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Friday, May 24, 2024

Norway hands out more oil licenses

While his colleagues in Parliament were reeling over a report on poor regulation of Norway’s offshore installations, and another shows that most young Norwegians oppose more oil exploration, Norwegian Oil Minister Kjell-Børge Freiberg was busy and visibly proud to be handing out a record number of new offshore oil and gas exploration licenses in Norwegian waters. “It’s a good day for the country, a good day for the future,” Freiberg claimed, much to the disgust of climate and environmental activists.

Oil Minister Kjell-Børge Freiberg sung the praises of Norway’s oil industry at the annual seminar of the Norwegian Petroleum Society in Sandefjord this week – and received the plan for further develpment of the Gullfaks field from Equinor’s Arne Sigve Nylund. PHOTO: OED

Even the most hard-core among them, along with several Members of Parliament, were aghast over a highly critical report on offshore safety regulation issued by Norway’s state auditor general’s office just as Freiberg was meeting oil industry officials in Sandefjord for an annual seminar. The report shows how Norway’s Petroleum Safety Authority (Petroleumstilsynet, PTIL) has failed to uncover serious safety challenges on Norwegian oil installations, failed to react strongly enough, failed to follow up on demands for improvements and allowed the long-troubled Goliat platform to operate before it was cleared as being safe.

That all came just as Freiberg’s prepared speech text had him telling the Norwegian Petroleum Society that Norway was “a world leader” in health, working conditions and safety on oil field installations. His text also described the system, in which oil companies are responsible for health, maintenance and safety (HMS) while the authorities follow up, as “a wise division of labour” and “the gold standard” internationally.

Not so, according to the new report from Norway’s own auditor general. “This is one of the most dramatic reports we’ve ever had on Norwegian oil operations,” claimed Federic Hauge, leader of the environmental organization Bellona. Lars Haltbrekken, former head of Norway’s chapter of Friends of the Earth (Naturvernforbund), who’s now a Member of Parliament, questioned whether oil companies should be allowed to continue to operate on the Norwegian Continental Shelf “when they repeatedly are guilty of safety violations.”

‘Shocked’ by the deficiencies
Other top politicians including the energy policy spokesman from Oil Minister Freiberg’s own Progress Party, Terje Halleland, told newspaper Dagens Næringsliv (DN) that he was “shocked” by the report from the state auditor general: “If there’s one thing I thought we were good at, it’s health, maintenance and safety on Norwegian oil fields. This (the auditor’s report) is very disappointing. HMS is something we can’t play around with.”

Espen Barth Eide, a former defense minister and foreign minister who’s now a Member of Parliament and energy spokesman for the traditionally pro-oil industry Labour Party, was also stunned by the criticism hurled at those supposed to control petroleum safety. “It seems like the Petroleum Safety Authority has let itself be blinded by the size of big oil companies,” Eide told DN. That includes Norway’s own Equinor (formerly Statoil), he said, noting that it had been “allowed to address problems itself. But it’s important that Norway biggest player on the Norwegian Continental Shelf has an opponent that’s keeping an eye on it.”

Kjell Kjenseth of the Oil Minister Freiberg’s government partner, the Liberal Party, leads the Parliament’s energy and environment committee. He called the report “sombre reading” and said he was “surprised that we have a regulator that doesn’t seem to be vigorous, when this is something we spend a lot of resources on. As a representative of the people, I feel I have less control over an enormously large sector that contains a lot of risk.”

Norway’s Oil Minister Kjell-Børge Freiberg, who’s as bullish on the oil industry as all his predecessors. PHOTO: OED/Scanpix

Freiberg, meanwhile, seemed to downplay the report, preferring to boast about the 83 exploration licenses he was handing out this week to 33 oil companies keen on searching for more oil and gas fields to develop. “It’s always nice to come to Sandefjord, and extra nice to come with 83 exploration licenses,” Freiberg told DN as he got out of his government car in a snowstorm. “It’s also extra nice that this round (of licensing) shows that the Norwegian Continental Shelf is attractive to a wide range of companies.”

