E24´s article from September 2021, prior to the Norwegian General election, on “Ten reasons why Norwegian oil and gas activity remain important” (see https://e24.no/olje-og-energi/i/RrmbbJ/ti-grunner-til-at-norsk-olje-og-gassaktivitet-forblir-viktig) is a good example of the oil and gas sector´s attempt to control the narrative in relation to the Petroleum-Industrial Complex. The article was written by the former CEO of Lundin Energy Norway, Kristin Færøvik and the current CEO of Petoro AS, Kristin Kragseth. This article requires a little in-depth analysis from a climate change perspective.
As an opinion piece, it tries to justify why continued oil and gas production is important, however the views and facts presented do not, in my opinion, reflect reality and are classic attempt to detract and deflect from taking real action on climate change, in particular reducing GHG emissions resulting from the combustion of oil and gas.
Lamb et al. (2020) is a great starting point to analyse the article: (https://www.cambridge.org/core/journals/global-sustainability/article/discourses-of-climate-delay/7B11B722E3E3454BB6212378E32985A7#
The paper describes the various tactics, which have previously been used to delay real action on climate change by creating doubt, uncertainty and fear in the mind of the reader. And in doing so, create inertia against changes that will reduce society’s addiction to oil & gas. Below is an analysis of the “Ten reasons…” mapped against the Lamb et al. (2020) climate discourses. The analysis for each of the ten reasons are are arranged as follows:
| #Reason |
| Text from original article translated in to English |
| Assessment of the presented reason using Lamb et al. (2020) |
| Rebuttal / comment to the original and references used in the rebuttal / comment |
1. The world needs energy
| Reliable and sustainable energy at an affordable price is one of the UN’s 17 sustainability goals. This goal is also important in order to achieve several of the other goals, such as eradication of poverty, eradication of hunger, good health care and good educational institutions. In all scenarios outlined up to 2050, oil and gas make up a significant share of the energy mix. The market demands oil and gas. |
| > Fossil fuel solutionism > Disruptive change is not necessary: push non-transformative solutions |
| This reason is very selective when referencing the UN´s 17 sustainability goals (SDG). It refers to affordable price whilst SDG 7 refers to Affordable and Clean Energy. The clean part is not mentioned – selective use. Interestingly SDG 13: Climate Action, SDG 14: Life Below Water, SDG 15: Life on Land and SDG16: Peace, Justice and Strong institutions are not metioned. All of which are impacted by climate change caused by GHG emissions from the use of oil and gas. The statement “All scenarios outlined up to 2050…” does not reference which scenarios it is referring to. For example, the recent IEA Net Zero Scenario released in May, clearly states that no further investment in oil and gas should take place if the goal of Net Zero is be reached in 2020. Again selective use however many of the IEAs other scenarios such as “”Stated Policies”” and “”Sustainable Development”” do forecast demand up to 2050 .” |
2. 200,000 jobs
| Employment is probably the most important single element in creating and maintaining good and well-functioning local communities. If we add up the number of jobs in the oil industry with everyone who delivers goods and services to the oil industry, it amounts to around 200,000 jobs. These jobs are distributed throughout the country. |
| > Appeal to social justice > Change will be disruptive: emphasise the downsides |
| This is a factual statement based on an SSB report issued in 2017. However, in the context of this article no reference is made of energy transition related “green shift jobs” despite recent government white papers (Energy for Work – Long-term value creation from Norwegian energy sources or the Climate Plan 2021 – 2030). This is “Project Fear” approach to the local communities that currently have large employment in the oil and gas sector. |
3. Huge income for the community
| The petroleum resources on the Norwegian shelf belong to us all. Therefore, the tax system is set up so that most of the profits go to the state. In the revised national budget 2021, the state’s total revenues from the petroleum activities are estimated at NOK 154 billion. This corresponds to more than the defense and transport budget combined. |
| > Appeal to well-being > Change will be disruptive: emphasise the downsides |
| This is a factual statement highlighting the huge tax revenues generated from petroleum related activities. However, it does not provide any further context such as it representing 14% of GDP and 14% of State revenues over the 2021 fiscal year. That means 86% comes from other sources. This is “”Project Fear”” to highlight what could be lost revenue if oil and gas revenues stop. This will not happen overnight and it is worth mentioning that these revenues will decline “”naturally”” as production in Norway goes into decline from 2030 onwards. Hence the importance of an early transition. Another recent report from SSB highlights 3 alternative scenarios, one of which is looking for a middle road of declining oil and gas production coupled to increased investment in alternatives. This is not mentioned here.” |
4. Less production in Norway does not reduce greenhouse gas emissions
| Some believe that if we reduce production from the Norwegian continental shelf, it will result in lower greenhouse gas emissions globally. But other manufacturers are queuing up to deliver. Common to these is that they have significantly larger emissions than we have from Norwegian production. A brake in Norway can therefore lead to an increase in emissions. |
