Is Norway really green?

March 18, 2021
The oil and gas lobby in Norway is still very powerful.

The streets of Norway’s capital, Oslo, are full of bikes and (increasingly) electric cars.

More than 60% of all cars sold in Norway in September last year were electric; the figure nears 90% including hybrid vehicles. Last year, plug-in electric vehicles made up more than 17% of all cars on the road: no country, proportionally, has as many electric cars in use.

Norway ranked ninth in the Environmental Performance Index (EPI) last year: below its Nordic neighbours Denmark (which came first), Finland (7th) and Sweden (8th); but ahead of Australia (13th) and the United States (24th).

Norway, which boasts a higher GDP per capita than the United States and Australia, is also a global leader in hydroelectricity, green technology and the fight against deforestation.

But, despite its clean, green image, Norway has been called out as a “climate hypocrite”, due to its reliance on extractive industries.

Climate crisis

A few weeks ago, London-based CNN International news producer Ivana Kottasová accused Norway (along with Canada and Britain) of “preaching sustainability while simultaneously cashing in on the very thing that is causing climate change” — fossil fuels.

The article caused much discussion, and was re-tweeted by Swedish environmental activist Greta Thunberg.

Karin, a project manager from Oslo, agrees. “I think we are climate hypocrites. I do understand that it is complicated and that we cannot just switch off the oil tap from one day to another.

“But since Norway is in the forefront of driving the transformation towards a more sustainable society, I think Norway also should be in the forefront of having a plan for phasing out the fossil fuels production and export, with a tight deadline.

“Someone needs to take the lead!”

Young Norwegians are genuinely concerned about climate change: more than 30,000 of them (in a population of 5 million) took to the streets during the 2019 climate strike.

They are the force that could change the policy of a country that, according to Norwegian national broadcaster NRK, spends almost AU$0.6 billion on green conversion, but more than $13 billion on the oil and gas sector.

Norway owes much of its prosperity to oil and gas exports, worth more than $60 billion in 2019. More than 225,000 people work in the sector and its related industries.

The Statens Pensjonsfond Utland (Government Pension Fund Global), a $1.5 trillion sovereign wealth fund, commonly referred to as Norway’s “oil fund”, is fuelled by assets derived from oil and gas extraction. The fund is designed to protect future generations when “the oil runs out” or there is a shift to other energy sources.

Norway’s oil reserves are small, compared with those of Kuwait, Libya, or even Ecuador.

“That’s why the Norwegians have become very good at squeezing every drop of oil from their fields over the years, focusing a lot on innovation,” we were told by an Italian engineer working for an energy company in Norway, who wished to remain anonymous.

“They know the party won’t last long.”

The data backs up the engineer’s comments: Norway was the world’s third-largest oil exporter in 2006, behind Saudi Arabia and Russia; in 2018, it ranked 14th.

Green turn?

According to a recent survey by the Norwegian Confederation of Industry, 74% of managers with more than 100 employees are convinced that a “green turn” will offer opportunities for their companies.

Yet, the country’s growing focus on renewable energy goes hand in hand with renewed activism in oil exploration, particularly in the Barents Sea to the northeast.

A royal decree opened Norway’s continental shelf in the southern and southeastern sections of the Arctic Ocean to new drilling in 2016. This followed similar decisions by its parliament in 1989 and 2013.

Four environmental organisations, starting with Greenpeace, challenged the decree. They argued it violated Article 112 of the Norwegian constitution, which guarantees every citizen the right to a healthy environment.

Last December, the Norges Høyesterett, the country’s highest court, ruled in favour of the state.

Norway’s generous welfare state has been built on the back of oil and gas windfalls. The economic importance of the hydrocarbon industry is reflected in its influence.

Powerful lobby

“The most powerful lobby we have in Norway is the oil and gas lobby,” said Ask Ibsen Lindal, energy policy spokesperson for Miljøpartiet De Grønne (Green Party). “Without a doubt.”

Lindal said the drop in the oil price due to the price war between Russia and Saudi Arabia last year put a freeze on many new oil-related projects in Norway. This prompted parliament to adopt an extremely favourable tax package for the sector.

“No one has as favourable rules as this industry,” he said.

Torfinn Harding, an economist at the University of Stavanger, said: “We could discuss this package deal, it’s not perfect and perhaps it’s too generous, but you could also say that they have provided short-term liquidity with the potential to help keep the sector from declining more than it needs to.”

Harding said the fact that almost all parties in parliament voted in favour of the package was a sign that when the going gets tough, “the oil sector is too valuable to discontinue”.

Norway’s dilemma lies here. It is one of the most democratic advanced capitalist countries in the world; it seeks to be a humanitarian power, provides aid to nations such as Somalia and promotes coordinated global action against COVID-19; it has ratified the Paris Agreement and has committed to reducing its carbon dioxide emissions by 40% below 1990 levels by 2030, and 80–95% by 2050; and it is the home of European ecological pioneers such as Arne Næss and Peter Wessel Zapffe.

At the same time, Norway is the world’s third-largest gas exporter, drawing more than 15% of its GDP from the hydrocarbon industry.

Gas production has been growing for three decades, and the trend will continue for the next few years. Oil output has declined since 2001, when it peaked, but is expected to continue rising until 2023.

Unlike Denmark, where the two green parties have four seats in parliament, and Sweden, where the Green Party has 16 seats, Norway’s Green Party has only one seat.

Something is changing, however. Once, oil workers were seen as heroes. Oil was considered a force for progress and wealth for a small nation that achieved independence from Sweden in 1905, and suffered under German occupation from 1940–45.

Today, on billboards rhetorically asking “Why do we keep looking for oil?” you can find hand-written answers such as: “I don’t know because it’s stupid.”

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