This Economist article on Norway should make interesting reading for Canadians interested in questions of energy, environment, and politics. It highlights how Norway is both progressive on climate change – with a carbon tax and a grid almost completely dominated by hydroelectric power – and a major indirect emitter on account of its large exports of oil and gas. Oil and gas sales produced 413 billion kroner ($75 billion Canadian) in revenues in 2008, and such exports have allowed Norway to build up an oil-revenue fund worth 2.1 trillion kroner ($382 billion Canadian).
The challenge of being a hydrocarbon exporter at a time when future human prosperity depends on the fairly rapid abandonment of fossil fuels is an acute one. While carbon capture and storage (CCS) technologies may eventually help square the circle a bit, that is by no means guaranteed. Indeed, placing excessive confidence on the rapid and economical deployment of that technology will leave states in the lurch if it doesn’t deliver as rapidly as promised.
In addition to discussing carbon pricing instruments and oil exports, the article examines the practice of ‘offsetting’ emissions by paying to have them reduced somewhere else, then taking the credit for doing so by counting those avoided emissions against your own. As discussed before, it is an idea not entirely without merit. That being said, it must be rigorously operated, or it will risk being abused.
Norway’s considerable efforts to respond appropriately to climate change deserve to be both applauded and, where appropriate, replicated in Canada. As for balancing the desire to do what’s right against the temptation of cash for dirty fuels, hopefully Norway will opt to show other oil producers that the temptation can be restrained without destroying prosperity, and that there are big opportunities to be found in alternative, renewable sources of energy. Depressingly, it may only be with strong examples of this type elsewhere that Canada will even begin to seriously contemplate such a shift.
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“Yet if anything, Norwegians are moving away from environmental self-denial. A recent rise in petrol tax, of 0.05 kroner per litre, caused a political storm. Many drivers, especially around congested Oslo, are also incensed by the government’s reluctance to build more roads. And there is a growing sense that the government is tying itself in knots in its efforts to square its green ideals with the grubby reality of Norway’s hydrocarbon wealth.
The Progress Party, which has the support of roughly a quarter of the electorate, has seized on these complaints.”
This shows how there is always political opportunity in eliminating self-imposed restrictions. Most governments have a sorry record of raiding pension funds and otherwise taking actions that provide a moderate immediate bonus at a high eventual cost.
Norway’s oil fund drops Barrick stock
The Associated Press
January 30, 2009 at 6:45 AM EST
OSLO — — Norway’s oil fund has blacklisted the U.S. conglomerate Textron Inc. and the Canadian mining company Barrick Gold Corp. [ABX-T] over concerns that their operations violate the fund’s ethical guidelines, the government said Friday.
Textron, with interests that include the Cessna and Bell aircraft companies, was excluded because its defence unit makes cluster bombs, Finance Minister Kristin Halvorsen said. Norway led a drive to ban the munitions in a treaty that was signed by 93 countries in Oslo in December.
Norway’s ruling parties delay oil sands vote
Mon May 18, 2009 8:12am EDT
OSLO (Reuters) – Norway’s center-left government effectively delayed a parliamentary vote on Monday on whether majority state-owned oil and gas producer StatoilHydro should withdraw from a $2 billion Canadian oil sands venture.
The oil sands issue has put the government in a bind four months before a general election, with political opponents saying state support for the oil sands project was hypocritical given the cabinet’s self-professed environmental ambitions.
Affluent Norway — the world’s No. 6 oil exporter and third biggest gas exporter — likes to see itself as a champion of green policies and the government even plans to make the country carbon-neutral by 2050.
It is hard to square such ambitions with activist views that producing oil from tar sands damages the environment and produces large amounts of carbon dioxide emissions.
StatoilHydro shareholders reject tar sands exit
Tue May 19, 2009 3:58pm EDT
OSLO (Reuters) – Shareholders of Norwegian oil and gas producer StatoilHydro overwhelmingly backed the company continuing its Canadian oil sands venture despite attempts by environmentalists to derail the project.
At its annual shareholders meeting on Tuesday, owners with 3.64 million shares voted for Greenpeace’s resolution for StatoilHydro to withdraw from its $2 billion tar sands project, Greenpeace said. Investors representing a further 22 million shares abstained.
The figures correspond to 0.1 percent of total shares backing the oil sands exit and 0.7 percent abstaining.
Excluding the Norwegian government, which owns 67 percent of Statoil shares and voted against the motion, only 0.3 percent of free-float investors backed the plan and 2.1 percent abstained.
The StatoilHydro vote is a disappointment, but I suppose it should not be surprising. After all, those investing in oil companies must still believe that fossil fuels have a future. If you believe that, unconventional options like the Canadian oil sands are among a dwindling number of new investment options.
i think that is a nice pic, that kid looks really viscous.
“The situation is epitomised by my recent trip to Norway. I hoped that Norway, because of its history of environmentalism, might be able to take real action to address climate change, drawing attention to the hypocrisy in the words and pseudo-actions of other nations.
So I wrote a letter to the prime minister suggesting that Norway, as majority owner of Statoil, should intervene in its plans to develop the tar sands of Canada. I received a polite response, by letter, from the deputy minister of petroleum and energy. The government position is that the tar sands investment is “a commercial decision”, that the government should not interfere, and that a “vast majority in the Norwegian parliament” agree that this constitutes “good corporate governance”. The deputy minister concluded his letter: “I can however assure you that we will continue our offensive stance on climate change issues both at home and abroad.”
A Norwegian grandfather, upon reading the deputy minister’s letter, quoted Saint Augustine: “Hypocrisy is the tribute that vice pays to virtue.”
The Norwegian position is a staggering reaffirmation of the global situation: even the greenest governments find it too inconvenient to address the implication of scientific facts.“