| > Whataboutism > Someone else should take action first: redirect responsibility |
| This statement is based on a recent Rystad Energy report sponsored by the Norwegian Oil and Gas Association (NOGA). This report has not been made publically available with only a “key findings” of the report issued on the NOGA web page. It highlights the impact of carbon leakage should oil and gas production be cut i.e. government policies to reduce supply to the market. Unfortunately, the methods and assumptions used by Rystad Energy cannot be independently verified. Without openness and transparency, it is hard to assess the merits of this reason. However it does introduce the issue of demand-side versus supply side policies, one of which is to restrict/stop exploration (For an overview see LAZARUS, M. & VAN ASSELT, H. 2018. Fossil fuel supply and climate policy: exploring the road less taken. Climatic Change, 150, 1-13.) |
5. Continued exploration will slow down the downturn that comes
| Production from the Norwegian continental shelf will decline after 2025. We have too few new discoveries and potential developments to prevent it. Exploration activity in the coming years will at best help to limit the decline. Continued exploration will prevent the loss of jobs and skills. In addition, it makes sense to utilize the infrastructure we already have in the form of platforms and export pipelines. |
| > Appeal to well-being > Change will be disruptive: emphasise the downsides |
| It is factual that oil and gas production will decline after 2025 as many of the large fields come off plateau and go into decline and smaller fields enter tail-end production. This occurs in all oil and gas producing nations, it is a finite resource. However in the context of this article, this reason is again pushing Project Fear – loss of jobs and skills. It ignores the IEA´s Net Zero scenario that no further investment is required if the goal of net zero in 2050 is to be achieved. It is a good example of trying to postpone the transition to green shift jobs by creating a sense of fear around present day jobs. The argument given on infrastructure is classic “”carbon lock-in””. An investment has been made so use the petroleum related facilities. Seto et al., (2016) present strong arguments highlighting how a strong oil and gas lobby linked to political and institutional behaviours reinforces carbon lock-in. The challenge remains that some near-field exploration may be beneficial due to the high value generated but this reason is trying to polarise the argument. Are you for or against new exploration? There are many areas to be addressed when it comes to reducing/stopping exploration. This reason does not explore them and looks at business as usual.” |
6. Petroleum is used for more than transport
| About 55% of the oil and gas produced is used for transport. The rest are, for example, input factors for the chemical and pharmaceutical industry, and for plastics and other products we do not have good substitutes for today. Petroleum products are absolutely necessary in the production of wind turbines, electric cars, mobile phones and many other products we all depend on every day. |
| > Fossil fuel solutionism > Disruptive change is not necessary: push non-transformative solutions |
| It is worth noting that no reference or source is quoted. It is not clear why only the transport sector is singled out. According to the IEA, in 2018, oil and gas represent 54.4% of global energy supply while according to Our World in Data, oil and gas account for 57.4% of global primary energy consumption by source. According to a recent Konkraft Report, 90% of oil and gas is combusted and the remaining 10% is used in the chemical and pharmaceutical industry. The transport sector may represent the main use of oil and gas but this point is misleading as a further ca. 35% oil and gas prodiced is still combusted mostly for power generation and hence the reason presented is selective in what data is being presented to the reader. “ |
7. New technology springs from the petroleum industry
| New technology will be important for us to be able to reduce greenhouse gas emissions and achieve the goals in the Paris Agreement. The petroleum industry in Norway is a locomotive in this area. We have the competence to develop, and the capacity to implement. Just look at projects in carbon capture and storage, the development of hydrogen and fuel cell technologies and the development of new renewable energy production such as offshore wind, to name a few examples. |
| > Technological optimism > Disruptive change is not necessary: push non-transformative solutions |
| “Without doubt, the longer it takes to reduce emissions coming from oil and gas combustion, the more reliant the world becomes on technology driven solutions related to carbon dioxide removal (CDR) technologies such as carbon capture and storage (CCS). Yes, the oil and gas industry is a leader in technology development chiefly around reducing costs and maximising production, CCS is not new and was pioneered by the oil and gas sector in Norway to allow production from the Sleipner field where the gas has a high concentration of CO2, later followed by the Snøhvit field. The claim to develop new renewable energy production such as offshore wind is misleading. Fixed bottom offshore wind is an established technology, the technology being developed is floating offshore wind where oil and gas companies can use their expertise and competence. By not being specific on this point, it gives a false impression to the reader. The technology for CO2 storage is well developed, the focus is now on the capture from large uses and transport to the storage site. Hence the Longship initiative in Norway. However, the technology is currently small-scale and needs to be massively scaled up if it is to have any impact. The real danger is that promotinon of this technology is a smokescreen for continued oil and gas production. Continued production can be maintained as there will be “”magic”” solution in the future. Oil and gas companies promoting CCS are perpetuating carbon lock-in i.e. the poacher is trying to become the game keeper.” |
