Earlier this month, the Norwegian energy ministry said the country would be stepping up oil and gas exploration in the Norwegian continental shelf to improve its energy security and the energy security of its friends and neighbors in Europe.
Traditionally one of Europe’s biggest natural gas suppliers, Norway last year became the biggest single one as flows of Russian gas all but stopped. And it seems this is a place Norway would like to remain.
“The petroleum adventure in the north has only just started,” Petroleum and Energy Minister Terje Aasland said in early May, calling on Norway’s oil and gas companies to fulfill their “social responsibility” to ensure the energy security of the country and “leave no stone unturned” to boost gas production. To say that climate activists did not take this well is to say nothing.
Norway is notorious for its clean grid – thanks to its abundant hydropower resources that climate campaigners don’t like to talk about very much – and its per-capita EV ownership, which is the highest in the world: a feat made possible by the combination of a small population and a high standard of living, not least thanks to oil profits.
Speaking of oil profits, Norway’s sovereign wealth fund, which is the largest in the world, last year set itself a target to make its portfolio net-zero by 2050. The fund is already divesting from some fossil fuel holdings to much media coverage and activist cheers.
Now, suddenly, it is socially responsible for Norway’s energy industry to boost the production of those same fuels that the sovereign wealth fund has been divesting from, albeit sparingly. Activists have every right to be outraged, and this is exactly what they are.
“Oil drilling in the Arctic is like pouring gasoline on a fire,” the head of Greenpeace Norway told CNBC.
“Both Norway and the oil corporations need to stop cynically exploiting Russia’s war in Ukraine,” Frode Pleym also said. “The aggressive and greedy oil policy of Norway do not only consolidate Oslo’s position as a top energy supplier to Europe, it locks a whole continent into future dependency on fossil fuels. The alternative to oil and gas is not more oil and gas, it is more energy efficiency and renewable energy.”
These comments chime in with a line of criticism from the climate activist lobby against European policies for dealing with last year’s energy crunch that have effectively stimulated more oil and gas use, including through direct subsidies at the pump.
It is a line of criticism that is difficult to dismiss: by shouldering part of the increased cost of fuels, European governments indeed stimulated more oil use than would have otherwise been affordable for most. Of course, discouraging oil use by refusing to cover the increased costs would have fuelled a much higher inflation rate, too, but this is not on top of the climate change agenda.
Activists are understandably angry with the Norwegian government, but the government’s focus on energy security is equally understandable. The whole world saw what happens when energy security is compromised. No one would like to see a repeat of that. And Norway has the resources and expertise to bring them to market.
This is “a middle finger to the Paris Agreement,” according to climate activists cited by CNBC. Perhaps it is, but if Europe’s year of crisis showed us one thing, it is that when energy security is involved, the Paris Agreement takes a back seat. The latest proof of this was this weekend’s G7 meeting, where leaders agreed on continued gas investments despite the Paris Agreement. Energy security trumps the transition every time.
By Irina Slav for Oilprice.com
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