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Sunday, June 16, 2024

‘War profits’ on gas fuel new debate

Norway earned record profits on gas sales last year, after the price of both gas and oil were pumped up by Russia’s war on Ukraine. Now debate is flying over whether Norway has a moral obligation to donate more of the extraordinary profits to either Ukraine, climate measures or both.

Lots of Norwegian gas flows through this processing plant at Karstø in Rogaland, on its way to Europe, PHOTO: Equinor/Ole Jørgen Bratland

The gas profits tied to the war alone have amounted to as much as NOK 334 billion (around USD 33 billion), maybe more, according to research conducted by two master’s degree candidates at the Norwegian business school NHH (Norges handelshøyskole). Eirik Hjalte and Ida Elisabeth Uberg Gaasland determined in their master’s thesis (external link) that around 27 percent of the value of Norwegian gas exports in 2022 (excluding those to the UK) is linked to the Russian invasion that sent gas prices skyrocketing.

“That’s an extremely high amount,” Greens Party leader Arild Hermstad told state broadcaster NRK. “It’s disgusting that Norway has earned so much money on others’ misfortune. Ordinary European families have paid in this money to warm up their food and their homes.”

Greens Party leader Arild Hermstad thinks Norway’s extraordinary profits on gas and oil ‘are making it embarrassing to be a Norwegian.’ PHOTO: MDG

Hermstad has thus joined others in calling Norway “a war profiteer.” His Greens Party has proposed that the money Norway generates on Russia’s war should go towards rebuilding Ukraine, and to help Europe be less reliant on Russian gas.

Norway’s Socialist Left Party (SV), the Norwegian chapter of Friends of the Earth (Naturvernforbund) and other climate organizations agree, and want to earmark at least some of the profits for other climate measures. Former British Prime Minister Gordon Brown has also proposed that wealthy oil nations like Norway should donate at least 3 percent of oil and gas profits for climate relief programs in poorer countries.

Norway’s Labour-Center government, however, has not embraced such proposals. Oil & Energy Minister Terje Aasland of the Labour Party stresses that Norway has instead simply been able to deliver badly needed gas “to a Europe in crisis,” and can’t be blamed for the high market prices for gas and oil. Aasland also claims that Norway is among countries already giving the most support to Ukraine, in the form of both humanitarian and military aid.

Oil & Energy Minister Terje Aasland stresses how Norwegian gas deliveries helped Europe get through last winter when Russian gas supplies were cut off. He also claims Norway can’t be blamed for high market prices for gas or oil.  PHOTO: Stortinget/Peter Mydske

“Without the Norwegian deliveries, energy prices would have been much much higher,” Aasland has said. “Everyone who sold energy earned money when the energy prices were so high, including the Norwegian state.” He was also quick to note, as has Prime Minister Jonas Gahr Støre, that despite large deposits into Norway’s Oil Fund (where oil and gas profits are stashed for future generations), the fund itself lost billions on stock market declines.

The two master’s degree candidates are themselves claiming neutrality in the debate, claiming that they simply wanted “to contribute our results.” Gaasland told NRK that while some will call Norway a war profiteer, “others will say that this is only about market forces, and that Norway was simply able to sell (its gas) at the market price.”

Hermstad of the Greens remains uncomfortable with the result. “The (government) is making it embarrassing to be Norwegian,” he told NRK, just as Norwegian government officials are heading to Dubai for the next UN Climate Summit that begins on Friday. Its international negotiations are also bound to put more pressure on Norway’s gas and oil industry, and on Norway’s lack of progress in cutting its own carbon emissions. Berglund



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