Norway: green ambitions and oil exports

2009-01-29

in Canada, Economics, Politics, The environment

Dylan Prazak

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.

Report a typo or inaccuracy

{ 11 comments… read them below or add one }

R.K. January 29, 2009 at 1:58 pm

“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.

. January 30, 2009 at 9:08 am

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.

. May 19, 2009 at 4:20 pm

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.

. May 21, 2009 at 4:32 pm

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.

Milan May 21, 2009 at 4:33 pm

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.

Dylan November 27, 2009 at 9:46 pm

i think that is a nice pic, that kid looks really viscous.

. August 27, 2010 at 2:41 pm

“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.

. October 20, 2010 at 10:42 am

The Organization for Economic Co-operation and Development in Paris, however, can’t be so easily dismissed. In diplomatic language, the organization tore a strip off Alberta for its short-sightedness in energy policy. In contrast to Norway and Chile, the OECD found that Alberta isn’t building up a fund from oil and gas revenues to be used for the benefit of future generations.

Worse, the government transferred $3.6-billion from its Alberta Sustainability Fund to pay for its deficit this year. Worse still, said the OECD, the government intends to keep drawing down the fund until it has fallen to $4.7-billion from the $16.8-billion it reached in the 2007-2008 fiscal year.

Norway, by contrast, saves all its oil and gas royalties, drawing down just 4 per cent of the fund’s value each year – so future generations of Norwegians will benefit from today’s bounty. Today’s generation of Albertans, however, is hogging the revenues and building up a pittance for the future. Me, me, now, now seems to be the attitude of Albertans and their government.

. November 25, 2012 at 4:36 pm

So much for Norway’s eco-friendly image

By George Monbiot, published on the Guardian’s website 20th November 2012

One of the biggest political shocks of the past decade has been the transformation of Canada. Under the influence of the tar barons of Alberta, it has mutated from a country dominated by liberal, pacific, outward-looking values to a thuggish petro-state, ripping up both international treaties and the fabric of its own nation.

Prepare to be shocked again. Another country, whose green and humanitarian principles were just as well-established as Canada’s, is undergoing a similar transformation. Again, it is not the people of the nation who have changed – in both cases they remain, as far as I can tell, as delightful as ever – but the dominant political class and its destruction of both national values and international image.

I am talking about Norway. It is famous for the size of its aid budget, the maturity of its decision-making, its reasoned diplomacy and above all its defence of the environment. Of course there has been for a long time a fundamental contradiction: Norway’s image as the saviour of the ecosystem is somewhat undermined by its massive oil industry. You might already be aware of other contradictions, such as the clash between its protection of wild fish stocks and its destructive farmed salmon industry.

But what I am about to relate cuts to the heart of Norway’s image as a broad-minded, liberal, green nation. It repudiates those advertisements emphasising the country’s natural beauty and astonishing wildlife and suggests that the sensibilities of Norway’s current political class are no more sophisticated than those of the frontiersmen of the Wild West in the late 19th Century.

Tomorrow (Wednesday) there will be a meeting between the Norwegian and Swedish governments, at which Norway intends to lay claim to some of the wolves which live on the border between the two nations. This may sound like a good thing. The government’s purpose is anything but.

. April 7, 2015 at 5:38 pm

Norway, for example, intends to be “carbon neutral” by 2030. Perhaps it hopes to export its entire oil and gas output, while relying on wind farms at home. A motion put to the Norwegian parliament last year to halt new drilling because it is incompatible with Norway’s climate change policies was defeated by 95 votes to 3.

http://www.monbiot.com/2015/03/10/applauding-themselves-to-death/

. November 14, 2017 at 7:31 pm

In Norway an opinion poll in August found for the first time that more people would prefer to leave some oil in the ground in order to limit emissions than to extract it all. This may not influence the Oslo court’s decision. But as citizens’ concerns about climate change grow, so will the prospect of real-life verdicts that resemble Kirkenes’s fictional one.

Leave a Comment

You can use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

{ 1 trackback }

Previous post:

Next post: