Calls rise for less oil sector activity
July 11, 2012
Unhappy oil rig workers aren’t the only ones calling for a reduction in the tempo of oil exploration and production on Norway’s continental shelf. They have the full support of not only environmentalists but also an acclaimed researcher at state statistics bureau SSB, who fears the boom in the oil sector is putting too much pressure on other areas of Norway’s economy.
The oil rig workers were heading back to work this week after their strike over the loss of early retirement benefits was effectively halted by Norway’s left-center government. The government, faced with a threatened oil industry lock-out that would have shut down all Norwegian oil and gas production, feared the economic consequences would be too great and that Norway’s reputation as a stable supplier would be damaged.
Others believe the government acted too soon and that there was no reason to prevent the lock-out. Some, like oil workers’ leader Leif Sande of the labour organization Industri Energi, thought a pause in production could even be healthy in an industry that’s been booming for years. A recent survey indicates that a majority of Norwegians agree.
SSB researcher Ådne Cappelen has since told newspaper Dagens Næringsliv (DN) that he also thinks a lower level of investment in Norway’s offshore sector would be good for the Norwegian economy, even though oil and gas have fueled its strength in recent years.
“The level of activity in the sector is now so high, and it’s putting so much pressure on other parts of the economy, that it could be an advantage to avoid letting it grow even more,” Cappelen told DN. He supported Sande’s call last week, in a letter to the government ministers in charge of environmental, oil and energy, and labour issues, for the government to lower the level of activity.
Sande has been concerned mostly about the health and security of his members, as brisk activity demands lots of overtime and staffing shortages. “When you increase the level of investment to the degree we’re seeing, and there aren’t enough folks to do the work, it goes out over someone,” Sande told DN. He claims the activity is putting undue pressure on workers, even though it results in lucrative overtime pay. “Lots of overtime boosts income, but that’s not the way I want to see income rise,” Sande said.
Petroleum investments in Norway rose by 13 percent last year and SSB predicts they’ll rise by another 13 percent this year. The need for workers has led to high pay being offered in the oil sector, which also puts pressure on pay levels in other sectors. Cappelen worries that will ultimately raise incomes and costs throughout the Norwegian economy, and further hurt the ability for Norwegian firms to compete against lower-cost foreign rivals.
Norway’s already-high costs ‘will only increase’
“Pay levels in the oil sector are very good and they’re bidding up pay for qualified personnel,” he told DN. “We already have a high cost level in Norway that will only increase.” He worries that an overheated oil sector will also boost costs for the investment needed in infrastructure improvements.
Snorre Valen, a Member of Parliament for the government party SV (Sosialistisk Venstrepartiet, the Socialist Left), wants his party colleague and minister for the environment Bård Vegar Solhjell to invite Sande of Industri Energi to a meeting to discuss the impact of activity in the oil sector.
“I’m encouraging Solhjell, (Labour Minister) Hanne Bjurstrøm and (Oil Minister) Ola Borten Moe to delve into this issue,” Valen told DN. “The government should take this very seriously when Industri Energi is so clear with its concerns.”
Valen is among those wanting to slow down the pace of Norwegian offshore oil and gas activity. “I want more long-term management of the Norwegian continental shelf out of concern for the climate,” Valen told DN. “But I also think we need a change in the tempo independent of the climate issues.”
Views and News from Norway/Nina Berglund
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