Energy News Today

Arctic Dilemma: How to Cut CO2 and Live Off Oil Money?


Equinor ASA’s West Hercules drilling well No. 100 at the Nunatak prospect in the Barents Sea, shown here in 2013. (H/t Ole Jørgen Bratland/Equinor)

 

By Heather Richards, Energywire, E&E News

 

In many ways, the challenge of addressing climate change is playing out in one Arctic nation that says it wants a low-carbon future but lives off oil money.

Norway recently announced plans that it would expand oil and gas offerings in formerly off-limit areas of the Arctic, a move that’s angered climate advocates and highlights the challenge of reducing reliance on the industry. Surplus oil revenue over the last few decades has fed the country’s now $1 trillion sovereign wealth fund — similar to Alaska’s oil fund — which Norway invests in thousands of companies and real estate worldwide.

Norway is largely powered by hydroelectricity and ranks low on the list of direct emitters of greenhouse gases worldwide, but its exported oil and gas that’s later combusted accounts for about 2% of the world’s oil supply and the sector represents about half the value of the country’s annual exports, according to the Norwegian Ministry of Petroleum and Energy.

The country also has committed to carbon neutrality by 2030, was an early signer of the Paris climate accord, and offers citizens generous subsidies and perks for electric cars.

Now, the Norwegian Petroleum Directorate, which oversees oil and gas production and licensing, has proposed to expand areas available to oil and gas companies deeper into the Barents Sea, potentially offering 125 blocks, mostly west and north of currently producing areas in the Arctic Ocean.

The prime minister is emphasizing the need to retain the workforce and revenue tied to oil and gas, particularly in light of the COVID-19 pandemic. The Norwegian Ministry of Petroleum and Energy recorded a total net cash flow of 257 billion Norwegian krone ($27.4 billion) from its oil and gas sector in 2019, but estimates a drop to NOK 98 billion ($10.5 billion) this year due to the pandemic.

Norway’s minister of petroleum and energy, Tina Bru, said in a statement recently that the proposed drilling expansion was necessary to save Norwegian jobs and that new exploration would be “crucial to maintaining activity on the Norwegian continental shelf.”

But environmental groups were quick to condemn the move as backpedaling on climate progress that could undermine the Nordic country’s leadership on driving down greenhouse gas emissions worldwide.

Frode Pleym, head of Greenpeace Norway, called it a “shockingly arrogant and unscientific” decision with added significance, considering Norway’s recent election to one of two impermanent seats on the U.N. Security Council.

“Pumping up more oil takes away Norway’s green credentials and leverage towards other countries on combating the climate crisis,” Pleym said in an email.

The government has yet to approve the expansion into frontier areas for the new licensing…



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2020-07-09 20:23:59

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