Pol­lu­tion fears dim Nor­way’s oil hopes

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - MIKAEL HOLTER

OSLO — Nor­way’s oil in­dus­try has been sali­vat­ing for years over the Arc­tic Lo­foten is­lands, which could hold bil­lions of bar­rels of crude.

The in­dus­try will likely have to keep dream­ing.

The gen­eral elec­tion next month is un­likely to lift a dead­lock that’s keep­ing a ban on drilling off the en­vi­ron­men­tally sen­si­tive archipelago as more and more Nor­we­gians are turn­ing their backs on the in­dus­try that helped make the coun­try one of the world’s rich­est.

“It’s a dead is­sue,” said Frank Aare­brot, a pro­fes­sor of po­lit­i­cal science at the Univer­sity of Ber­gen.

Backed by unions and busi­ness, Nor­way’s two big­gest par­ties, La­bor and the Con­ser­va­tives, have long fa­vored steps that could open up the area for ex­plo­ration. But so far they have had to com­pro­mise with smaller par­ties that are de­ter­mined to keep Lo­foten oil-free.

That’s be­cause the area is a natural won­der. The wa­ters off the rugged archipelago are home to the world’s big­gest cold-wa­ter co­ral reef and a breed­ing area for 70 per­cent of all fish caught in the Nor­we­gian and Bar­ents

● seas, ac­cord­ing to the World Wildlife Fund. The is­lands also host main­land Europe’s big­gest se­abird colony. Op­po­nents of oil ex­plo­ration ar­gue a spill could cause cat­a­strophic harm and that Nor­way will run afoul of the Paris cli­mate agree­ment if it ex­pands ex­plo­ration.

Oil com­pa­nies led by state­con­trolled Sta­toil, the big­gest Nor­we­gian pro­ducer, say gain­ing ac­cess is key if the coun­try

wants to main­tain pro­duc­tion of oil and gas, which is fore­cast to fall again from 2025 af­ter al­ready drop­ping 12 per­cent since a 2004 peak. While the gov­ern­ment es­ti­mates Lo­foten could hold about 1.3 bil­lion bar­rels of oil equiv­a­lent, in­dus­try group Konkraft has said re­sources could top 3 bil­lion bar­rels. If it’s all crude rather than gas, that would rep­re­sent at least $65 bil­lion in sales value at cur­rent prices.

“We’re de­pen­dent on mak­ing new dis­cov­er­ies to have new projects in that time

frame,” Sta­toil spokesman Bard Glad Ped­er­sen said by phone. “That also un­der­lines the ur­gency in an im­pact as­sess­ment for Lo­foten and Vester­aalen.”

The de­bate over Lo­foten frames a wider dis­cus­sion in Nor­way over what role West­ern Europe’s big­gest oil and gas pro­ducer, which started pump­ing crude in the 1970s, should take in the fight against cli­mate change.

The ques­tion is also whether there will ac­tu­ally be a need for the area’s un­tapped crude. As prices for re­new­able en­ergy

drop and oil pro­duc­ers from Exxon Mo­bil Corp. to OPEC raise their fore­casts for elec­tric car sales, ma­jor oil com­pa­nies have started talk­ing about crude de­mand peak­ing as early as next decade.

While both Prime Min­is­ter Erna Sol­berg and her ri­val from La­bor, Jonas Gahr Store, say Nor­way needs to be­come less reliant on oil, they also main­tain that petroleum pro­duc­tion will con­tinue to play a big part in the na­tion’s econ­omy for many years ahead. Pro­duc­tion alone still ac­counts for about 12

per­cent of the econ­omy, down from more than 20 per­cent be­fore oil prices crashed in 2014, and the en­tire in­dus­try em­ploys al­most 200,000 work­ers — about 3.8 per­cent of the coun­try’s pop­u­la­tion.

As­cen­dant op­po­nents such as the Green Party, which is aim­ing to gain more seats in par­lia­ment next month, and en­vi­ron­men­tal groups say Nor­way needs to start to phase out its oil in­dus­try, ar­gu­ing that more pro­duc­tion would be a breach to its com­mit­ments un­der the Paris cli­mate ac­cord. Green­peace is su­ing the coun­try to get it to stop ex­plor­ing in the Bar­ents Sea off Nor­way’s north­ern tip.

In a sign that op­po­nents of drilling are gain­ing trac­tion, La­bor in a “com­pro­mise” ear­lier this year said it would only seek to start an im­pact study in one of the three ar­eas des­ig­nated as po­ten­tial oil blocks off Lo­foten. But even such a small move is op­posed by the Cen­ter Party and the So­cial­ist Left Party, La­bor’s po­ten­tial rul­ing part­ners af­ter the Sept. 11 vote.

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