under the misconception that Norway is s green environmentally country.
Main industries include oil/gas, logging, engineering, all large polluters. Even though the oil is exported, most of it’s 2 million barrels per day, other countries use the Norwegian oil which produces 859,607,463 tons of Co2 per day! That’s a large amount of Co2 per year, 313.7 BILLION tons of Co2, just from oil.
If that’s not hypocrisy, what is?