Drilling off Lofoten can reap billions

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UPDATED: Norway’s oil and energy minister, bullish on the prospects for the country’s oil industry, was smiling  after a new report claimed that drilling off Lofoten could create as many as 37,000 new jobs. Environmental activists weren’t smiling at all.

The waters off Lofoten are a haven for fish and tourists, and many don’t think they’ll mix well with oil. Here, a coastal vessel in the Hurtigruten fleet sails through Raftsundet. PHOTO: Hurtigruten ASA

Ola Borten Moe was in the scenic area off Norway’s northern coast on Friday to unveil several reports on the prospects for and consequences of oil exploration in the northeastern Norwegian Sea. He’d already been told that billions will flow into the local economy if he and the government open up the waters west of Lofoten and Vesterålen to oil and gas exploration.

Moe ended up saying he’d recommend refraining from allowing drilling through the next parliamentary period (until 2017) but opponents of drilling remained skeptical. They still fear Moe can change his mind, or that a change of government next year would usher in exploration after all.

The report about the jobs exploration could bring, produced by Menon Business Economics for the state oil ministry, put job creation at somewhere between 13,000 and 37,000, and value creation at between NOK 26 billion and NOK 55 billion (as much as USD 9 billion).

Menon estimates that between 400 and 1,100 new jobs would be created every year, with the biggest wave coming when operations might start around 2025.

The prospect of oil exploration and production around the Lofoten peninsula, however, is highly controversial. It’s one of the richest fishing grounds in the world, and the seafood industry already has complained that sonar testing used in exploration scares away fish. Lofoten is also a tourist magnet, known for its stunning scenery. Fears of a major oil spill in often stormy seas run high.

Pressure for more economic development in the far northern counties is also high, with trade union federations pushing hard for the job creation that oil and gas could bring. Menon’s report will likely fuel their expectations, and be used as another argument to allow offshore drilling, which the oil and gas lobby is strongly promoting.

Moe’s own party, the small, rural oriented Center Party, has so far resisted oil exploration off Lofoten as has its government partner the Socialist Left party (SV), which is firmly opposed. Moe, however, has seemed far more positive towards allowing drilling as does the dominant Labour Party, which leads the government coalition and counts the unions among its most important constituency.

Moe did stress on Norwegian Broadcasting (NRK)’s nightly news program Dagsrevyen, however, that the job creation figures were merely an estimate. “But we know from everywhere else in Norway that offshore activity has huge ripple effects on land,” Moe told NRK on Thursday. On Friday he said he’d nonetheless hold off on opening up the area for drilling for at least another four years.

Environmental effects are what worry activists like Lars Haltbrekken, leader of the Friends of the Earth chapter (Naturvernforbundet) in Norway. He and other environmental organizations are fighting the sheer prospect of oil drilling off Lofoten, both to protect the natural beauty of the area but also its fishing industry. He claimed it would be short-sighted to “sacrifice eternal jobs” in the fishing industry for shorter-term jobs in the oil industry.

Moe cautioned that the new report was merely part of the “information gathering” efforts he’ll use to evaluate the area for drilling. He would be addressing more environmental concerns after various reports were formally released.

Views and News from Norway/Nina Berglund

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