Both Climate Leader And Oil Giant? A Norwegian Paradox
In May, Statoil began work on five new exploration wells in the Barents Sea, and the company is bullish on the prospects. It says that it explores only in ice-free waters. (Cleaning up an oil spill in ice is next to impossible, environmentalists say.)
A spokesman, Morten Eek, said that Statoil takes great care to mitigate against environmental risks, that its extraction process leaves a smaller carbon footprint than the global average, and that the company saw no reason to stop exploring now.
“There will be demand for oil and gas even in a 2-degree scenario going forward,” Mr. Eek said.
In any case, he pointed out, it can trade its emissions allowances across Europe, as part of the European Union’s emissions cap-and-trade system, meant to create incentives to reduce a company’s carbon footprint.
The oil market, though, may have other ideas. Norwegian oil is expensive, relative to oil from many other parts of the world. Falling oil prices worldwide could make Norway’s supply even less competitive on the international market, said Thina Margrethe Saltvedt, an analyst at Nordea, a market research company.
“The world might not need our oil,” she said.
Then there are the climate implications, she added: “We want to be a leader in climate change. But what we do is export the CO2.”
Oil drilling can be a politically contentious topic for Norwegians. A proposal to explore for oil near the Lofoten Islands, an ecologically sensitive cod breeding ground, was bitterly opposed by environmentalists and fishermen — and shelved until after national elections this fall.
On a recent bright, hot day — “This would be a great day in July, and it’s only May,” said Norway’s environment minister, Mr. Helgesen — the minister emphasized that his country was aggressively trying to curb demand for oil and gas. He drives an electric Volkswagen Golf. It can carry on for nearly 100 miles on a full charge, though in the bitter Norwegian winters, he concedes, it conks out much sooner.