Norway, oil and the issue of climate change
You can see why Saudi Arabia wants to keep pumping as much oil as possible. Oil exports represent 87% of the Saudi government budget and 42% of the GDP. Saudi Arabia’s population, now 35 million, is growing by two-thirds of a million a year, and the country already imports 80% of its food. They would starve in a few years if they stopped pumping.
Denmark, on the other hand, is halting exploration for new fossil fuel resources and promising to stop pumping all oil and gas by 2050. But there are only five million Danes and the fuels fossils represent only four tenths of 1% of GDP. Most Danes would hardly notice it, even if they stopped all fossil fuel production right now, so why not?
Norway, however, is in a much more interesting place. It is the world’s seventh largest exporter of oil and gas, and these exports represent 42% of the country’s gross domestic product (GDP). Per capita income is higher than in the United States, in part due to the fossil fuel industry, and income is much more evenly distributed.
So the five million Norwegians have a major stake in their fossil fuel industry. Indeed, 7% of the population actually works there. Yet Norwegian attitudes towards carbon dioxide emissions are seriously conflicting, and the question of whether the country should stop pumping has even become an issue in national politics.
The Conservative Party, which lost last month’s election after eight years in power, has never had a big problem living on the proceeds of fossil fuel exports. When asked in an election debate last week the party’s preferred date to end production, a Conservative candidate said: “About 300 years from now.” Not a lot of nuance there.
The Labor Party, which has won the most seats and is now due to form a left-wing coalition government, has also been careful not to alienate potential supporters worried about their jobs. Party leader Jonas Gahr Store has vowed not to include any party in the new coalition that demands a halt to all exploration or production, but that leaves some leeway.
The two traditional Labor coalition partners, the Socialist Left and the Center Party, are taking a firmer approach to the issue of limiting Norway’s fossil fuel exports. “Our demand is to stop looking for oil and gas and to stop issuing new permits to companies,” said Lars Haltbrekken, spokesman for the Socialist Left Party for Climate and Energy.
Labor might choose to do without the socialist left, but the small Red and Green parties (both would be needed for a majority government) are even more radical on the matter. And there is considerable public support for this more radical approach, even despite the implications for personal income in Norway.
No one wants to stop all oil and gas production now – that would be too much of a shock to the economy – but just under half of the population would be ready to stop exploration now. In the absence of new deposits, that would automatically imply that oil and gas production would drop to practically zero in 20 or 30 years.
It’s not a sight you’ll come across very often in Kuwait, Russia, or Alberta, but Norway is a very conscientious place where people are very concerned about climate change. Its grid runs almost entirely on hydroelectric power and 70% of new car purchases this year were fully electric. Indeed, nothing else will be available on the domestic market after 2025.
It also helps that Norway has a very strong safety net. It is one of the most generous welfare states in Europe, and its $ 1.4 trillion (Baht 47.3 trillion) sovereign wealth fund, saved from past oil revenues, is the largest in the world. In fact, it is so big that the whole country could be absent from work for three years while still maintaining its current standard of living.
But it’s not a crime to be cautious, and this safety net creates the possibility that Norway could be the trailblazer where other fossil fuel-producing countries eventually have to follow. The first step could even be taken in the next coalition talks.
An imaginable compromise that could bridge the gap between Labor and its potential partners was presented last week by Labor spokesperson for energy, Espen Barth Eide. Most of the country’s oil and gas still comes from old offshore fields in the North Sea, he pointed out, but most of the untapped and unexplored reserves lie in the Barents Sea, above the North Sea. Arctic Circle.
Drilling there is a red line for environmentalists, but the outgoing Conservative government has refused to stop licensing it. Labor has made no such commitment, and denying these licenses would be a small but significant step in the right direction: no dramatic costs yet, but an implicit commitment to further decline. long term of production.
Gwynne Dyer is a freelance journalist whose articles are published in 45 countries. His new book is “Growing Pains: The Future of Democracy (and Work)”.