Norway’s great big fossil fuel conundrum

Climate Energy

Norway’s great big fossil fuel conundrum

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Its green economy is a global role model but its fortune was made on fossil fuels — where to from here?

If you watched this year’s Super Bowl, you would have seen the General Motors commercial in which actor and comedian Will Ferrell learns that Norway has more electric vehicles per capita than the United States. Incensed, Ferrell drives his own EV onto a container ship and sails across the Atlantic to give Norway a piece of his mind.

That GM used Norway to market its electric cars is testimony to the Nordic country’s reputation as a green utopia, which it has for good reason. More than half of cars sold in Norway last year were zero-emissions, versus a scant 2% of those sold in the U.S. Almost all of Norway’s power is renewable. The country’s per capita greenhouse gas emissions are less than half those in the U.S.

But, look under the hood of this green economic machine and this is what you’ll find: Lots and lots of fossil fuel.

Norway is the largest fossil fuel producer in Western Europe. It exported nearly $40 billion of oil and gas last year, and the industry employs around 200,000 people. Norway’s fossil-fuel revenues have built the world’s largest sovereign wealth fund — nicknamed the “Oil Fund” — which is worth an astounding $1.4 trillion and covers one-fifth of Oslo’s government budget expenditures.

“To put it in a crude way, we have become filthy rich from exporting global warming,” says Frode Pleym, director of Greenpeace Norway.

“We have become filthy rich from exporting global warming.”

Norway’s sustainable power movement began in 1989, when activist Frederic Hauge, of environmental group Bellona, and Morten Harket, lead singer of the Norwegian pop band a-ha, took Norway’s first electric car on a tour of Oslo, blowing through red lights, ignoring toll booths, and performing other acts of roadway mischief — in a publicity stunt to drum up support for market incentives favoring EVs. Pleym himself joined the movement after watching a group of student protestors scale the brick chimney of a coal-fired power plant. 

Back then, few would have predicted Norway’s future as an icon of sustainable power. “They thought we were crazy because it was just a wild idea. People couldn’t even imagine that happening in Norway,” he says.

Meanwhile, Norway was transforming itself from a modest maritime economy into an energy powerhouse. 

“Until very recently it would have been political suicide to even suggest that Norway should take a different route,” Pleym says.

But a new movement against fossil fuels has emerged, led once again by the country’s youth. In 2019, thousands of Norwegian students, inspired by Greta Thurnberg, staged school walk-outs to demand climate action. 

In parliamentary elections this September, Norwegians took their penchant for fossil fuels to the ballot box. Environmentalist political parties, demanding a halt to new oil and gas exploration, gained momentum, pushing climate change to the center of the debate. 

A new movement against fossil fuels has emerged led by Norway’s youth.

In the end, the contest dubbed the “Climate Election” failed to upend the status quo.

Yet the Climate Election raised an important question the world has only just begun to grapple with: Should nations be held accountable for the emissions of other countries?

The Paris Agreement and most major government climate policies are demand-side arrangements. They hold parties responsible for the emissions they directly produce — the “polluter-pays principle.”

Hildegunn Blindheim, climate and environment director for the Norwegian Oil and Gas Association, supports this approach — at least, as far as Norway is concerned.

As nations work to meet their Paris Agreement targets, they will inevitably buy less fossil fuel, she says. Oil and gas will decline no matter what Norway’s parliament does, and the industry is already taking action. In fact, Norwegian energy firms, wary of an unpredictable long-term market, are already being more selective about the wells they develop, avoiding sites that take longer to yield returns. They are also pivoting their value chains to alternative energy products such as hydrogen fuel, which can be manufactured from natural gas. 

Blindheim argues that while the transition is underway, Norway should continue to export oil.

“The world, and also Europe, will be dependent on oil and gas for many years to come,” she says. “It is then crucial that the oil and gas we still need is produced with low emissions.” 

“If we close the oil and gas industry, we don’t magically get new green jobs and value chains.”

Cutting the legs off of Norway’s fossil industry wouldn’t help the climate, Blindheim concludes. It would just hurt Norway.

“If we close the oil and gas industry, we don’t magically get new green jobs and value chains.”

The Norwegian Oil and Gas Association released its own climate report in the run-up to the election, arguing that cutting down Norway’s oil and gas would actually cause a net increase in emissions by driving clients to buy dirtier fuel from dirtier sellers. 

“Alternative gas sources have a substantially higher emission intensity than Norwegian supplies, with the Russian figure being four times higher,” the report reads, referencing data from Rystad Energy, an Oslo-based research firm.

Unsurprisingly, Norway’s environmentalists dismiss these arguments. Pleym of Greenpeace sees them as deliberate greenwash. He emphasizes that nobody, not even Norway’s Green Party, is suggesting the country blow up its most lucrative industry. Environmental advocates merely want to cap its growth and begin a sensible, gradual departure into other industries. Norway has enough existing developments — and money in the Oil Fund — to make a smooth transition smooth, Pleym argues. Oslo can afford to do the right thing.

“If you, as an American, think of other Nordics like Iceland, Denmark, Sweden, Finland, you also think of advanced economies with large welfare states and well-functioning democracies,” Pleym says. “If Norway had not found oil and gas, we would not have been worse off than our neighbors.”

Gier Asheim, professor of economics at the University of Oslo, argues that Norway could make a global difference by cutting back on fossil fuel exports, but as it stands, Norway has little economic or geopolitical incentive to curtail its own industry. More promising, he suggests, is the notion of Norway taking part in a “fossil fuel non-proliferation agreement”— an idea that is bumping around in climate activism circles. Asheim and his colleagues proposed their own version in a paper published in Science.

Asheim hopes the idea of fossil fuel non-proliferation will be floated at the upcoming COP26 climate summit in Scotland when Paris Agreement signatories gather.

In one respect, Pleym agrees with Norway’s oil industry promoters: The country’s energy industry is one of the most advanced in the world, and it could lead a transition to new, renewable industries such as hydrogen fuel, offshore wind power, and exports of sustainable power to the rest of Europe. 

He just doesn’t trust the industry to follow through.

“If Norway doesn’t take the opportunity to be a part of that now, we will be surpassed very quickly,” Pleym says. “The train to new possibilities in the energy sector, it’s leaving the platform now.”

To get a sense of the conversation on the ground, I turned to social media. On Reddit’s Norwegian community — r/Norway — I introduced myself as a curious American who wanted to know how Norwegians feel about fossil fuels.

The post currently has 90 replies. Some commenters say they work in the oil and gas industry and are worried about their jobs. Some say all the “Climate Election” was just an invention of the media, and voters didn’t really care. Some call fossil fuels Norway’s greatest strength, others its biggest shame. There are vicious debates about electric cars, Saudi Arabia and Russia, and horizontal drilling. As the debate rages on, they become riddled with acronyms, jargon and Norwegian slang.

Reddit poster “HuldaGarborg” gives a more concise answer. “Short version: We argue about it a lot.”

Written by

Jared Downing

Jared Downing is managing editor of Climate & Capital Media. Before Climate&Capital, he spent five years in Yangon, Myanmar, producing the human rights podcast Doh Athan and producing features, columns, and cartoons for Frontier Myanmar, that country's leading English language magazine. Prior to that, he was a freelance writer in Birmingham Alabama, focusing on city culture and social justice.