Norway’s “Government Pension Fund – Global,” commonly referred to in the country as the “oil fund,” has overtaken the Abu Dhabi Investment Authority (ADIA) as the world’s largest sovereign wealth fund, according to the Monitor Group, with nearly NOK 3,100 billion (roughly USD 570 billion) in the fund today. The news came just a day after further oil development was announced in the North Sea – and soon after Norway received heavy criticism for its oil exploration from NASA’s leading climate scientist.
The news of the oil fund’s size has not come as a big surprise, as many top oil fund managers had apparently confided to newspaper Dagens Næringsliv over the past year that they believed it had become the biggest. Norwegian finance minister Sigbjørn Johnson told Dagens Næringsliv that “even if it is not a goal in itself to be the biggest, it is always nice to record that the fund is growing.” He added that “an ever bigger fond means that we have more money for worthy causes above the state budget” and that his “goal is that the state pension fund will be the world’s best-managed fund.”
The oil fund was founded in 1990, and formerly known as “The Petroleum Fund Norway.” It is managed by Norges Bank Investment Management (NBIM), and subject to ethical guidelines laid down by the Petroleum Fund’s Advisory Council on Ethics. The country has another investment fund, known as the “Government Pension Fund – Norway,” which was worth around NOK 135 billion (nearly USD 25 billion) at the end of 2010 and invests only in Norwegian companies on the Oslo Stock Exchange.
Hansen: ‘Norway not doing well’
The good news for the oil fund came just a day after leading climate change expert, James Hansen of NASA’s Goddard Institute for Space Studies, criticized Norway’s efforts to tackle climate change. “Norway does not do especially well,” Hansen told newspaper Dagsavisen. He said that Sweden had been “quite clever” and “cut a lot” but that “in Norway, the emissions just go up.” The scientist has previously attacked the Norwegian government for its involvement in controversial tar sands projects in Canada, and said yesterday that “we cannot burn tar sands in addition to coal and oil.”
The government’s commitment to help tackle rainforest destruction “does not solve the problem,” according to Hansen, and only helps “maybe a little with their conscience.” “In Norway, politicians plant forests while they extract everything they can, in ever deeper oceans, in Antarctica and in tar sands,” commented Hansen, who is often credited for pioneering research on global warming and coining the term “man-made climate change.”
North Sea development attracts opposition
Environmental organizations within the country were also up in arms yesterday over plans approved by parliament to expand oil extraction in the North Sea, including in the first-ever field developed in Norwegian territory at Ekofisk, which was established in 1971.
Environmental organization Bellona believes that emissions could greatly increase from the fields if they are not electrified using electricity cables from the mainland. Without electrification, the installations at the field use gas turbines, increasing pollution. Oil developers have rejected using electricity from the mainland as too expensive, while a spokesperson for the Socialist Left Party, which has a number of ministers including the environment minister, told Dagsavisen that they would push for the electrification to be reconsidered.
The Norwegian government has previously set targets of cutting carbon dioxide emissions by two-thirds by 2020, and it is feared that this reduction threatened by the expansion plans.
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