The Norwegian Oil and Gas Association January 18, 2021

Norway as an energy nation is changing

Oil and gas are of crucial importance to the country’s economy, and will be an important foundation for value creation and jobs for a long time to come. In the long run, however, we face major challenges in maintaining income and employment.

How can we ensure value creation from the Norwegian continental shelf in the years to come? How can the oil and gas industry contribute technology to reduce emissions, and how can the entire energy sector play together to secure the future of the Norwegian economy? There are important questions that must be answered when the government this spring presents the Parliament report on long-term value creation from Norwegian energy resources.

It will be crucial to maintain value creation, jobs and government revenues for the welfare state, while at the same time achieving the climate goals.

Some assumptions must be taken into account. Firstly, competitive framework conditions are absolutely crucial. The area and allocation policy is the most important single instrument the state has to stimulate the level of activity on the Norwegian shelf. Predictability is important for maintaining interest in Norwegian and international companies and among investors. Only half of the expected oil and gas resources have been produced. The potential is therefore great. We know that the fields that are currently in production, and the discoveries that have not yet been developed, can be utilized even more profitably, and with the lowest possible greenhouse gas emissions. It is our competitive advantage when we know that the world both needs energy and has ambitious climate goals.

Greenhouse gas emissions from Norwegian oil and gas production are among the lowest in the world. But to achieve the climate goals, we must do much more. Last year, the entire oil and gas industry set ambitious goals. We are committed to doing our part to ensure that the world reaches the goal of net zero emissions by the middle of this century. The Storting has decided that we as an industry will reduce our emissions by 50 per cent by 2030. To achieve this, the authorities and industry must work together in a number of different areas.

Increased electrification of the Norwegian continental shelf with power from land is absolutely crucial. Electrification provides real emission cuts in Norway and globally, but will also provide significant value creation in the supplier industry and create jobs. Norway has great potential to contribute power from offshore wind and create industry out of this. But then we must clarify what will be Norway’s long-term ambition for production and export. And the ambition must be big enough. Framework conditions that ensure the development and operation of large-scale offshore wind farms on the Norwegian shelf must therefore be in place.

And the potential for profitable operation of mineral deposits, and thus new business development, in Norwegian sea areas is also great. Surveys conducted by the authorities have shown minerals that contain metals necessary for green conversion, such as batteries for electric cars. There are many indications of great economic potential for a new industry that will build on technology and expertise from the oil and gas sector.

Before Christmas, the EU tightened its climate targets for 2030 to 55 percent. It affects our industry, and we must adapt to be relevant. Therefore, we have set ourselves concrete ambitions on how we can contribute to reducing emissions from the end use of oil and gas. Hydrogen from natural gas with CO2 capture and storage (CCS) and CCS in industry is absolutely necessary to achieve the climate goals. The EU has also pointed to CCS as an important climate technology, and we have the capacity to receive emissions from large industrial players who have no other options for removing their emissions, such as the cement or waste industry.

In the years to come, our industry will continue to create value for society. Values ‚Äč‚Äčthat can increasingly also contribute to the development of new industries. To ensure continued value creation, the government must ensure competitive framework conditions so that the industry can further develop its competence and develop low- and zero-emission technologies that are necessary to achieve the climate goals.

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