By Anders Lorenzen
The main political opposition in the Norwegian parliament, Labour, has dropped its support for oil drilling in the environmentally sensitive Lofoten islands in northern Norway. This action paves the way to protecting the island archipelago from the oil industry as there’s now a solid majority in the Norwegian parliament to block oil drilling on the islands.
This move by the Scandinavian country’s biggest political party has left the oil industry disappointed. Not least the state-owned Equinor, which recently (March 2018) rebranded to take the word oil out if its name (previously Statoil), which some have called a greenwashing exercise. Estimates suggest that 1 billion to 3 billion barrels of oil could be hiding in the archipelago.
Karl Eirik Schjott-Pedersen, head of the Norwegian Oil and Gas Association, expressed his disappointment: “The whole industry is surprised and disappointed. It doesn’t provide the predictability we depend on”
The move has hardly come as a big surprise. Climate change has been moving up on the agenda in Norway in recent years, and the fossil fuel divestment movement has had a really big impact led by young people, the Church of Norway and campaign groups. This has led to Norway’s sovereign oil wealth fund, which is the world’s wealthiest sovereign wealth fund, making serious noise about re-investing profits in renewables rather than fossil fuels.
Now we are guessing what might happen next. It is suggested that Labour could follow up by pledging also to ban oil drilling in the Barents Sea which could really send the Norwegian oil industry to its knees.
But others will be wondering what a drastic drop in oil revenues could mean for the Norwegian economy. Over 1.6 million barrels of oil pumped daily from Norway’s offshore oil fields corresponds to over 50% of Norwegian exports.
Norway has one of the cleanest electricity grids and has the largest uptake of electric vehicles in Europe. But as critics have pointed out, that while fewer fossil fuels are being used domestically, the industry keeps pushing for more oil drilling so that more can be exported.