Norway Stands At The Crossroad Between Fossil Fuels & The Low Carbon Future – CleanTechnica

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Politics is a messy business. We all know what the right thing to do is, but we can’t always do it, because we need a consensus. Building that consensus often means doing the wrong thing now so we can do the right thing later. Norway is the perfect example of how getting to a goal often means taking a route that involves detours along the way.

The average Norwegian, better known for loving nature than destroying the planet, is more likely than anyone else to drive to work in an electric car and warm their home with a heat pump, says The Guardian. When they turn on the kettle in the morning or charge their phone at night, Norwegians plug into an electricity grid that runs almost entirely on renewables. Their politicians write checks to save trees in tropical forests and politely pressure other countries to protect the environment, too. Yet the citizens of Norway extract more petroleum per person than Russians, Iranians, North Americans, or Saudi Arabians.

Norway is a green petro-state, The Guardian says. Its 5.5 million inhabitants are adopting clean technologies faster than anyone else, while its political and industry leaders drill furiously for fossil fuels to sell to their European neighbors. It is a paradox that has led some to paint Norway as a climate hero and others to decry it as a carbon villain. “Norway claims to be a climate leader, but in reality it is a climate hypocrite,” said Frode Pleym, the head of the Norwegian branch of Greenpeace.

One factor that sets Norway apart from other petroleum-producing companies is that rather than allowing the profits from its oil business to line the pockets of corporate executives and shareholders, Norway has put its petroleum profits into the world’s largest sovereign wealth fund. Today that fund holds more than a trillion dollars. Tasked with a mandate to safeguard wealth for future generations, the fund now also uses its clout to speed the shift to a clean economy.

“As the climate crisis has developed, the fund has been thinking more and more about what it should do as a financial investor,” said Carine Smith Ihenacho, the chief compliance officer at Norges Bank Investment Management, which owns the fund. It lobbies companies in its portfolio to set net zero targets and argues the business case for developing credible transition plans while divesting from “climate laggards” who refuse to engage. “For us, climate risk is financial risk,” said Ihenacho.

The pressure that Norway applies with its petro-dollars is just one of the unexpected ways in which the country is shaping global efforts to lower carbon emissions. Last month, a fertilizer producer near Oslo opened Europe’s biggest green hydrogen factory, while a cement factory nearby is set to become the first in the world to capture carbon during the production of concrete. Norway already has more heat pumps per household than anywhere except Japan, and by the end of the year, Norway may become the first country in the world where electric vehicles outnumber combustion engine cars.

Analysts say the Norwegian public’s hunger for clean technologies — and their leaders’ willingness to back them early — has spurred global innovations that drive quality up and push prices down. Oslo is the first public authority to mandate zero emissions construction sites, a move has already encouraged manufacturers to bring electric construction machinery to market that can help decarbonize building sites around the world.

But even as Norway has championed the switch to a clean domestic economy, it appears to have bet that the rest of the world will not do the same. Its government continues to license fossil fuel extraction projects in the face of stern scientific warnings that there are already enough oil platforms, gas wells, and coal mines to blow through the global carbon budget for 1.5° C (2.7° F). It says if it reduces its oil and gas production, others will simply fill the space it leaves behind. Norwegian economists have wrestled fiercely with the implications of these effects, with some arguing that a cut to production would still be effective and others suggesting it could increase emissions if the replacement fuels come from countries with dirtier production practices.

Norway has done “some very wise things” in managing its petroleum resources, said Erlend Hermansen at the Center for International Climate Research in Oslo, but it faces a hard landing if it does not plan for the coming decline. “How do you transform that business in a society that’s going to net zero? That’s the billion dollar question.”

In the short term, the answer appears to be that it will not. Since Russia’s full-scale invasion of Ukraine sent European nations scrambling for gas suppliers, Norway has increased the production of fossil fuels. “The war changed everything,” said Frode Alfheim, the head of trade union Industri Energi. “The little uncertainty about the future of oil and gas has been prolonged for many decades. I feel sure that if you want to start working as an apprentice today, you’ll retire as an oil and gas worker.”

Norwegian gas has helped keep the lights on across Europe while reducing the need to burn dirty coal in German power plants or ship in liquefied natural gas that was fracked in the US. But by the same logic, it has also reduced the pressure on European leaders to invest in renewables, energy efficiency, and demand reduction measures that the continent is failing to roll out fast enough.

Bård Lahn, a researcher at the University of Oslo who studies Norway’s fossil fuel policy, said: “Another perspective is that we are at a political impasse, where we need to reduce both supply and demand for fossil fuels, but it’s very hard for someone to take the first step. We need someone to chart the course, show it’s possible and gain experience with it. In that sense, it would be good if Norway — as probably one of the best-placed ‘petro-states’ to make such a transition — would start. And maybe others would follow.”

Norway & The Climate Conundrum

It can be said that Norway is doing more than any other fossil fuel-producing company to rein in its emissions. The conundrum is that even with such efforts, the world is speeding toward a climate crisis of unimaginable proportions and doing too little to limit the damage it will cause. Scientists have warned that the Earth has a “carbon budget” which if exceeded will tip the world over into a full-fledged environmental breakdown that could see average global temperatures soar by as much a 3° C or more.

The window for avoiding that result by drastically lowering the amount of fossil fuels we burn closes in 2030, yet the world is on pace to produce more fossil fuels, not less. Full credit goes to Norway for doing more than virtually any other nation to address the impeding crisis. The issue is that even with the best of intentions, it should be doing much more.

Not that other countries are doing any better. The International Institute for Sustainable Development has shared new data with The Guardian that shows new oil and gas field licenses forecast to be awarded across the world this year are on track to generate the highest level of emissions since those issued in 2018. The new oil and gas developments would add 11.9 billion tons of greenhouse gas emissions to the environment over their lifetime — far exceeding the climate budget climate scientists say the Earth can tolerate. We expect Russia and Saudi Arabia to thumb their noses at any calls to reduce fossil fuel production, but lately the UK, the US, Canada, Norway, and Australia are being thought of as paying little more than lip service to their commitments to reduce emissions.

In the US in particular, the Biden administration, despite its robust support for clean energy initiatives, has helped the country to become the world’s largest exporter of fossil fuels. In fact, there are proposals pending to add multiple new LNG export hubs in the Gulf of Mexico that will get built if the Ogre of Mar-A-Lago gets elected with his “drill, baby, drill” platform in November.

This week, UN Secretary General Antonio Guterres said the world’s wealthiest countries are “signing away our future” by leading a “flood” of expansion in fossil fuel activity that threatens worsening heatwaves and other climate impacts that imperil billions of people. He called on countries to “fight the disease” of the world’s “addiction” to coal, oil, and gas, warning that tumbling heat records this week must spur rich nations to lead the way in phasing out fossil fuels.

“I must call out the flood of fossil fuel expansion we are seeing in some of the world’s wealthiest countries,” Guterres said in a speech in New York. “In signing such a surge of new oil and gas licenses, they are signing away our future. The leadership of those with the greatest capabilities and capacities is essential. Countries must phase out fossil fuels — fast and fairly.”

The Takeaway

Norway, it will be said later, did the best it could while others did nothing at all to avoid existential harm to the human race and the Earth. In years to come, there will be plenty of finger-pointing and more than enough blame to go around, but it won’t matter. Billions of people will die because we could not figure out how to break the curse of fossil fuels. In the final analysis, we will solve the issue of poverty by simply exterminating the poor, leaving only the wealthy to survive in hermetically-sealed cocoons that project images of what the world outside used to look like onto their otherwise blank walls.