Center Party hushed up call for oil law changes

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Norway’s oil and energy ministry, long run by politicians from the small, rural-oriented and anti-EU Center Party (Senterpartiet, Sp), hushed up a two-year conflict with European free trade authorities in Brussels over whether the state could require oil companies to set up operations in outlying areas. The ministry apparently lost and is proposing changes in Norway’s oil law, but it has still tried to downplay the effects of the changes, according to a front-page exposé of the issue in newspaper Aftenposten.

The Center Party reportedly tried to keep parliament in the dark about ESA challenges to Norway's oil law. Norway wants oil investment on-shore as well as offshore, like here on the Heidrun platform. PHOTO: Harald Pettersen/Statoil

The Aftenposten report, quickly picked up by national broadcaster NRK and other media on Tuesday, puts the Center Party and the left-center government of which it is a member in an awkward position. Opposition politicians in Parliament, kept in the dark about the long-simmering conflict with the authorities in Brussels, were immediately calling for more information and an open hearing on the proposed law changes.

At issue is whether state authorities in Norway can require oil companies to run all or at least part of their offshore oil and gas activities from locally based operations on the Norwegian mainland. The Center Party, and other parties, have long demanded through Norway’s Petroleumsloven (oil law) that oil companies invest in local operations to create jobs and boost economic development in outlying areas. They want to be sure that small communities in Vesterålen and northern Norway, for example, benefit from the offshore oil and gas operations.

Ola Borten Moe from the Center Party took over as Norway's new oil and energy minister last winter, and continued his predecessor's efforts to hinder debate on the European challenges to Norwegian district politics. PHOTO: Statsministerenskontor

In Brussels, however, officials at the European Free Trade Association (EFTA)’s Surveillance Authority (ESA) are charged with making sure Norway follows the rules and meets obligations connected to its economic cooperation with EU member countries. The ESA officials did not agree that Norway can force oil companies to set up local operations. They sent a letter two years ago to the government demanding that Norway’s requirements, as spelled out in the oil law, be changed.

Aftenposten reported how the letter was withheld from public review and that the oil ministry consciously sought to hush up the ESA demands for a change in the law, because it would lead to a “politically difficult” and “sensitive” debate. The law as it now reads allows the government to carry on the so-called “district politics” that are aimed at nurturing outlying areas at the expense of the cities. The Center Party, with political control over the oil ministry, wanted to keep it that way and hinder media coverage of ESA’s demands as well.

The ministry, under both Center Party ministers Terje Riis-Johansen and his successor Ola Borten Moe, battled the ESA demands in secret, trying to get ESA to relent and let Norway demand oil company investment in outlying districts. ESA held firm and the Norwegian government reportedly decided to give in, agreeing to change the wording in the law to comply with the ESA/EU demands instead of taking the matter to the EFTA court.

Moe's predecessor, former Oil Minister Terje Riis-Johansen, had also kept quiet about the oil law challenge from Brussels. PHOTO: Regjeringen.no

But even then, Moe and his staff, and the government itself, claimed the changes would have “no meaningful consequences” and opted against putting them out to a standard hearing. Instead, a lawyer known for monitoring European free trade issues, Jon Øyvind Eide Midthjell, sought access to the ESA letter and thus effectively blew the whistle on the Center Party’s efforts to keep the issue under wraps. A civil ombudsman asked the ministry to reconsider, and ESA’s letter was due to be released.

“The government did not want a public debate on how much Norway’s economic cooperation with the EU can hinder the state from demanding oil companies from establishing large operating organizations in Northern Norway,” Midthjell told Aftenposten. “The hard reality is that the companies can decide to run most everything from Oslo, Stavanger or an EU country if they want, without the government being able to step in.”

Midtjhell also raises questions over whether the parliament “has received all relevant information.” He said the proposed law changes are purported to be mostly “cosmetic.” Given “the enormous investments” at stake, he noted, “there should be no lack of clarity” over what kind of power the state really will have if changes to the law go through.

The parliamentary committee handling energy and environmental issues was poised to consider the proposed changes on Tuesday. Attempts to obtain comment from Oil Minister Moe were unsuccessful, while opposition politicians looked likely to demand debate after all. Officials in northern Norway and the group opposed to the EU (Nei til EU) told NRK that the proposed law change would weaken district politics and they were calling for an open hearing as well.

Views and News from Norway/Nina Berglund
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