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Thursday, June 13, 2024

‘Norway buys itself out of climate vow’

NEWS ANALYSIS: The timing was ironic at best: Norway’s state-owned oil company Equinor announced a new oil and gas discovery in the Norwegian Sea on Monday, just as the government was vowing to cut carbon emissions by 40 percent by 2030. The government’s deal with the EU, however, will allow Norway to account for some of its promised emission cuts by financing other countries’ cuts, meaning Norway can once again buy itself out of making cuts at home.

Equinor’s latest oil and gas discovery in the same well was made by the Transocean Spitsbergen drilling rig, which earlier has been a target of Greenpeace protestors in the Barents Sea. PHOTO: Greenpeace

Climate and Environment Minister Ola Elvestuen of the Liberal Party said the same thing on national radio Monday morning that former Labour Prime Minister Jens Stoltenberg said more than eight years ago, that Norway “will make cuts at home.” That hasn’t happened, with recent figures showing that Norway’s own emissions are still rising at a time when most countries are logging declines.

It thus hasn’t mattered much whether Norway’s government is led by the Conservatives (as it is now) or by the Labour Party. Neither is willing to rein in the country’s oil industry, which generates the vast majority of Norway’s emissions both in and outside the country. The government in which Elvestuen now sits is also responsible for recently doling out a record number of new oil and gas exploration licenses, not least in sensitive Arctic areas.

Audun Lysbakken of the opposition Socialist Left party (SV) was quick to question the current government’s credibility, since it’s resorting to the same tactics that have allowed Norway’s oil industry to keep gushing. “The closer we get to 2030, the more difficult it will be to reach our climate goals,” Lysbakken said on state broadcaster NRK’s morning debate program Politisk kvarter. “It will become more tempting to buy ourselves free of them.”

Ola Elvestuen, Norway’s government minister in charge of both climate and environmental issues, claimed on Monday that the four-party conservative coalition government’s “ambition” is to make its carbon emission reduction goals at home in Norway. PHOTO: Berglund

Lysbakken, however, is a former minister in Stoltenberg’s former Labour-led coalition, and may thus be able to sympathize with the awkward position in which Elvestuen now finds himself. Elvestuen’s center-right Liberal Party has long promoted climate issues just as Lysbakken’s SV has. They often find themselves overrun, however, by the bigger parties in the conservative government coalition, and have to make concessions not least on the climate.

Now Lysbakken fears the Norwegian government will be able to simply buy its way out of its climate commitments, just as Stoltenberg’s government did when it paid other countries to make cuts and then got credit for them. Stoltenberg also started sending hundreds of millions of kroner abroad in an effort to save rain forests in Indonesia and Brazil, the success of which has become questionable. Since Stoltenberg wouldn’t cut back on oil exploration and production any more than the current government will, he tried to boost Norway’s climate image abroad by financing high-profile climate projects far from Norway’s offshore oil fields.

Norway has so far put much of the burden of its domestic climate commitment on ordinary citizens, by charging high road tolls, taxes on fuel and vehicles and imposing various other measures to curb private non-electric car use. Its carbon capture and storage efforts have so far mostly failed, not least Stoltenberg’s much-hyped “moon landing” project at the Mongstad refinery that Statoil (now Equinor) found far too expensive.

Audun Lysbakken of the opposition Socialist Left party (SV) fears the government will restort once again to financing emission cuts abroad instead of cutting Norway’s own emissions – just like the left-center government that he was once part of did when it was in power from 2005 to 2013. PHOTO: NRK screen grab

Opposition parties in Parliament, including Labour this time, were mounting a counter proposal on Monday to force Norway into vowing not to use climate quotas as a means of reaching its own emission reduction goals. It won’t win the majority government’s approval, though, with Elvestuen claiming that’s to help ensure overall emission cuts if Norway fails to reach its own goals.

“But the government ambition is that the cuts will be made at home,” Elvestuen insisted during NRK’s radio debate. That sounded eerily familiar to what his unsucessful prececessors including Stoltenberg have said over the years. Lysbakken was unimpressed, believing that the government wants to be able to simply buy climate quotas instead of making the necessary cuts at home.

Equinor strikes more oil, and gas
Equinor, meanwhile, disappointed environmentalists but cheered investors and Norway’s offshore oil service industry on Monday when it reported a new oil and gas discovery off the scenic Helgelands Coast in Northern Norway.  Most importantly, perhaps, was its assessment that the field can quickly become profitable.

The discovery was made in an exploration well in the Norwegian Sea that Equinor and its partners, Ineos E&P and Faroe Petroleum, started drilling on April 27. It’s located around 14 kilometers southwest of the Norne oil field.

Nick Ashton, senior vice president of exploration for Equinor in Norway and the UK, stated in a press release that the company was “very pleased” with the drilling results, which estimate reserves of as much as 60 million barrels of recoverable oil equivalents. He noted how the Norwegian Sea “has created considerable value and many jobs since Norne was found in 1992.” The area currently accounts for around a fifth of Norway’s daily production of oil, gas and condensate.

For more details on Equinor’s latest oil and gas discovery in the same well, click here (external link to Equinor’s press release). Berglund



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