8. Oil companies are drivers of green investments
| Many of the new renewable projects are driven by the traditional oil companies. As developers or on the investment side. Thus, revenues from oil and gas directly contribute to financing renewable energy. When someone talks about ” rather using the money we invest in oil and gas to invest in renewable energy and green jobs “, this is challenging. Stopping investment in oil and gas releases nothing. On the contrary, it will reduce companies’ ability to invest in renewable energy. |
| > Fossil fuel solutionism > Disruptive change is not necessary: push non-transformative solutions |
| This is redefining “green finance” in a new way. Rebranding of oil and gas companies as energy companies coupled with pressure from investors and society in general has forced oil and gas companies to diversify into renewables. However, the majority of investment is still into new oil and gas projects. Oil and gas companies are dependent on the cashflow generated by their oil and gas revenues to invest in their renewable projects. Many renewable companies has access to capital from major financial institutions and not reliant on the production of oil and gas. Again another selective argument to justify continued oil and gas production for said companies to have cashflow to invest in renewables. Reference Equinor´s 2021 capital market update where renewables only account for 12% of the total capital expenditure in 2021. On the positive side Equinor´s ambition is >50% in 2030. There is some gap to close between now and 2030 and that’s a lot of money going into oil and gas in the next 10 years . It is worth noting that neither Lundin Energy or Petoro are direct investors in renewable projects. |
9. Norwegian petroleum contributes to geopolitical stability
| Most of the world’s oil and gas resources are controlled by countries without democratic governance. And they have enough production capacity to replace Norwegian oil and gas almost immediately. By moving production from Norway to these countries, we give more power and influence to non-democratic countries. Norwegian gas currently covers 22% of Europe’s total demand. |
| > Appeal to well being > Change will be disruptive: emphasise the downsides |
| “This reason is wrong on two accounts. Firstly, the aim of the energy transition is to move away from fossil fuels (oil and gas) and towards renewables. The quicker this transition takes place, the quicker the reliance on “”countires without democratic governance”” is reduced. Secondly, it avoids teh biggest elephant in the room, climate change through driven by continued GHG emissions will lead to greater geopolitical instability. Natural disasters, mass migration and economic turmoil in petrostates will lead to greater instability. Hence this reason is wrong and is again based on Project Fear.” |
10. Demand for expertise throughout the world
| Norway is in the world elite when it comes to products, technologies, expertise and safety for the petroleum industry. The Norwegian petroleum-related supplier industry accounts for an export value of about 120 billion a year, and is Norway’s second largest export industry after sales of oil and gas. Many of these companies are now also aiming for the international renewable market. The supplier industry is at the top of the world because we have a solid domestic market as a foundation. If this deteriorates, it will affect exports. |
| > Appeal to social justice > Change will be disruptive: emphasise the downsides |
| “Project fear around jobs. This is why the green shift has to take place as soon as possible to enable suppliers to transition to the growing renewables market. If correctly supported by government then a transition maintaining skills and competence can be managed. The real danager is that clinging to oil and gas will prevent these skills from developing and other countries develop a more competitive base. It is worth noting that Norway has still not issued any licences for offshore wind farms. Earliest is planned for 2022. Compared to other countires it is very late to the game. Perhaps any over reliance on oil and gas and lack of political will to diversify from oil and gas are explnantions for this. This is Project Fear attempting to justify continued use of oil and gas production because it maintains the supply industry and allowing it to diversify into renewables.” |
Summary
The “Ten reasons” article, in the opinion of the author, are a classic example of climate discourse promoted by the oil & gas sector in Norway. The article was written in the run-up to the Norwegian general election in September 2021, and used to counter arguments presented by the Green Party against the oil & gas industry. The oil & gas sector is desperate to control the narrative to maintain the status quo, promote continued exploration and production to avoid the need for supply side policies.
The current energy crises in Europe, created by the Russo-Ukrainian war, is used by the oil & gas sector to further promote business-as-usual. The energy crises is real but the need for further exploration is questionable given, on average, it takes 7 to 10 years from licence award, discovery and development to get to first production. This will not help the immediate crises and by the time such fields are producing, the world needs to have moved on to renewables if the goal of net zero are to be met.
To surmise, I believe the article is a poor and un-informed attempt to justify maintaining the status quo / business-as-usual for oil & gas in Norway.
Climate Change Consulting 