Thea Lyngseth – The Smoke and Mirrors of Norway’s Climate Action

“Norway must do more,” Norwegian Prime Minister Jonas Gahr Støre told the press a few days before he flew to Egypt to attend COP27 in November 2022. To underline this point, he announced that Norway will aim to cut emissions by 55 per cent by 2030, raising the country’s target by 5 per cent.

On the international stage, Norway has successfully fashioned itself a front runner in climate change mitigation, often holding up the large, dedicated funding for rainforest protection, a world-renowned electric vehicles sector, investments in renewable energy and its hydroelectricity grid as shining examples of its success.

This leadership role began in 1987 with then-Prime Minister Gro Brundtland’s “Our Common Future” report, better known as the Brundtland Report, which introduced the idea of sustainable development to Norway and to international politics. But the reality of Norway’s expanding fossil fuel industry today contradicts this vision of sustainability and the country’s own climate action pledges.

Even as the pressure to phase out fossil fuels grows, the government continues to issue licences for oil and gas projects in the Arctic circle. Globally, Norway is number five for the volume of approved and expected oil and gas projects in 2022 to 2023. The government has stated that it would “not dismantle but develop” the fossil fuel industry.

Through different narratives, the Norwegian government portrays its support and engagement of the fossil fuel industry as not only coherent with its climate goals but also necessary. Government officials and the state-owned company Equinor often cite sustainability, duty, and preservation of the welfare state as justification for keeping fossil fuels around. The Labour-Centre government particularly views the fossil industry as a partner in the energy transition and reaching climate goals.

Norway’s fossil fuel legacy

For the past two centuries, the world economy has relied on the consumption of fossil fuels, mainly oil, coal and gas. They currently provide 80 per cent of the global energy consumption. This heavy reliance on fossil fuels was laid bare when Russia closed its taps and triggered an energy crisis in Europe.

Our dependence on fossil fuels is weaved into our everyday lives through work, agriculture, consumption of other goods, trade and urbanisation. The fossil industry is also deeply connected to the financial system, with pension funds, insurance companies and banks investing millions into their operations. These factors combined have made the fossil fuel industry powerful around the world.

In Norway, this power lies in the oil and gas industry and it has expanded through favourable government policies. In the decade after oil discovery in the Norwegian Continental Shelf in 1969, the government embarked on nationalising the industry. In 1972, it founded the oil company Statoil, now Equinor. Currently, the Norwegian government is the largest shareholder with 67 per cent of the company.

In 1990, the government created a sovereign wealth fund popularly known as oljefondet (oil fund) to invest the industry’s profit into the economy. Thirty years on, the fund is a dinosaur in size. It funds 9228 companies globally and is the backbone of the Norwegian welfare system.

Globally, a green transition premised on reducing environmental harm while growing the economy has been underway since the 2008 financial crisis. With this shift, private companies, non-profits, and banks have been encouraged to do their share to address climate change and reform the economy. In Norway, the Labour-Centre government has used the sovereign wealth fund to incentivise responsible management of climate and nature risks by the more than 9000 companies it finances.

The government considers itself a responsible actor because it requires strong health, environment and security safeguards by companies to grant licenses for projects in the Arctic. Labour party Foreign Minister Anniken Huitfeldts asserted that Norway has “shown the world that [it] can conduct safe and responsible petroleum production also in the North.”

With these strict policies in place, the government argues that it generates economic growth while taking the environment, climate, and sustainability into account.

Softening Norway’s climate paradox

In 2022, Norway’s third largest oil field Johan Sverdrup broke ground in the Barents Sea, continuing a 40-year-long trend of expanding oil and gas projects in the region. Such projects have generated widespread and well-founded criticism.

This “Arctic energy boom” not only speeds up climate change by increasing emissions, but it also threatens marine ecosystems. Moreover, it is incompatible with Norway’s commitment to the Paris Agreement and the 2022 Kunming-Montreal Global Biodiversity Framework.

Despite these concerns, the Labour party’s Oil and Energy Minister Terje Aasland sees no contradiction between the oil and gas expansion in the Barents Sea and Norway’s climate goals. Besides, he believes emissions from oil and gas production in the region are decreasing on average, compared to other oil-producing countries.

On its webpage, Equinor states that renewable energies won’t meet the energy demands of a growing population and economy. Making this projection on fossil energy demand, the industry and the government argue that Norway can provide the best and cleanest option for oil and gas. The energy minister has also asserted that Norwegian oil is more desirable than dirty coal.

