Norway to study shift from oil due to climate risks

Norway, Western Europe’s biggest oil and gas producer, is set to reduce dependency on oil and gas exports due to loss of value of oil and gas amid climate change mitigation efforts and increased value of clean energy technologies.

As reported by the Reuters, Environmental Minister Vidal Helgersen said that a governmental commission of experts is to be appointed in the coming days to examine where Norway stands in terms of green economy competitiveness and how to make the country’s economy climate resilient.

He said: “Given the energy and transport revolutions, fossil energy resources will be of less value over time”.

“The energy transition to renewables is going faster than anyone thought. And almost any scenario is being out-competed by reality”.

He also said that despite Oslo having made big contributions in battery technologies for shipping including coastal ferries, it needs to look for business opportunities in emerging technologies.

Helgesen noted the importance of the $1 trillion sovereign wealth fund built on revenues from oil and gas as a pivotal tool to handle the transition and to cope with the associate economic risks.

The initiative forms part of a green competitiveness strategy to be presented on 12 October.

In a phone interview with Bloomberg he said: “We’re seeing both accelerating climate change that can lead to large costs as a consequence of infrastructure destruction, and accelerating technology changes, especially in energy and transportation”.

“That’s coming very fast, and that has an impact on the value of fossil resources over time.”

He also underlined that the commission will adopt a very inclusive approach, meaning that it will take into consideration every single risk factor - hinting that it will evaluate even sensitive issues like the petroleum-tax system.

During the recent election campaign, there was an intense debate on the oil future of Norway, especially in the wake of the ongoing oil crisis which has cost the country approximately 50,000 jobs.

Reportedly, Norway still has an estimated 47 billion barrels in discovered and undiscovered oil and gas resources.

Under the Paris Agreement, Norway has pledged to cut its greenhouse gas emissions by 40 percent by 2030, with the baseline being 1990. 

Minister Helgesen will be speaking at the 8th Sustainable Innovation Forum, organised in partnership with the UN Environment, 13 & 14 November in Bonn, during the COP23. Joining the panel discussion on Accelerating the Energy Transition will be, among others, Nicola Sturgeon, First Minister of Scotland and Pekka Lundmark, President and CEO of Fortum Corporation. To find out more about the Forum and to register, please click here.