In claiming that it was “a good day” for the country and the future, Freiberg also believes exploration activity, which can lead to production activity, will continue to generate revenues for the state treasury for years to come. This year, he told his audience in Sandefjord, the state’s net income from petroleum operations alone will amount to NOK 289 billion (USD 34 billion).

Last year the oil ministry granted 75 such licenses to 34 companies, a record amount until this week. Companies from Norway’s own Equinor to Germany’s Wintershall secured licenses, with Equinor typically emerging as the big winner with 29 licenses followed by Aker BP with 21. Vår Energi, operator of the long-troubled Goliat platform that features heavily in the state auditor’s critical report, wasn’t punished and instead was granted 13 new licenses, and operating control of four of them, exactly what Haltbrekken doesn’t think should happen.

Confronted by critics
Freiberg faced tough criticism from opposition politicians and environmental organizations. “The last thing the climate needs is that the oil industry gets 83 new licenses to search for more oil,” claimed Lars Haltbrekken of the Socialist Left party (SV). “We need climate policies that cut emissions, instead of steadily looking for more oil that creates climate change.”

Freiberg brushed it off, refusing to accept the premise that Norwegian oil policy runs counter to climate goals. “Norwegian petroleum activity is important for the financing of our common future, and Norwegian gas plays an important role (as an alternative to coal when exported to Europe),” he told DN.  Norway’s oil minister further stressed that his ministry wasn’t opening up new areas in this round of licensing, but rather granting licenses in areas that had been turned back to the government.

Youthful resistance
Freiberg remains faced with a new generation of young Norwegians who are more concerned about climate change than the future of Norway’s oil industry. The youth organizations of the Labour Party, the Christian Democrats and the Liberals all want to halt all further oil and gas exploration and the granting of any more license for such. The Socialist Left’s, Reds’ and Greens’ youth organizations also call for the same, along with a gradual phase-out of the oil business. Labour’s youth group, AUF, called for a managed shut-down of the oil industry by 2035 at its last national gathering in October.

“We are not naive,” AUF’s new leader Ina Rangønes Libak told DN, responding to accusations from some politicians and industry leaders that they are just that. “Instead it’s naive to close your eyes (to how Norway needs to cut emissions while nurturing its oil industry) and not prepare a clear plan for restructuing of oil and gas.” She believes demand for oil will fall in the future, and that oil prices will fall as well. “We have to make that so-called ‘green shift,” in order to avoid high unemployment rates in 10 or 20 years.”

A recent survey conducted by the environmental organization Fremtiden i våre hender (The future in our hands) also shows that a majority of Norwegians under the age of 24 oppose exploration. The survey conducted last summer showed 53 percent of those aged 18 to 24 want Norway to stop all further oil and gas exploration, as did 41 percent of those under age 34.

Generation gap
“We’re seeing a clear generation gap, perhaps because the climate crisis will affect the young more, and we should listen to them,” the leader of the organization, Anja Bakken Riise, told newspaper Dagsavisen. Another recent survey showed that 37 percent of all Norwegians think oil exploration should cease, while more young Norwegians have appeared more reluctant to work in the oil industry. DN has also reported that the numbers of young Norwegians applying to study for a career in the oil industry have sharply fallen in recent years.

Even the outgoing mayor of Stavanger, Norway’s oil capital, has been championing climate issues despite opposition from local businesses and her own Conservative Party that currently controls the government in which Freiberg serves. Christine Sagen Helgø joined the opposition Labour Party and the Liberals in pushing for tough carbon emission cuts in the Stavanger region.

Norway’s oil industry, meanwhile, is still predicting more record production years ahead, with an upsurge starting in 2020 and breaking more production records in 2023. “We’ll have many big fields coming into production during the next two the three years,” the head of Norway’s oil directorate, Bente Nyland, to newspaper Rogalands Avis. “We’re managing to keep up high production because we have worked hard to find new oil and gas resources in the North Sea and the Norwegian Sea.”

Nyland doesn’t think Norway is nearing any overall decline in oil production. “I can’t stress it enough, activity is high,” Nyland said. “It’s easy to forget how many fields we actually have in production. At New Year, it was 83, nearly a record.” She thinks Norway is barely half-way through what she considers to be its “oil fairy tale.” Berglund



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