What these narratives deliberately ignore is the fact that fossil fuels are finite, non-renewable sources that drive climate change and environmental destruction when burnt for energy. In labelling Norwegian oil as more sustainable compared to coal and to other countries’ oil production processes, the energy minister masks the detrimental effects of using fossil fuels and stretches the meaning of sustainability to accommodate Norway’s ever-expanding production.

Norway’s fossil-soaked ambitions

In its 2021 to 2025 agenda, the Labour-Centre government outlines its ambition for cutting emissions and turning Norway into a climate action leader. However, a closer look reveals this as a strategy for securing the future of the oil and gas industry.

Experimental technologies are presented by the government as innovative, sustainable and necessary for emissions reduction as well as establishing Norway as a leader. Last year, Prime Minister Støre stated in his speech at the Equinor conference that Norway is a global leader and its main CCS project “is a crucial tool for the industry”. The government and Equinor have therefore invested heavily in technologies such as green hydrogen, electrification of oil fields, and Carbon Capture and Storage which failed to be implemented in the European Union over a decade ago. In reality, these technologies allow the government to hold on to fossil fuels while pursuing a net zero emissions programme.

Experimental technologies are also a means for the government to paint oil companies green and give them a new lease. Speaking with Reuters in 2021, Deputy Oil and Energy Minister Tony C. Tiller said “power from shore is the only technology that can deliver cost-efficient cuts that can get the industry close to the [50 per cent emissions reduction set by the government]”. Equinor plans to turn the Johan Castberg field, a project approved in 2018, into a frontier for technological development. On its website, Equinor describes the Johan Sverdrup project as a step towards a greener industry through technology.

The pursuit of technological fixes to growing emissions allows the government to enlist the fossil fuel industry as a partner, which it believes has the infrastructure and the finance. What it ignores are the unfolding negative consequences of oil and gas extraction and the fundamental problem of relying on unsustainable energy sources.

Amid the war in Ukraine, the government has found a new angle to defend its commitment to fossil fuels. With Russia cutting energy exports to Norway’s biggest buyers, the European Union and the United Kingdom, Norway has tried to show up as a democratic ally with the capacity to close the gaps left by Russia. Not only has Norway ramped up its oil and gas production and exports, overtaking Russia as Europe’s main supplier, but its leaders also say they are committed to helping Europe achieve energy security.

A social license for the fossil fuel industry

A long-standing argument from the Norwegian government against fossil fuel phase out is its historic contribution to Norwegian society. The oil and gas webpage of the Norwegian government states that the petroleum industry is Norway’s most important resource.

Equinor and the government often point to the oil and gas revenue that fund the Norwegian welfare system to defend their policies. In the current government’s agenda says the industry “contributes significant revenues, value creation and jobs to Norway”. During the creation of Johan Sverdrup in 2015, the previous Conservative Party’s petroleum policy spokeswoman said the project “will help secure the future of Norway’s welfare”. Equinor says the oil extracted from the Johan Sverdrup field benefits every single Norwegian through tax revenue to the state.

A social media post by the oil and gas association of Norway in 2017 is accompanied by a picture with the words velferdsmakinene (the welfare machines) and “allowed to be proud”. Such narratives make oil and gas synonymous with welfare and a key part of Norwegian cultural identity, giving the industry a social and economic license to continue to operate.

A commitment to not keep it in the ground

Norway continues the paradox of claiming climate leadership while simultaneously expanding oil and gas production – the very source of the climate crisis. It tries to soften this paradox by redefining and reshaping sustainability far from what the Brundtland Report or international climate agreements had envisioned. This reframing makes fossil fuel production on the Norwegian Shelf unlikely to end in the near future.

The triad comprising the Norwegian government, the sovereign wealth fund, and Equinor is not just an advocate of the green economy, but also holds the power to set its direction. At every turn, this powerful triad’s narratives have legitimised the fossil industry’s role in the green transition and given it a social license to continue operations. They have also set the tone for more than 9000 companies on what to prioritise in climate mitigation, namely experimental technology developed and deployed by the industry as opposed to breaking dependence on fossil fuels and protecting the environment.

Thanks to many generous donors BRAVE NEW EUROPE  will be able to continue its work for the rest of 2023 in a reduced form. What we need is a long term solution. So please consider making a monthly recurring donation. It need not be a vast amount as it accumulates in the course of the year. To donate please go HERE.